Weekly protein report: Beef prices remain high as tight herd supply continues

25 July 2026

22 minute read

By: Jim Wyckoff

South America

North America

Asia

Oceania

Cattle futures continue to slump on technical selling

August live cattle on Wednesday fell $3.475 to $223.20 and hit a nearly five-month low. August feeder cattle lost $8.375 to $341.175 and hit a six-week low. The cattle futures markets today saw technical selling kick in again, after a brief respite earlier this week. Both markets remain in firmly bearish near-term technical postures, although they have become oversold and are due for corrective upside bounces very soon. Fundamentally, the recent steep drop in the cash cattle market and declining boxed beef cutout values are also keeping cattle futures bulls mostly on the sidelines. Livestock stress continues high in the Plains states and will stay high because of the daily higher heat. USDA at midday Wednesday reported very light cash cattle trading taking place at $232.00. The agency Monday reported average cash cattle trading last week at $238.28, down nearly $10 from the week-prior’s average of $248.01.

Can a deluge of USDA cattle data Friday p.m. stop the bleeding?

A trio of USDA reports due Friday afternoon will be watched for clues a historic cattle-market selloff has run its course. Through Wednesday’s close, August live-cattle futures have dropped over $24 since June 25, a stretch that included a record, 15-day losing streak, while August feeders shed more than $32 over the same stretch. USDA is scheduled to release a slew of reports on Friday afternoon that will provide an update on the supply picture for both cattle and beef, having ramifications for price action following the peak of grilling season. 

Mexico fully reopens market to US pork offal

Removal of PRV curbs restores $6 million to $7 million in weekly trade

Mexico has fully removed its pseudorabies-related restrictions on US pork offal, reopening trade in products including skins, jowls, snouts, stomachs, tongues, hearts and other head meat. The decision applies to newly produced goods and to product that accumulated in the export pipeline while the restrictions were in effect. The US Meat Export Federation (USMEF) estimated the disruption had halted $6 million to $7 million in trade each week.

Mexico imposed the restrictions after USDA confirmed pseudorabies antibodies April 30 in five boars at a small Iowa facility. The animals had originated at an outdoor Texas operation where exposure to feral swine was possible. Pork muscle cuts remained eligible because pseudorabies is not a food-safety threat and does not affect the safety of the commercial pork supply.

Mexico partially eased the restrictions in early June by allowing offal from states other than Iowa and Texas. But source-verification requirements and Iowa’s central role as the largest US hog-producing state continued to make shipments difficult. The impact was evident in May, when US pork variety-meat exports to Mexico plunged 80% from a year earlier to 3,157 metric tons. Total pork and variety-meat exports to Mexico fell 17% to 81,047 metric tons, while value declined $30 million to $185.7 million.

The full reopening is more important than the relatively small share of total pork volume might suggest. Many offal products have limited demand in the US, making access to Mexico — the second-largest foreign market for US pork variety meats after China — critical to maximizing the value of each hog. Restoring shipments should reduce inventory pressure, limit discounting of backed-up products and improve carcass values and processor margins.

Mexico’s decision also validates USDA’s effort to contain the isolated detections and persuade trading partners to recognize the US response. After surveillance found no additional cases and the affected premises were depopulated and disinfected, USDA declared June 17 that the US had regained freedom from pseudorabies in commercial swine.

Colombia, Chile and South Korea have also removed PRV-related restrictions or documentation requirements. China has not formally restricted US pork offal, but its requirement that every shipment be tested is delaying clearance by three to five weeks and generating substantial port and storage costs. Mexico’s reopening therefore removes the industry’s largest immediate PRV-related trade barrier, although exporters still face costly friction in their biggest variety-meat market.

Canadian weaner pigs dodge Trump's new 50% tariff hit

Live hogs absent from Section 338 annexes; dairy, alcohol and autos bear the brunt

Canadian live hogs — including the roughly 6 to 7 million weaner and feeder pigs shipped annually to US finishing operations, mostly in Iowa and southern Minnesota — escaped President Trump's new 50% tariffs on some $20 billion in Canadian goods announced Monday.

The duties, imposed under rarely used Section 338 of the Tariff Act of 1930 via three proclamations targeting Canada's treatment of US dairy, alcohol and motor vehicles, take effect around Aug. 19. The product annexes cover dairy, wine and spirits, autos, lumber, furniture, seeds, textiles and machinery — but no Chapter 1 (live animal) tariff lines, leaving live swine untouched. Energy, potash, fish, critical minerals and goods already under Section 232 duties are expressly excluded.

One flag for the hog trade: the White House says the new duties apply regardless of USMCA qualification. Weaner flows continue duty-free under USMCA for now, but that protection would not apply if live swine were added to a future annex. Final Federal Register notices — the binding text — and additional implementation guidance are expected before the effective date, so product lists could still shift.

