Weekly protein report: Dairy markets hold firm as nonfat dry milk prices surge

9 May 2026

16 minute read

By: Jim Wyckoff

North America

Asia

Cattle futures bulls keeping a firm grip

June live cattle on Wednesday rose $0.25 to $253.475. August feeders gained $0.575 to $372.40. The live cattle futures markets bulls were back in business at mid-week, following early-week losses. USDA at midday Wednesday reported very light cash cattle trading taking place at an average price of $255.00 for steers and $255.88 for heifers. USDA Monday reported last week’s average cash cattle trading price at $255.02. That’s $8.84 above the prior week’s average cash cattle price. World Weather Inc. said variable temperatures in the Northern Plains the next seven days could still stress some livestock.

Lean hog futures see technical selling resume

June lean hog futures on Wednesday fell $1.725 to $99.70 and closed at a 4.5-month low close. The hog futures market saw technical selling kick in again at mid-week. The near-term chart posture for June hogs has deteriorated to suggest still more selling from the speculators in the near term. Prices are in a downtrend on the daily bar chart. The latest CME lean hog index is up 7 cents at $91.10. Today’s projected cash index price is up 9 cents at $91.19. The national direct five-day rolling average cash hog price quote Wednesday was $94.75.

US DOJ signals imminent antitrust action in meatpacking probe

• DOJ plans to settle Agri Stats case, White House official says
• Officials preview “historic settlement” as broader protein markets — not just beef — come under scrutiny

Federal officials on May 4 outlined an aggressive escalation of the Justice Department’s antitrust investigation into the US meatpacking sector, signaling that a major enforcement action — potentially a “historic settlement” — is expected within days and could directly impact pricing across chicken, pork and turkey markets.

Acting Attorney General Todd Blanche emphasized that the probe extends beyond beef, with authorities examining alleged practices such as price fixing, bid rigging and coordinated data-sharing. Meanwhile, USDA Secretary Brooke Rollins and White House adviser Peter Navarro highlighted deep industry concentration — with roughly 85% of beef processing controlled by four firms — as a core driver of producer stress, consumer prices and potential national security risks.

Ranchers reinforced these concerns, pointing to long-term declines in cattle operations and reduced bargaining power, while officials confirmed that both civil and criminal enforcement pathways remain under consideration. The anticipated near-term settlement — likely tied to information-sharing practices — is expected to serve as the first concrete outcome of a broader federal push to reshape competition across the protein supply chain.

Tyson lifts outlook as chicken strength counters beef losses

Protein demand supports earnings — but historic cattle shortage deepens industry strain

Tyson Foods Inc. raised its full-year profit outlook, driven by strong consumer demand for protein and improved performance in its chicken and pork businesses. The company now expects adjusted operating income of $2.2 billion to $2.4 billion for the fiscal year, an increase of $100 million from its prior guidance.

The upgrade reflects resilient demand trends that have allowed Tyson to push through higher beef prices and lean more heavily on lower-cost proteins. Meanwhile, the company’s chicken segment continues to outperform, with second quarter adjusted operating income rising 27% year over year to $523 million, supported by stronger pricing and operational efficiencies.

Despite the improved outlook, Tyson’s beef division remains under significant pressure. The company widened its expected losses for that segment, now projecting a $350 million to $500 million loss in 2026 — underscoring the severity of ongoing supply constraints. The US cattle herd has fallen to its smallest level in 75 years, driving input costs sharply higher and leaving processors losing money on each animal processed.

The supply crunch is being exacerbated by widespread drought conditions, with more than 70% of US cattle located in affected regions, limiting pasture availability and discouraging herd rebuilding. At the same time, cross-border supply risks are rising, as imports of live cattle from Mexico face disruption due to the spread of the New World screwworm parasite.

Tyson has taken steps to resize its beef operations — including plant closures and reduced shifts — but analysts indicate that meaningful relief will take time to materialize. Meanwhile, the broader meatpacking sector is facing increased scrutiny, as President Donald Trump has directed the Justice Department to investigate industry practices amid record beef prices and longstanding concerns about market concentration. (See related item in Blue Box news items.)

In the near term, Tyson’s strategy is clear: lean into chicken and other proteins where margins remain favorable, while navigating a structurally tight cattle market that continues to weigh on profitability across the beef supply chain.

Pseudorabies detected in US swine herds triggers coordinated response

Iowa and Texas cases linked through animal movement, with feral swine exposure cited as likely source

USDA’s Animal and Plant Health Inspection Service (APHIS) has confirmed cases of pseudorabies in commercial swine herds in Iowa and Texas, prompting an immediate containment and eradication response led by state and federal officials. According to Iowa Secretary of Agriculture Mike Naig, the Iowa case involves a small commercial herd that had recently received animals from the affected Texas operation, where outdoor housing conditions likely allowed contact with infected feral swine.

