Adds analyst comments, latest share price, background throughout

By Tom Polansek and Neil J Kanatt

May 28 (Reuters) - U.S. meatpacker Tyson Foods TSN.N said on Thursday that board member and former Procter & Gamble executive Jeff Schomburger will take over as CEO from company veteran Donnie King in October.

The shuffle rattled some investors and analysts at a time when Tyson has relied on growth in its chicken business to help offset steep losses in its beef segment, which has been under pressure due to tight U.S. cattle supplies.

Meatpackers are processing fewer cattle, with inventories at a 75-year low, and reporting losses in their beef businesses because soaring cattle costs have outpaced gains from record beef prices.

Profits are up in Tyson's chicken business this fiscal year, though, after King led a turnaround. The company reported better-than-expected quarterly earnings and raised its full-year income forecast this month, helped by strong chicken sales.

"Tyson has been doing very well and materially outperforming competitors in its marquee chicken business, and Donnie King has spearheaded that," said analyst Heather Jones of Heather Jones Research. "In light of that, this move creates much uncertainty and questions. This removes the person from the helm that investors really trusted."

Tyson shares fell 6%.

KING REMAINS ON BOARD

Some investors had expected another executive, Devin Cole, to succeed King. Last year, Tyson appointed Cole, who led its poultry and international businesses, as chief operating officer and said he would oversee those units plus beef, pork and prepared foods.

King, who has been with Tyson for more than four decades, took the helm in 2021. He will remain on the company's board and work with Schomburger over the next several months, Tyson said.

Schomburger, a member of Tyson's board since 2016, retired as the global sales officer at P&G PG.N in 2019. He will take over as the meat industry faces increased scrutiny from Washington.

President Donald Trump has accused meatpackers of driving up beef prices through collusion and directed the Department of Justice to investigate them. Tyson is one of four major U.S. beef processors, along with Cargill, JBS and National Beef Packing Company.

This year, Tyson closed a massive beef plant in Nebraska and cut operations at another in Texas, laying off thousands of workers.