Weekly global protein digest: China to limit beef imports

1 January 2026

15 minute read

By: Jim Wyckoff

South America

North America

Asia

China to limit beef imports

China says it will restrict beef imports from suppliers including Brazil and Argentina to protect its domestic farmers and producers, imposing a 55% duty on shipments exceeding certain levels, Bloomberg reported. A series of quotas will be in effect from Jan. 1, with total quotas for all beef imports rising incrementally each year from 2.69 million tons in 2026 to 2.8 million tons in 2028. The trade measures are likely to restrict flows of beef into China and could hurt producers and cattle farmers elsewhere, with the Australian Meat Industry Council warning that its beef exports to China could be slashed by about a third, said Bloomberg. China’s top supplier, Brazil, has been allocated just over 1 million tons a year. Quotas for the U.S. are set at 164,000 tons in 2026, rising to 168,000 tons in 2027 and 171,000 tons in 2028 — well above current trade flows, said Bloomberg.

The affected areas include: Lewis County of the State of Washington and Jessamine County of the State of Kentucky in the US, and Ibaraki Prefecture and Hokkaido Prefecture in Japan. 

A CFS spokesperson said that according to the Census and Statistics Department, Hong Kong imported about 40,060 tonnes of chilled and frozen poultry meat and about 2.62 million poultry eggs from the US, and about 1,540 tonnes of frozen poultry meat and about 219.73 million poultry eggs from Japan in the first nine months of this year.

"The CFS has contacted the American and Japanese authorities over the issues and will closely monitor information issued by the WOAH and the relevant authorities on the avian influenza outbreaks. Appropriate action will be taken in response to the development of the situation," the spokesperson said.

Cattle futures see more chart-based buying

February live cattle on Tuesday rose $1.50 to $230.475. January feeder cattle gained $2.55 to $349.55 and hit another nine-week high. The live cattle futures market saw more technical buying from the chart-based speculators. The near-term chart postures for live and feeder cattle futures remain in favor of the bulls. Higher cash cattle prices fetched last week also supported buying interest in futures today. USDA Monday reported last week’s average cash cattle trade at $229.33—up $1.36 from the week prior.

U.S. challenges China beef safeguard move at WTO

Washington seeks clarity on Beijing’s injury claim as imports slow and trade tensions resurface

The United States has formally requested consultations with China at the World Trade Organization, pushing back against Beijing’s assertion that rising beef imports have caused “serious injury” to China’s domestic cattle industry.

China launched a safeguards investigation into beef imports in December 2024 and has extended it several times, most recently through January 2026. In a recent WTO notification, China said increased imports had harmed domestic producers — but did not spell out any proposed remedy, such as tariffs or quotas.

In response, the U.S. requested WTO consultations under the Safeguards Agreement, saying the talks are intended to clarify China’s injury determination and any safeguard measures under consideration. Washington also pointed to Article 8.1 of the agreement, which requires countries imposing safeguards to maintain a “substantially equivalent” level of trade concessions — often through compensation to affected exporters.

China’s own data show beef imports have risen steadily since 2019, with import market share climbing from about 20.5% that year to nearly 28% in 2023. For the first half of 2024, import share rose further to roughly 31%, up from about 28% a year earlier. Those figures underpin Beijing’s injury claim.

However, U.S. analysts argue the broader trend has shifted. A recent outlook from USDA Foreign Agricultural Service projects only modest growth in Chinese beef imports in 2026, citing weaker household consumption and sluggish demand. Imports in the first five months of 2025 were already down more than 10% from a year earlier, with full-year volumes unlikely to match 2024 levels even if shipments recover later in the year.

The dispute also lands amid a fragile thaw in U.S./China trade relations. A White House fact sheet issued after a November 2025 meeting between Donald Trump and Xi Jinping said Beijing agreed to lift retaliatory tariffs on U.S. beef as part of a broader trade deal. U.S. officials now appear wary that a safeguard action could undermine that commitment.

For U.S. cattle producers and exporters, the WTO talks are an early test of whether China’s safeguard probe becomes a new barrier — or remains a procedural warning shot in an already volatile ag trade relationship.