Naig emphasized that Iowa officials are “moving decisively to eliminate the disease,” highlighting years of preparation for animal health incidents and coordination with partners including USDA APHIS, Iowa State University College of Veterinary Medicine and industry stakeholders. The response underscores the vulnerability of domestic herds to pathogens still circulating in wild swine populations, despite prior eradication successes.

Pseudorabies was officially eliminated from US commercial swine herds in 2004 following a long-running state-federal-industry campaign. However, the virus persists in feral swine, which remain a key transmission risk to domestic livestock operations—particularly those with outdoor exposure or biosecurity gaps.

Officials stressed that the outbreak does not pose a food safety or public health risk. The virus does not affect humans, and the US pork supply remains safe. Consumers are advised, as always, to handle and cook pork properly, but no additional precautions are required.

State Veterinarian Dr. Jeff Kaisand and Secretary Naig are scheduled to provide further details during a virtual media briefing, as containment efforts continue and trace-back investigations assess the extent of exposure

USDA Lowers 2026 Food Inflation Outlook

Revised forecasts show price growth moderating toward long-term averages as declines emerge in key categories

USDA has revised its 2026 food price outlook lower, signaling easing inflation pressures across grocery stores and restaurants. Updated projections show overall food prices rising closer to their 20-year averages, with notable downward revisions in several key categories, including beef and eggs.

USDA now expects all food prices to increase 2.9% in 2026, down from a 3.6% forecast in March. 

Grocery prices, or food at home, are projected to rise 2.4%, compared to the prior estimate of 3.1%.

Restaurant prices, or food away from home, are seen increasing 3.6%, slightly below the earlier 3.9% forecast. 

Perspective: If realized, these figures would align closely with long-term averages of 3.0% for all food, 2.6% for groceries, and 3.5% for restaurants.

Within food categories, price trends remain mixed. Seven categories — including beef and veal, fish and seafood, fresh vegetables, processed fruits and vegetables, sugar and sweets, nonalcoholic beverages and other foods — are expected to rise faster than their historical averages. Meanwhile, pork, poultry, cereal and bakery products, fresh fruits and other meats are forecast to increase at a slower pace than usual.

Only a handful of categories are projected to decline outright in 2026. Egg prices are expected to fall sharply by 29.4%, a deeper drop than previously anticipated, while dairy prices are forecast to decline 1.4%, and fats and oils are expected to decrease modestly by 0.8%. These declines reflect improving supply conditions and easing pressures from prior disruptions.

Beef prices, while still rising, are now expected to increase at a more moderate pace. USDA forecasts a 6.3% increase in retail beef and veal prices, a significant reduction from the 10.1% increase projected in March. Despite stable cattle inventories, consumer demand has remained firm, supporting prices even as the rate of increase slows. Pork prices are also expected to see minimal growth, rising just 0.4% in 2026.

The outlook for eggs and poultry continues to be shaped by the ongoing highly pathogenic avian influenza (HPAI) outbreak in the US However, USDA noted fewer new detections in early 2026 compared to the same period in 2025, along with sufficient availability of replacement birds to maintain production. As a result, egg prices are expected to fall more sharply than previously forecast, while poultry prices are projected to rise modestly by 0.7%.

A broad category labeled “other foods,” which accounts for roughly 12.5% of the food price index, is expected to increase 3.3% in 2026. This category includes a wide range of processed and packaged items such as frozen meals, snacks, sauces, baby food, condiments and prepared foods, making it a significant contributor to overall food inflation trends.

Meanwhile, the overall composition of food spending remains unchanged, with grocery purchases accounting for 60.9% of total food expenditures and restaurant spending making up the remaining 39.1%.

Bottom Line: Despite the more moderate outlook, USDA cautions that food price forecasts have become increasingly volatile. Data disruptions during the fall 2025 government shutdown required the use of statistical models to estimate missing Consumer Price Index figures, and monthly forecast revisions have varied significantly since a new methodology was introduced in 2023. This suggests that further adjustments are likely as market conditions continue to evolve.

Protein boom offers lifeline for struggling US farmers

Rising demand for pulse crops offsets weak grain prices, high input costs, and trade pressures

A surge in demand for protein-rich foods — fueled by GLP-1 weight-loss drugs and social media diet trends — is emerging as a rare bright spot for US farmers grappling with low crop prices, high input costs and trade disruptions, according to reporting by Reuters.

