Economic Impacts of the Tyson Beef Plant Closure in Lexington, Nebraska

By Elliott Dennis and Eric Thompson 

Situation

On Friday, November 21, 2025, Tyson Foods announced it would permanently close its beef processing facility in Lexington, Nebraska, effective January 20, 2026. The company also announced it would convert its Amarillo, Texas facility to a single full-capacity shift. The Lexington plant employs roughly 3,200 people and can slaughter almost 5,000 cattle per day approximately 4.8% of total daily U.S. beef slaughter (Dennis and Smith 2025). This marks the first time one of the “Big Four” meatpacking companies has permanently closed a major plant during the current cattle supply crunch.

The purpose of this article is to estimate the economic impact the Tyson beef processing plant closure could have on the state of Nebraska. 

Methods

We use the IMpact analysis for PLANing (IMPLAN) framework model to estimate the impacts of loss of processing capacity on the Nebraska economy. IMPLAN is an input-output model that examines how direct investments multiply through a large economy (Deller and Williams 2009) and is an industry-standard tool for economic impact analysis (John Dunham & Associates, Inc. 2024). The total economic impact from losing the ability to harvest cattle is the sum of the direct and multiplier impact. The direct impact refers to economic activity in production, processing, or both. The multiplier impact refers to additional economic activity which occurs in the local economy. The multiplier impact occurs as cattle operations and/or processing plants purchase supplies and services within the local economy or as their workers spend paychecks on normal household items such as mortgage or rent, insurance, health care, food, fuel, other retail, recreation, entertainment, and other services. Multiplier impacts as a result support businesses throughout the economy. The total economic impact is the sum of the direct and multiplier impact.

Output is the broadest measure of economic impact and refers to the value of business sales. Employee compensation and employment are measures of impact on the labor market. Employee compensation refers to wages, salaries, benefits, and proprietor income. Employee compensation is a component of output and should not be added to the output. Employment includes both full- and part-time jobs. Direct jobs would be expected to be full-time but multiplier employment would occur throughout the economy and could be either full-time or part-time.