USDA Hogs & Pigs report revisions: What changed and why it matters

USDA made notable upward revisions to several recent hog and pig estimates in the December Quarterly Hogs and Pigs report, reinforcing the view that actual supplies over the past year were larger than previously reported and that productivity gains were understated earlier 

 What USDA revised. According to NASS, all inventory and pig crop estimates from December 2023 through September 2025 were re-evaluated using updated slaughter data, death loss, and trade flows. Key revisions include:

•  September 2025 all hogs and pigs inventory revised up 1.1%
• June–August 2025 pig crop revised up 2.5%
• June 2025 all hogs and pigs inventory revised up 1.9%
• March–May 2025 pig crop revised up 1.9%

These are material adjustments by USDA standards, especially for pig crop data, which directly feed into supply expectations for subsequent quarters.

Why the revisions matter. The revisions carry several important implications:

• Supply was tighter than believed earlier: Upward revisions mean more pigs were in the system than markets had assumed at the time, helping explain why pork production and slaughter held up better than some forecasts suggested in mid-2025.
• Productivity gains were understated: Larger pig crops, combined with record pigs-per-litter, indicate that efficiency improvements were stronger than initially captured, even as the breeding herd declined.
• Price interpretation changes: Hog prices that appeared strong relative to reported inventories now look less surprising when viewed against a higher revised supply base — suggesting demand absorbed more pork than previously thought.
• Forward-looking caution: Because USDA revisions often occur with a lag, the changes serve as a reminder that initial quarterly estimates can understate turning points, particularly during periods of rapid productivity change.

Bottom Line: The December revisions reinforce a key takeaway from the broader report: the U.S. hog sector in 2024–25 was larger and more productive than earlier data indicated, even without meaningful breeding herd expansion. For analysts, packers, and producers, the revisions underscore the need to interpret short-term price and supply signals with caution — and to watch future revisions closely as USDA continues to reconcile survey data with slaughter and trade realities.

Weekly USDA dairy report

CME GROUP CASH MARKETS (12/26) BUTTER: Grade AA closed at $1.4025. The weekly average for Grade AA is $1.3975 (-0.0505). CHEESE: Barrels closed at $1.4000 and 40# blocks at $1.3350. The weekly average for barrels is $1.4050 (+0.0010) and blocks $1.3356 (-0.0449). NONFAT DRY MILK: Grade A closed at $1.1800. The weekly average for Grade A is $1.1763 (+0.0158). DRY WHEY: Extra grade dry whey closed at $0.7300. The weekly average for dry whey is $0.7188 (-0.0072). 

BUTTER HIGHLIGHTS: Butter production was generally stronger nationwide. Many butter facilities were taking in extra loads of milk and cream at competitive prices due to other facilities' planned downtime during the winter holidays. Cream multiples lowered this week, and contacts anticipate them staying low through the end of the year. Butter churns were operating at or near capacity in many facilities as producers began building their inventory for the new year. Domestic demand for butter was steady to lighter in most regions. International demand was steady to strong. Spot purchasers say strong demand from export purchasers in recent weeks has kept inventories of 82 percent butterfat butter tight but loads of 80 percent butterfat butter remain available. 

CHEESE HIGHLIGHTS: Cheese production in the East was steady to stronger as some plants ran through extra milk while others had planned holiday downtime. Retail demand was steady, while bulk demand remained seasonally light. Export interest was helping to offset lighter bulk activity, and inventories remained balanced. Milk output in the Central region was steady, though holiday downtime limited spot market activity. Cheesemakers were not actively seeking additional spot milk, and production was steady to lighter. Demand eased following the holidays, but overall cheese sales remained solid. Barrel availability was tighter, while blocks were more accessible. In the West, cheese manufacturers continued to receive contract milk volumes, even as milk output ran lighter in some areas. Spot Class III milk loads were more available this week, and plants were keeping production schedules steady. Holiday downtime focused on cutting, packaging, and converting, while buyers' interest remained mixed. Spot cheese loads were generally available across most varieties. 

