The proposed settlement in the federal lawsuit was disclosed on Wednesday in the U.S. District Court for the District of Minnesota.

Lawyers for the plaintiffs — grocery stores, food distributors and other businesses that bought beef products directly from Tyson — said in the filing that they are working on a final settlement agreement to present to a judge for approval.

Tyson, and the attorneys for the beef purchasers did not immediately respond to requests for comment.

The buyers had accused Tyson and several other major beef producers of conspiring to charge inflated prices for retail sale-ready consumer cuts or edible boxed beef between 2015 and 2022.

The plaintiffs include Pennsylvania-based Redner’s Markets and Mississippi-based R&D Marketing.

Lawyers for the plaintiffs estimated thousands of so-called direct purchasers are part of the proposed class.

The Tyson accord is the second for the direct purchasers, after JBS USA agreed to pay $52.5 million. The company denied any wrongdoing in agreeing to the deal, which was approved by a judge in 2022.

Tyson and JBS are the two largest defendants. Two remaining defendants, Cargill and National Beef, did not immediately respond to requests for comment.

Arkansas-based Tyson, the largest U.S. meat company, settled related price-fixing claims from consumers in the beef litigation for $55 million.

Tyson also separately agreed this year to pay $85 million to settle a proposed consumer class-action accusing it of conspiring with rivals to inflate pork prices.

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The closure in the heart of cattle-feeding country signalled that supplies will remain tight, forcing meatpackers to pay steep prices for cattle to process into steaks and hamburgers.

Beef prices have set records due to low supplies and strong demand, raising costs for consumers. President Donald Trump said last month that he was working to bring down prices.

Tyson said it will also reduce operations at a beef plant in Amarillo, Texas, to a single, full-capacity shift, affecting about 1,700 workers.

“Tyson Foods recognizes the impact these decisions have on team members and the communities where we operate,” the company said in a statement.

Tyson said the changes were expected around January 20 and that it will increase production at other facilities to meet customer demand.

Beef business loses big

Beef prices soared this year as cattle supplies dwindled and meatpackers increasingly competed for limited supplies of livestock.

Ranchers slashed their herds after a years-long drought burned up pasture lands and hiked feeding costs. Some have slowly started to rebuild their herds, though it takes at least two years to raise full-grown cattle.

Tyson’s beef business suffered adjusted losses of $426 million (C$601.1 million) in the 12 months ended on September 27 and $291 million over the previous year. The meatpacker projected the unit will lose $400 million to $600 million in the 2026 fiscal year.

“We all expected a plant to be closed at some point in 2026,” said Rich Nelson, chief strategist for Allendale.

“I’m a little surprised they’re doing it preemptively.”

Losses in Tyson’s beef business were a turnaround from the fat profits it and other processors reaped during the COVID-19 pandemic, when meat prices soared as infections among plant workers slowed output.

Closure threatens local economy

The Lexington plant can process roughly 5,000 cattle per day, or about five per cent of total U.S. slaughtering, but it has already been operating below capacity, said Matt Wiegand, commodity broker for FuturesOne in Nebraska. Its closure will shock the city of about 10,000 residents and hurt local feedyards that fatten cattle, he said.

“Tyson’s announcement will have a devastating impact,” said U.S. Senator Deb Fischer of Nebraska.

“It’s no secret that just a few years ago, packers like Tyson were making windfall profits while the rest of the industry was continuously in the red.”

In Amarillo, Tyson’s plant can slaughter roughly 6,000 cattle per day, according to industry estimates.

The White House had no immediate comment.

Trump has sought to boost beef imports from countries such as Argentina to ease prices for U.S. consumers, angering American ranchers. On Thursday, he removed 40 per cent tariffs he had imposed this summer on Brazilian food products that slowed imports of beef used to make hamburger meat.

Trump has also accused meatpacking companies of driving up U.S. beef prices through manipulation and collusion, and ordered the Justice Department to investigate.

