A new economic study from the University of Nebraska-Lincoln (UNL) estimates that the permanent closure of the Tyson beef processing plant in Lexington, NE, will cost the state $3.283 billion annually and eliminate more than 7,000 jobs, underscoring the far-reaching consequences for Nebraska’s rural economy.
On Nov. 21, 2025, Tyson Foods announced it would permanently shut down its Lexington facility effective Jan. 20. The plant employs roughly 3,200 workers and can harvest nearly 5,000 cattle per day—about 4.8% of total daily U.S. beef slaughter—making it the first beef plant operated by one of the Big Four packers to permanently close during the current cattle supply crunch.
Statewide economic impact
According to the UNL analysis, the estimated annual labor income loss is $530.431 million, tied to 7,003 jobs. That figure includes the 3,212 direct plant positions eliminated, as well as thousands of additional jobs in supporting sectors affected by reduced household spending and business activity.
The UNL study also projects substantial reductions in public revenues. Annual state personal income tax losses are estimated at $23.209 million, while state sales tax revenues are expected to decline by $10.163 million per year. Local sales tax revenues accruing to Dawson County are projected to fall by $2.771 million annually.
While the estimates reflect statewide impacts, researchers emphasized that the losses will be concentrated in Dawson County and surrounding communities where plant employees live, shop and commute. For Lexington, the plant has served as an economic anchor for more than three decades, shaping housing, schools, health care and local commerce.
To isolate the effects of the plant closure itself, the UNL study assumes that cattle production in Nebraska continues after the shutdown, with animals redirected to other packing plants. The economic contribution of cattle production and the broader beef industry is netted out of the model to focus on the loss of processing capacity.
Researchers noted that the estimated losses could be larger if a greater share of cattle processed at the Lexington plant were sourced from Nebraska feedlots, or smaller if the total value of beef sold declines.
State response
As the economic fallout becomes clearer, state leaders have moved to support displaced workers. On Dec. 18, Nebraska Gov. Jim Pillen (R) announced progress updates on workforce response efforts tied to the Tyson closure.
“Lexington has been and will continue to be an all-American community,” Pillen said. “We want to make sure of that. The state is engaging to the greatest extent possible to help people meet immediate needs and identify employment opportunities.”
According to the press release, more than 1,600 individuals attended Rapid Response layoff services events and job fairs at the Dawson County Fairgrounds and Lexington Middle School. Participants received information on unemployment insurance, workforce training and retraining programs, and community services. Nearly 600 people have registered on the Nebraska Department of Labor’s NEworks employment website. More than 150 employers have participated in outreach and job fairs to connect displaced workers with new opportunities.
Perspective from health care
In an open letter to Tyson leadership dated Dec. 14, Jason Douglas, CEO of Lexington Regional Health Center, described the human and health care consequences.
Douglas wrote that many affected workers are immigrants who came to Lexington legally “because they believed in what America promised: opportunity through hard work.” He said those families built their lives around the expectation of stable employment, buying homes, enrolling their children in local schools, joining churches and becoming deeply rooted in the community.
From a health care perspective, Douglas warned that the sudden loss of thousands of employer-sponsored insurance plans will create immediate strain on rural medical systems.
“When thousands of people lose employer-sponsored insurance simultaneously, the ripple effects hit our emergency department, our clinics, and our beds,” he wrote, noting that decisions made “in a boardroom in Arkansas have consequences that cascade through every aspect of life here.”
He further pointed to executive compensation and company profits, writing that he was keenly aware that Tyson Foods CEO Donnie King earned $22.8 million in 2024 and Chairman John H. Tyson earned $18.4 million, while the company reported $474 million in net income. Under those circumstances, Douglas argued, the closure was not unavoidable, but a choice.
“You made a spreadsheet decision in Springdale, Arkansas,” he wrote, “and 3,200 families in Lexington, Nebraska, became nothing more than a line item.” — Charles Wallace, WLJ contributing editor