FLUID MILK HIGHLIGHTS: Nationwide, milk output from the farm was generally stronger this reporting period. Some regions did not experience any volume growth. Milk volumes remain up compared to this time last year. Milk components are seasonally high, providing ample amounts of cream for the market. Slow market activity during the end of year holidays is having a negative impact on demand for all Classes. Bottling facilities continue to be slow as educational institutions remain closed for their winter breaks. Class II production is light, with many facilities not taking their contractual loads. Class III spot sales were up this week with the excess of milk from other producers. Some cheesemakers did not take any extra milk as they planned downtime during the holiday. Spot prices of Class III milk ranged from $9-under to $0.50 over this week. Class IV facilities were more active this week in most areas, with producers taking advantage of cream and milk availability to keep the churns operating at or near capacity. Contacts anticipate cream multiples to remain low for the remainder of the year. The condensed skim market is sloppy according to several contacts and availability is outpacing demand. Most sales of condensed skim were well below Class prices. Cream multiples for all Classes range: 0.90 – 1.25 in the East; 0.90 – 1.10 in the Midwest; 0.85 – 1.18 in the West. 

DRY PRODUCTS HIGHLIGHTS: Low/medium heat nonfat dry milk (NDM) prices increased at the bottom of the range in all regions and increased at the top of the range in the Central and East regions this week. High heat NDM prices were unchanged in the East and Central regions, but the bottom of the West range moved higher. Dry buttermilk prices moved higher at the top of the range in the Central and East regions. The bottom of the West dry buttermilk price range moved higher, while prices were unchanged at the top. Both ends of the dry whole milk price range pushed lower this week. In the East and Central region, dry whey prices were unchanged. In the West, dry whey prices increased at the bottom of the range and decreased at the top. The top of the lactose price range moved lower, but prices were steady at the bottom of the range. Whey protein concentrate prices moved lower at both ends of the range. Acid and rennet casein prices held steady this week. 

ORGANIC DAIRY MARKET NEWS: The Organic Insider from December 23rd provided an update about the National Organic Standards Board Fall 2025 meeting, which is rescheduled to January 13-14, 2026. Federal Milk Market Order 1 reports utilization of types of organic milk by regulated plants. In November 2025, organic whole milk utilization was up from the previous year, and butterfat content was down from a year ago. The utilization of organic reduced fat milk and butterfat content was up from a year ago. Estimated fluid milk product sales in October and year to date compared to the same periods last year. In the week 52 retail survey, total organic dairy ads increased, and ads for the most advertised organic commodity, milk, were up from the prior survey. NOVEMBER MILK PRODUCTION (NASS): Milk production in the 24 major States during November totaled 18.1 billion pounds, up 4.7 percent from November 2024. October revised production, at 18.7 billion pounds, was up 3.8 percent from October 2024. The October revision represented a decrease of 11 million pounds or 0.1 percent from last month's preliminary production estimate.

USDA Dairy: World Markets and Trade 

Milk Production Continues Growth in 2026

Milk production by major dairy product exporters is forecast 0.4 percent higher in 2026 as growth in the United States, Australia, and Argentina offsets slight reductions for the European Union (EU) and New Zealand. Accounting for most of the growth, U.S. milk production is forecast 1.2 percent higher in 2026 as dairy farmers continue to increase herds to supply growth in processing capacity. Growing cheese production is fueling demand for milk while strong exports have also boosted demand for dairy products. Argentina milk production is forecast 4.0 percent higher in 2026, amid good pasture conditions and low feed prices. 

Output is expected to rebound above previous highs reached before production was negatively impacted by drought and high input costs in 2024. Australia milk production is forecast to rebound by 1.8 percent as steady farmgate milk prices and relatively low feed costs will support herd recovery. In particular, improved rainfall in Southwestern Victoria and South Australia in 2025 is expected to lead to production recovery. Output in New Zealand is forecast to contract slightly as the cow herd continues to decline. European Union milk production is expected to decline for the second year in a row due to continued contraction in the cow herd, despite small growth in milk per cow. 

Although EU dairy margins improved during much of 2025, environmental policies and disease continue to weigh on the sector. EU processors are expected to continue to focus on high margin products, like cheese, as total milk production declines. his growth follows a 1.9-percent production decline in 2025 as poor pasture conditions and reduced water availability during the first half of the year limited production. While herd sizes and production in Southwestern Victoria and South Australia are expected to rebound beginning in 2026, production in Northern Victoria and New South Wales remains constrained by reduced availability of irrigation water. The Australia dairy sector experienced significant changes in the last 2 decades. 