Section 338 of the Tariff Act of 1930 lets a president impose duties of up to 50% on imports from countries found to discriminate against US commerce. The authority had never been used in its 96-year history until now, and unlike Section 301 or Section 232 actions it requires no formal investigation. Because the statute caps duties at 50% ad valorem, Monday's action goes in at the maximum rate. The administration frames the move as retaliation for Canadian dairy tariff-rate quota administration, provincial liquor board treatment of US alcohol, and Canada's response on autos. The roughly $20 billion in targeted goods equals about 5% of the $382 billion in US imports from Canada last year.

The North American hog sector is deeply integrated: Canadian farrowing operations, concentrated in Manitoba, Saskatchewan and Ontario, wean pigs that move south under contract to Corn Belt finishing barns. Isoweans (under 7 kg) and feeder pigs (7-50 kg) make up roughly three-quarters of the flow; the rest are market hogs and cull sows moving direct to slaughter.

The trade peaked near 10 million head in 2007 — about 9% of US federally inspected slaughter — then contracted through the mCOOL era and herd consolidation. By 2022 imports had settled around 6.5 million head, roughly 5% of US slaughter. Flows have re-accelerated since: USDA's Ottawa post pegs 2025 exports at about 6.6 million head and sees similar volume in 2026, citing strong weanling prices and disease pressure in US herds supporting demand for Canadian pigs.

Trump opens new front in Canada trade war with 50% tariffs

Section 338 move overrides some USMCA relief and targets $20 billion in goods

President Donald Trump has sharply escalated the US/Canada trade conflict by imposing 50% tariffs on nearly $20 billion of Canadian products, using a Depression-era law that appears never to have been deployed previously to levy tariffs.  

The tariffs, announced July 20 and scheduled to take effect at 12:01 a.m. ET on Aug. 19, respond to three disputes: Canadian restrictions on US automobiles, provincial bans on US alcoholic beverages and Canada’s administration of dairy import quotas. Unlike most previous Trump tariffs on Canada, the new duties will apply even when products qualify for preferential treatment under the US-Mexico-Canada Agreement — but as we noted Monday, some products are still exempt: the new Section 338 action conspicuously spares the inputs US farmers and refiners depend on — energy, potash and critical minerals are all carved out.

The levies cover Canadian alcohol and dairy products as well as hundreds of unrelated goods selected from politically and economically sensitive industries, including hockey equipment, cement, furniture, clothing, seeds, fishing equipment and electronic products.

As noted, Canadian energy, potash, fish, critical minerals and products already subject to Section 232 tariffs are excluded. The exemptions appear designed to limit damage to US fuel supplies, agricultural input costs and industries that depend on Canadian raw materials.

A rare and aggressive legal tool: Trump invoked Section 338 of the Tariff Act of 1930, which permits a president to impose tariffs of as much as 50% when another country discriminates against US commerce or treats American exports less favorably than goods from other countries. The statute requires at least 30 days between a presidential proclamation and implementation.

This is the first known use of Section 338 to impose tariffs during the law’s nearly century-long existence. Trump selected the maximum tariff rate permitted by the statute, underscoring that the action is intended to create immediate negotiating pressure rather than merely offset a precisely calculated trade loss.

The legal authority is more explicit about tariffs than the emergency-powers law rejected by the Supreme Court earlier this year. Still, Section 338 is largely untested in court. Potential litigation could examine whether the administration adequately demonstrated discrimination, whether the products selected bear a reasonable relationship to the alleged Canadian practices and how the tariffs interact with US obligations under the USMCA.

On Dairy: The administration argues that Canada gives European cheese exporters more favorable access under its agreement with the European Union than it gives US suppliers under the USMCA. The dispute focuses primarily on how Canada allocates tariff-rate quotas, including whether retailers may receive quota allocations.

Packer payback? Some in cattle country read a message in the market break

With the Big Four bleeding record red ink and USDA steering $500 million to their regional rivals, an $18 slide in cash cattle has feeders asking whether it's margin math — or a message

The cash cattle market just took its hardest two-week hit in memory — roughly $18, with Kansas and Texas trade sliding to $237–$238 per cwt. last week and August live cattle futures falling to a four-month low. The textbook explanation is margin math. But in cattle country, another theory is making the rounds. As one veteran cattle feeder and futures trader put it to us:

The background: On June 30, USDA Secretary Brooke Rollins unveiled the Strengthening Processing for US Ranchers (SPUR) program — up to $500 million in payments to independent and regional beef processors squeezed by record cattle costs and a 75-year-low herd. The eligibility rules all but name the target: no packer with a “nationally dominant” market share qualifies, a line drawn to exclude Tyson, JBS, Cargill and National Beef, which together control roughly 85% of fed-cattle slaughter. Rollins has called the foreign-owned share of that capacity “unsustainable.” For the majors, watching Washington cut checks to their competitors while they absorb losses of $200–$300 per head — record red ink stretching back roughly six months — surely stings.