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Supplies are expected to remain tight for at least the next two years, forcing meatpackers like Tyson and rivals JBS USA and Cargill to pay steep prices for cattle to process into steaks and hamburgers.

Beef prices have set records due to low supplies and strong demand, raising costs for consumers. U.S. President Donald Trump said last month that he was working to bring down beef prices.

Tyson said it will also reduce operations at a beef plant in Amarillo, Texas, to a single, full-capacity shift, affecting about 1,700 workers. The company will increase production at other facilities to meet customer demand, according to a statement.

“Tyson Foods recognizes the impact these decisions have on team members and the communities where we operate,” the statement said.

— Reporting by Tom Polansek

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The preliminary class action settlements were filed on Monday in federal court in Minnesota and require a judge’s approval.

Tyson, the largest U.S. meat company, will pay $55 million. Cargill agreed to pay $32.5 million. The proposed accords are the first for consumers in the price-fixing litigation, which began in 2019.

Attorneys for the plaintiffs have estimated there are about 36 million potential class members in 26 states and the District of Columbia.

Tyson, based in Arkansas, and Minnesota-based Cargill agreed to cooperate with the consumers as they pursue price-fixing claims against the remaining defendants, JBS USA and National Beef Packing.

Tyson and Cargill did not immediately respond to requests for comment, and neither did JBS and National Beef. The defendants have all denied any wrongdoing.

Lead attorneys for the consumers on Monday declined to comment.

Eligible class members are individuals who indirectly purchased beef products — such as chuck, loin and ribs — between August 2014 and December 2019 from stores such as Walmart and Costco. The retailers are not named as defendants.

An expert for the plaintiffs said he estimates total damages to the consumer class at $1.9 billion.

The plaintiffs’ lawyers said they have spent tens of thousands of hours pursuing the lawsuit. They said they will ask the court to award them up to 33.3 per cent of the settlement, or $29 million, in legal fees.

Tyson last week agreed to pay $85 million to settle a lawsuit by consumers who accused it of conspiring with rivals to inflate pork prices. Tyson denied wrongdoing in that case.

Earlier this year, JBS reached a $83.5 million settlement resolving price-fixing claims from ranchers and other plaintiffs, but not consumers. JBS has denied any wrongdoing.

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Tight cattle inventories have driven up beef prices for U.S. consumers and forced meatpackers, including Tyson and rivals like Cargill and JBS, to pay more for livestock to slaughter.

Farmers slashed their herds by sending more animals to slaughter instead of keeping them to reproduce following a years-long drought that reduced grazing lands and raised prices for livestock feed. Ongoing dryness over the past year had discouraged producers from starting the rebuilding process, which can take roughly two years.

“Everybody is hesitant, including me, to call that we are now in rebuild,” King said on a webcast of BMO’s Farm to Market Conference. “If we’re not, we’re very close.”

Tyson reported an adjusted operating loss of $181 million in its beef business in the six months that ended on March 29.

The USDA, in its May 12 World Agricultural Supply and Demand Estimates (WASDE), projected U.S. beef production and exports to fall in 2026 on continuing tight supplies.

—Reporting by Tom Polansek, with files from Glacier FarmMedia

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The chicken nuggets and Ball Park hot dogs manufacturer has improved its poultry business after struggling to predict demand and shuttering plants that employed thousands of workers. A gradual recovery in restaurant traffic and sustained eat-at-home trends have supported demand.

However, Tyson faces threats from tariffs that U.S. President Donald Trump plans for Mexico, Canada and China, as well as tight supplies of U.S. cattle. Trump said on Monday he agreed to pause anticipated tariffs with Mexico for one month.

Tyson considered tariff risks when it lifted its annual adjusted operating income forecast range to between $1.9 billion and $2.3 billion, from $1.8 billion to $2.2 billion expected earlier, CEO Donnie King told analysts on a call.