The broader farm economy remains under pressure, with a grain oversupply, tariff-related trade tensions and elevated fertilizer and diesel costs squeezing margins. US farmers are now facing a fourth consecutive year of low-to-negative profitability, even as government support remains near record levels. Meanwhile, farm bankruptcies jumped 46% from 2024 to 2025, underscoring the severity of the downturn.

Against that backdrop, pulses — including peas, lentils and chickpeas — are gaining traction as a more profitable alternative. Farmers are shifting acreage away from wheat toward pulses, citing significantly better margins. One Montana farmer estimates losses of roughly $35 per acre on wheat compared to profits of about $8 per acre on lentils, highlighting the growing economic divergence between traditional grains and protein crops.

The appeal of pulses extends beyond pricing. These crops require relatively low fertilizer inputs due to their natural nitrogen-fixing properties — a key advantage as the US/Iran conflict disrupts global fertilizer supplies and drives up costs. Industry leaders argue this structural benefit positions pulses to outperform in a high-input-cost environment.

Demand is being driven in part by a broader shift in consumer behavior. Food manufacturers are increasingly incorporating pea protein and lentil-based ingredients into mainstream products, from cereals and pasta to beverages and snack foods. This innovation wave has accelerated since the pandemic, supported by health trends and aggressive marketing around protein consumption.

However, some nutrition experts warn that the protein boom may be overhyped. Research suggests that most Americans already consume sufficient protein, and critics argue that “protein-maxxing” trends promoted on platforms like TikTok may be more about marketing than actual dietary need.

Still, for farmers facing mounting financial strain, the shift toward pulses is less about dietary debates and more about survival. With domestic consumption rising — even as exports of yellow peas have dropped sharply — producers are increasingly betting that protein demand will remain strong enough to stabilize incomes in an otherwise challenging agricultural economy.

Weekly USDA dairy report

CME GROUP CASH MARKETS (5/1) BUTTER: Grade AA closed at $1.5950. The weekly average for Grade AA is $1.6505 (-0.0505). CHEESE: Barrels closed at $1.6150 and 40# blocks at $1.6400. The weekly average for barrels is $1.6150 (+0.0240) and blocks $1.6430 (+0.0240). NONFAT DRY MILK: Grade A closed at $2.2625. The weekly average for Grade A is $2.2590 (+0.0220). DRY WHEY: Extra grade dry whey closed at $0.6975. The weekly average for dry whey is $0.7025 (+0.0030). 

BUTTER HIGHLIGHTS: Stakeholders in the West and Central regions report steady domestic butter demand. Stakeholders in the East region report demand varies from steady to strong. Food service demand is lighter than anticipated this time of year for some sellers. Export demand is steady. Spot cream loads are available, but butter manufacturers are mainly relying on contractual intakes and only adding moderate spot volumes to run through their churns. Butter production schedules are churning cream seven days a week. US butter prices continue to bring international buyer interest. Bulk butter overages range from 2 cents below to 5 cents above market across all regions. 

CHEESE HIGHLIGHTS: Northeast milk supplies are ample, supporting strong cheese production. Bulk demand is rising, retail sales are steady and exports remain stronger than expected. Inventories are growing due to high milk volumes, but contacts anticipate future sales will rebalance stocks. Central region milk output is steady and above year-ago levels. Class III spot milk trades are light, priced $5-under to flat. Cheesemakers’ schedules are busy. Barrel demand is strong and block demand is steady to strong. Retail buying is steady, food service is soft and export demand is strong with adequate spot availability. Western region milk and cream output is adequate for contractual needs, though spot milk varies. Cheesemaker demand is moderate, with active cream cheese and seven-day cheese schedules. Some plants remain heavily contract focused, but spot cheese is available. Retail demand is stable and export demand strong. 

FLUID MILK HIGHLIGHTS: Nationwide, milk volumes are sufficient to meet production demands. Some regions are experiencing spring flush, while other areas are past prime spring flush. Year over year milk production remains up. Class I demand is steady nationwide but is expected to drop as the month of May progresses. Class II demand is strong. Seasonal demand for ice cream and other fluid products is drawing spot cream supplies, keeping cream multiples high. Class III demand is steady to strong. Cheese production schedules are full, and whey demand will maintain this trend moving forward. Class III milk spot sales range from $5-under to flat Class this week. Class IV demand is steady to strong. There are very few spot sales of cream for butter manufacturers, but milk intake is high at many butter and powder manufacturers. Condensed skim is difficult to find on the spot market. Class II nonfat solids are driving prices higher, but demand remains steady to strong. Cream multiples for all Classes range:1.15 1.42 in the East; 1.15 – 1.35 in the Midwest; 1.08 – 1.28 in the West. 

