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Tyson Foods: How an Arkansas Chicken Hauler Became a Major Beef Processor

John Tyson started selling chickens in 1935, and the company he founded later bought IBP and became a leading beef processor.

How did Tyson Foods start?

Tyson Foods began in 1935, when John Tyson started selling chickens from Springdale, Arkansas, according to a FundingUniverse company history. The business was incorporated in 1947 as Tyson Feed & Hatchery and went public in 1963 as Tyson's Foods, Incorporated.

Beef was no part of the early story. Tyson grew first in poultry, and its path to cattle ran through acquisition. The same company history shows Tyson reaching for new businesses in each decade, from hogs to seafood to beef, and the pattern explains why a chicken company ended up among the largest cattle buyers in the country.

Don Tyson and the growth years

After John Tyson's death in 1966, his son Don Tyson became president and led the company's expansion. Between 1977 and 1986 Tyson became the nation's largest hog producer and then the leading poultry processor.

In 1989 it acquired Holly Farms for about $1.29 billion, nearly doubling its national market share. Don Tyson retired as chairman in 1995, the company merged with Hudson Foods in 1998, and John Tyson, Don's son, became CEO in 2000.

The Key to Tyson's Success

Tyson's record is a story of steady acquisition and family control. Each major purchase widened its protein business, and the IBP deal made it a beef power.

The record also includes setbacks, such as a seafood write-down.

  • Vertical start: the company began as a feed and hatchery business and kept close to poultry production.
  • Public capital: it went public in 1963, which supported later growth.
  • Acquisitions: Holly Farms (1989, about $1.29 billion), Hudson Foods (1998) and IBP (2001, about $4.4 billion).
  • Family control: the Tyson family held about 80 percent of voting power around 2001.
  • Leadership continuity: Don Tyson led from 1966, and John Tyson became CEO in 2000.
  • Limit to note: a move into seafood led to a $205 million write-down in 1994.

Buying IBP and entering beef

In 2001 Tyson acquired IBP for about $4.4 billion, which FundingUniverse says made it the world's largest processor and marketer of chicken, beef and pork. The Living History Farm article dates the purchase to 2002 and calls Tyson the first of the new Big Four beef packers, so sources differ on the year.

IBP, founded as Iowa Beef Packers, had popularized boxed beef and by 1974 had become the world's largest beef packer, according to the Encyclopedia.com profile of IBP. Its beef business now operates as Tyson Fresh Meats.

Where Tyson fits in the beef industry

Living History Farm lists four large beef packers in the 2000s, Tyson, Excel (a Cargill subsidiary), Swift & Company (bought by JBS in 2007) and National Beef. The article describes the newer packers as set up in rural states near feedlots, with mostly non-union labor and with small cattle operators squeezed out as they grew.

The same account notes that new packers drew labor strife and environmental fines, and that IBP's waste-to-product practices drew scrutiny during the early mad cow disease scare. Read the Living History Farm article on the packing shift for the full context.

Learn more

For the ranches and feedlots that supply plants like Tyson's, farm.FM covers cattle ranching, and a farm.FM story about beef plants and cattle follows the chain forward.

Timeline

  1. 1935John Tyson starts selling chickens in Springdale, Arkansas
  2. 1947Business incorporated as Tyson Feed & Hatchery
  3. 1963Company goes public
  4. 1966Don Tyson becomes president after John Tyson's death
  5. 1989Acquires Holly Farms for about $1.29 billion
  6. 1994Takes a $205 million write-down on seafood
  7. 1998Merges with Hudson Foods
  8. 2000John Tyson becomes CEO
  9. 2001Acquires IBP for about $4.4 billion (one source says 2002)

Frequently asked questions

When was Tyson Foods founded?

Tyson Foods began in 1935, when John Tyson started selling chickens from Springdale, Arkansas. It was incorporated in 1947 as Tyson Feed & Hatchery.

When did Tyson buy IBP?

FundingUniverse says Tyson acquired IBP for about $4.4 billion in 2001. Living History Farm dates the purchase to 2002, so sources differ.

Is Tyson a beef company?

Tyson began in chicken but entered beef by acquiring IBP. Its beef business operates as Tyson Fresh Meats, one of the largest U.S. beef packers.

Who led Tyson Foods?

John Tyson founded it, Don Tyson became president in 1966 and led its expansion, and John Tyson, Don's son, became CEO in 2000.

Sources and further reading

Profiles are compiled from public sources and reviewed against them. See our editorial policy to suggest a correction.

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