The number of Australian dairy farms declined 71 percent from 2002 to 2024, while milk production only fell by 25 percent. Industry consolidation is expected to continue in 2026 as smaller producers, particularly less efficient farms in the northern tropical and subtropical regions, continue to exit the industry. However, expected strong feed availability and strong farmgate prices will support marginally higher herd expansion in southern dairy regions. 

Argentina fluid milk production is forecast to increase 4.0 percent in 2026, reaching 12.0 million tons. This increase builds on an expected 8.5-percent increase in 2025 as feed availability and pasture conditions rebound from 2024. While producer margins in 2025 have declined from 2024 levels, margins remain supportive of continued strong feed use per liter of milk produced, and therefore of higher milk production per cow. Despite anticipated strong production recovery in 2025 and 2026, Argentina milk production remains limited by domestic demand, which has failed to recover to levels seen before 2024. 2026 Argentina fluid milk consumption is expected 31 percent below 2023 levels. Argentina producers will increase WMP production for exports to absorb production.

However, key Argentina export markets including Brazil and Algeria are expecting limited or no import growth in 2026. European Union (EU) fluid milk production is forecast to decline 0.5 percent to 144.8 million tons in 2026, continuing the marginal decline from 2024. The EU dairy herd is anticipated to decline as well, but at a slower pace compared to 2025, as the improved profitability of dairy production has provided some support for retaining cows. In the first half of 2025, feed costs declined and fodder availability improved while EU milk prices remained elevated, supported by strong domestic demand from processors for cheese production. 

In August 2025, EU farmgate milk prices were 12 percent higher year over year and 25 percent above the 5-year average. Despite improved margins, continued pressure on the dairy sector from environmental policies and disease outbreaks is expected to lead to industry consolidation. Environmental regulations – such as the agricultural carbon tax in Denmark and environmental protection regulations in Germany – have contributed to herd reductions. 

In 2025, Bluetongue virus (BTV) and Lumpy Skin Disease (LSD) were reported in several EU member states. These diseases often lead to a temporary drop in milk yield, fertility problems, and elevated mortality rates. The trend of industry consolidation has been exacerbated by lack of generational renewal as the sector fails to attract young producers due to the heavy workload and uncertain profits. While consolidation drives productivity gains, improved efficiency is outpaced by herd contraction, leading to lower milk production.

Weekly USDA dairy report

INTERNATIONAL DAIRY MARKET NEWS

WEST EUROPE: European dairy markets continue to face heavy pressure as oversupply weighs on prices. Raw milk values have fallen to multi-year lows, reflecting abundant milk availability and subdued demand. Cream and skimmed milk concentrate prices continue to weaken, while butter prices remain under pressure heading into early-year delivery. Cheese markets are also trending lower, with declines reported across key varieties. 

EAST EUROPE: Eastern European milk supplies continue to expand, led by Poland, where collections have increased steadily through 2025 on improved yields. Strong milk flows across the region add to overall European supply growth, while global demand remains insufficient to absorb additional volumes. 

OCEANIA: AUSTRALIA: Dairy Australia recently released data on packaged milk sales. In October 2025, milk sales totaled 199.2 million liters, up 0.1 million liters year over year. Dairy Australia recently released export data for Australia showing milk export volumes from July - October 2025 totaled 57,293 metric tons, an increase of 16.0 percent compared to export volume totals from July - October 2024. 

NEW ZEALAND: DairyNZ recently released their quarterly economic update. Overall, margins are expected to decrease but remain comfortable in the 2025/2026 season as the milk price declines and expenses increase. The report updated the breakeven milk price forecast for the 2025/2026 season. The projected breakeven milk price is $8.50 per kilogram milk solids (kgMS). 

SOUTH AMERICA: Argentina's milk production remained strong in November, according to contacts, even after the seasonal peak in October, underscoring a resilient supply. Brazil's dairy market is under pressure as flush season output meets stagnant consumption. Contacts note that domestic prices have weakened, with Ultra-high-temperature (UHT) milk prices falling sharply from mid-year highs into December.