DRY PRODUCTS HIGHLIGHTS: Nonfat dry milk prices rose sharply this week, with several double digit increases across all regions and heat levels. The most notable gain occurred at the bottom of the mostly range for low/medium heat in the West. Dry buttermilk prices moved higher in every region, with the West showing the strongest increases. Dry whey markets were mostly steady, though slight upward movement was noted at the bottom of the Central price range and the top of the East price range. Lactose prices strengthened at both ends of the price range, including a significant increase at the bottom, while the mostly range held steady. Whey protein concentrate (WPC) 34% prices strengthened throughout the price series, highlighted by a notable increase at the top of the price range. Market activity slowed this week, partly due to an industry event. Dry whole milk prices were unchanged at the lower end of the range but moved higher at the top. Acid casein prices held steady, while rennet casein prices increased at the top of the range. 

ORGANIC DAIRY MARKET NEWS: The Spring 2026 meeting of the National Organic Standard Board (NOSB) is scheduled for May 12-14 in Omaha, NE. The NOSB meets biannually to discuss recommendations for the USDA to aid in developing and refining organic standards. The Pennsylvania Monthly Organic Dairy Report, a report created as part of the Organic Dairy Initiative sponsored by the 2018 farm bill, covering February 2026 was released on May 1, 2026. This report showed the weighted average price for fluid milk decreased by 2.47 percent from January. The Vermont Monthly Organic Dairy Report, a report created as part of the Organic Dairy Initiative sponsored by the 2018 farm bill, covering February 2026 was released on May 1, 2026. This report showed the weighted average price for fluid milk increased 1.33 percent from January. European organic milk average pay prices for February 2026 decreased in Austria, France, Germany and Bavaria compared to January. The average pay price in February 2026 was up from a year ago in France, Germany and Bavaria, but was down in Austria. 

NATIONAL RETAIL REPORT: In week 18 conventional dairy advertisements grew 67 percent, and organic ads are up 38 percent. Cheese appeared in the largest number of conventional retail ads, while the most advertised organic commodity is milk. The second most advertised commodity in both the conventional and organic aisles is yogurt.

US/China revive ‘Board of Trade’ concept ahead of Trump/Xi summit

Greer frames new mechanism to stabilize trade flows, expand agricultural access, and manage tensions amid Iran war disruptions

US Trade Representative Jamieson Greer said Thursday that Washington and Beijing are actively discussing the creation of a government-to-government “Board of Trade,” according to Bloomberg Government, positioning the concept as a structured mechanism to manage economic ties and reduce friction between the world’s two largest economies. The proposal emerged during a call with Chinese Vice Premier He Lifeng that also included Treasury Secretary Scott Bessent, with US officials emphasizing the potential for such a body to “optimize bilateral trade in non-sensitive goods” while reopening channels for agricultural market access.

The renewed push reflects a broader effort by the Trump administration to re-establish a formalized economic dialogue with China after earlier frameworks — including the Obama-era Strategic and Economic Dialogue — were scrapped during President Donald Trump’s first term. Greer has been advancing the idea since March talks in Paris, envisioning the Board as a more transactional platform that would explicitly define which goods the US and China should be trading, rather than relying on broader, less targeted diplomatic engagement.

Agriculture remains central to the US pitch. Greer underscored the importance of expanding Chinese market access for US producers, a longstanding priority given persistent disputes over tariffs, sanitary standards and enforcement under prior trade agreements. For US agriculture, a structured Board of Trade could provide a more predictable framework for resolving export barriers — particularly critical as global supply chains remain under stress.

Those strains are intensifying due to the ongoing Iran war, which has injected volatility into energy markets and complicated US-China relations. Disruptions in the Strait of Hormuz have driven up oil and gas prices, placing pressure on major importers like China and adding urgency to economic coordination. Meanwhile, US sanctions targeting Chinese refiners processing Iranian crude — and allegations from President Trump that Beijing may be indirectly supporting Tehran — have added a geopolitical edge to the economic dialogue.

The timing is particularly sensitive ahead of the planned May 14–15 summit between President Trump and Xi Jinping, which had already been delayed once due to the conflict. Financial markets are closely watching the meeting for signs of stabilization in US/China relations, especially as trade, energy security and regional flashpoints increasingly intersect.

Meanwhile, diplomatic engagement is continuing on multiple fronts. Secretary of State Marco Rubio also spoke with Chinese Foreign Minister Wang Yi, with Beijing reiterating that Taiwan remains the most sensitive issue in bilateral ties — underscoring that even as economic mechanisms like a Board of Trade are explored, core strategic tensions remain unresolved.