The company, which benefits from relatively cheap costs for U.S. grains used to feed chickens, now expects fiscal 2025 sales to be flat to up one per cent, compared with flat to down one per cent.

Tyson has done contingency planning for sales of U.S. pork and poultry to Mexico due to concerns over Trump’s tariffs, and would move those products to other markets if necessary, King said.

“We’ve been preparing for this, making adjustments. We now have to execute some of those things,” he said.

Trump’s planned 25 per cent tariffs on Canada and Mexico and 10 per cent tariffs on China could help keep grain costs low by triggering retaliation that reduces global demand for U.S. crops, analysts said.

However, the duties could further increase record prices for cattle processed by Tyson, as the U.S. imports livestock from Mexico and Canada. Tit-for-tat tariffs could also hurt demand for Tyson’s meat as Mexico is the biggest export market for U.S. pork, analysts said.

Trump is also cracking down on illegal immigration, though King said Tyson has not seen any raids by immigration authorities on its facilities or a decline in worker attendance in the wake of mass deportation plans.

On an adjusted basis, Tyson earned $1.14 per share in the first quarter ended Dec. 28, compared with estimates of 88 cents.

Sales in its beef unit, the company’s biggest business, rose 6.2 per cent as cattle are being raised to heavier weights after farmers slashed their herds due to drought.

Improving pasture conditions provide an opportunity to increase herds, said Brady Stewart, who leads Tyson’s beef and pork businesses.

But many farmers are not yet keeping female cows, or heifers, on their ranches to reproduce, instead of sending them to slaughter, government data indicates.

“Heifer retention remains frustratingly low, which likely portends beef segment challenges for longer than expected,” JP Morgan said.

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The job cuts are the latest blows to America’s heartland from the biggest U.S. meat company by sales. Tyson has also closed six U.S. chicken plants since the start of 2023 and an Iowa pork plant, laying off thousands of workers.

Tyson faces financial pressure as the nation’s cattle herd has dwindled to its smallest size in decades, raising costs for the animals the company processes into beef. The meatpacker’s chicken business previously suffered after executives misjudged consumer demand.

The company will shut the Emporia plant around Feb. 14, terminating 804 employees, and another five employees at a lab will lose their jobs on Jan. 31, according to a letter it sent to the Kansas Department of Commerce.

The plant has produced products such as seasoned and marinated meats and ground beef, according to Tyson’s website. Workers stopped slaughtering cattle there in 2008 due to tight supplies.

The company, which reaped big profits as meat prices soared during the COVID-19 pandemic, did not immediately respond to requests for comment. Its letter said the closures are part of a strategy to operate more efficiently.

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Tight cattle supplies are squeezing meatpackers, including Tyson Foods, which reports quarterly earnings on Tuesday, and consumers facing high beef prices.

Meat producers had hoped rains would encourage ranchers to begin rebuilding herds in 2024 after years of drought burned up pastures and forced farmers to send more cows to slaughter.

Dryness has instead worsened over the past two months in another blow to processors that must pay up to buy limited cattle supplies.

Across the United States, 62 per cent of cattle were in areas suffering from drought at the end of October, the most since December 2022, according to the U.S. Drought Monitor.

More than half the herd remained in drought zones last week after rains hit the Plains, up from less than 20 per cent for most of the year and just eight per cent in June.

In Nebraska, the nation’s second-biggest cattle-producing state, rancher Chad Engle said dryness has reduced sprawling pastures to yellow, brittle stubble and unleashed plumes of dust into corrals that make his cattle cough and wheeze.

“We had plans to expand our herd but we cannot do that in the teeth of a drought,” said Engle, adding that he culled 10 per cent more of his herd than normal last year.

Ranchers in Oklahoma, the fifth-largest U.S. cattle producer, often sow wheat in September but drought delayed plantings, depriving ranchers of weeks of grazing.

“Drought is the reason why the herd size has come down so much and it’s the only thing holding back ranchers from expanding the herd,” Morningstar equity strategist Kristoffer Inton said.

The lack of pasture and high cattle prices have prompted ranchers to send female cows, or heifers, and young calves to feedlots sooner than normal to be fattened on grain.

With fewer heifers held back on farms to reproduce, an expansion of the herd remains years away, analysts said.

The spike in cattle costs is hurting meatpackers such as Tyson, whose beef business, its largest unit, swung to a loss in the third quarter.

The loss is expected to widen in the fourth quarter, according to investment research firm CFRA, which predicted negative margins of 2.2 per cent.

Early deliveries of heifers and young cattle to feedlots will skew beef production in 2025 toward the first half of the year and result in an even smaller supply in the second half, said Derrell Peel, Oklahoma State University agricultural economist.

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McDonald’s said in a lawsuit filed on Friday in Brooklyn federal court that the meatpackers, also including Cargill and National Beef Packing, collectively reduced their output to drive up industry prices since 2015.

The lawsuit is the latest to accuse the world’s largest meatpackers of violating U.S. antitrust law by coordinating on the price they paid for cattle and on slaughter volumes.

“Only colluding meatpackers would expect to benefit by reducing their prices and purchases of slaughtered cattle because they would know that their conspiracy would shield them from the dynamics of a competitive marketplace,” McDonald’s said in its lawsuit.

JBS, Tyson, Cargill and National Beef did not immediately respond to requests for comment on the lawsuit on Monday. McDonald’s had no immediate comment.

The meat producers have denied any wrongdoing in related cases that have been consolidated in Minnesota federal court. The plaintiffs in those cases include BJ’s Wholesale, Sodexo, Target and Aldi.

The beef meatpackers also face lawsuits from U.S. consumers, cattle producers and others that are seeking class-action status and monetary damages in the Minnesota litigation.

Cattle producers who said they sold animals directly to the meatpackers for slaughter said they lost billions in the alleged scheme, court records show.

McDonald’s has 13,000 branded restaurants in the United States, part of its 39,000 restaurant global footprint in more than 100 countries.

McDonald’s said it was seeking unspecified monetary damages and a court to order an end to the alleged price-fixing conspiracy.

U.S. District John Tunheim in Minneapolis is overseeing the coordinated beef antitrust legal proceedings.

In the first settlement, JBS said in 2022 it would pay $52.5 million to resolve some of the purchasers’ class action claims.

The case is McDonald’s Corp v. Cargill et al, U.S. District Court, Eastern District of New York, No. 1:24-cv-07017-TAM.

For McDonald’s: Philip Iovieno Nicholas and Gravante Jr of Cadwalader, Wickersham & Taft
For defendants: No appearances yet

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“These type of greenwashing claims are on the rise and consumers have a right to know the truth about their food choices,” said Carrie Apfel, an attorney with Earthjustice, on a Wednesday press call.

Earthjustice is representing EWG in the suit alongside the Animal Legal Defense Fund, Edelson PC, and FarmStand.

The suit was filed on Wednesday by the Washington-based Environmental Working Group (EWG) in D.C. Superior Court. Tyson did not immediately respond to a Reuters request for comment.

In 2021, Tyson said it would achieve net-zero emissions by 2050 by increasing its use of renewable energy and eliminating deforestation in its supply chain, among other steps.

The company also markets a brand of “climate-friendly” beef it says is produced with 10 per cent less emissions than conventional beef.

In its lawsuit, EWG alleges that Tyson has not presented a rigorous plan for reaching its net zero goals or details for its lower-emission beef production and is thus misleading consumers with the claims.

Tyson is one of the largest meat processing companies in the United States. The company says it produces 20 per cent of the country’s beef, pork, and chicken and that the majority of its emissions are from beef production.

Livestock production generates about 14.5 per cent of all anthropogenic greenhouse gas emissions globally, according to the United Nations Food and Agriculture Organization. Cattle represent 65 per cent of those emissions.

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