Perspective: You don't need a conspiracy to explain the break. Packers losing that kind of money always do what they're doing now — cutting slaughter 2% to 4% below year-ago, idling capacity (Cargill's Fort Morgan plant has sat dark since spring), leaning on formula supplies and bidding cash down. And leverage genuinely shifted: after two years of feeders stretching feeding periods and carrying cattle to heavier weights, the wall of heavyweight cattle finally had to move, handing buyers the whip hand. Market analysts have been blunt that packers are “trying to break the market” — because that is what negative margins demand, SPUR or no SPUR.

Still, the feeder's needle has a point. SPUR hands regional packers relief payments, not slaughter capacity — a regional processor cushioned by a government check still cannot put a competitive bid under fed cattle at scale. When the majors step back, no one steps in. That is the paradox at the heart of the packer-concentration debate: the same 85% market share Washington treats as the problem is also the only thing putting a bid under cattle every week.

Note, too, that if the Big Four were actually coordinating a withholding campaign to punish USDA, that would be squarely in Packers & Stockyards Act and antitrust territory — and there is no evidence of that. The simpler explanation, and the one the numbers support, is that packers are finally exercising leverage the market handed them.

BOTTOM LINE

The $500 million question isn't whether the Big Four are angry — they likely are — it's whether SPUR changes anything structural. Payments keep regional plants alive through the herd-rebuilding trough, but they don't create buying power. Until regional packers can actually compete for cattle, feeders will remain dependent on the very concentration policymakers say they want to fix. As our source concedes, whole-heartedly: without big beef, there is no bid.

USDA’s First 2027 Food Inflation Forecast Puts Beef and Eggs in Focus

Beef may stay costly as egg prices stabilize after a historic retreat

USDA’s Economic Research Service on Friday is scheduled to publish its first Food Price Outlook for 2027, giving consumers, food companies and agricultural markets an initial benchmark for next year’s grocery and restaurant inflation. The debut forecast is likely to be deliberately restrained: it will be based on statistical trends through June 2026, with no observed 2027 prices, and should carry wide prediction intervals. The headline may therefore look relatively calm even as beef, eggs, fresh vegetables, coffee and sugar tell much more volatile stories.

The central question is not simply whether food inflation rises or falls in 2027, but where pressure shifts. Beef prices are still being supported by historically tight cattle supplies, while eggs are emerging from an extraordinary 2025 price spike and 2026 correction. That combination could leave USDA forecasting moderate overall food inflation while showing continued pain in beef and a return to positive, but highly uncertain, egg inflation.

A first forecast built to change

USDA begins forecasting the following calendar year each July and updates the estimate monthly. The Food Price Outlook measures the annual average price level compared with the prior year; it is not a December-to-December forecast and it is not a prediction of what prices will do in the month the report is released. That distinction matters because sharp base effects can make annual inflation look very different from the latest monthly move.

The June 2026 Food Price Outlook projected all-food prices to rise 3.2% this year, including a 2.8% increase for food at home and a 3.6% increase for food away from home. June consumer-price data released afterward showed food-at-home prices 2.7% above a year earlier and restaurant prices 3.4% higher. Those readings are close to USDA’s current annual forecasts, which argues against a dramatic change in the broad 2026 outlook on Friday.

However, category-level inflation remains unusually uneven. Retail beef and veal prices were 11.8% above June 2025, while egg prices were 27.9% lower. Fresh vegetables were up 9.9%, sugar and sweets were up 6.9%, and coffee was up 12.9%. A single all-food number will mask those differences.

Beef: the most persistent grocery store pressure

Beef is the clearest reason USDA may be reluctant to forecast a rapid return to low grocery inflation. USDA now projects US beef production at 25.288 billion pounds in 2026 and 25.200 billion pounds in 2027, both below 2025 output. The agency also forecasts the average slaughter-steer price rising from $251.10 per hundredweight in 2026 to $254.25 in 2027.

That supply picture argues for another year of elevated retail prices. The cattle herd is already at a 75-year low, and any meaningful herd rebuilding would initially tighten beef supplies further because ranchers would retain more heifers for breeding instead of sending them to feedlots. Drought is an important counterweight: poor pasture conditions can force more cows to slaughter and delay rebuilding, temporarily adding beef but prolonging the structural shortage.

The likely 2027 message is therefore continued beef inflation, but probably at a slower annual rate than in 2026. A higher comparison base, strong imports and consumer substitution toward pork and chicken can restrain retail increases. Still, wholesale and farm-level prices suggest beef is unlikely to become a source of outright food-price relief.

Eggs: from deflation to a base effect rebound

Eggs present the opposite forecasting challenge. USDA expects table-egg production to rise 4.4% in 2026 to 7.828 billion dozen and another 2.3% in 2027 to 8.010 billion dozen. The rebuilt laying flock and large inventory of replacement pullets explain why USDA currently forecasts retail egg prices to fall 30.4% in 2026.

Yet the wholesale price outlook already points to a modest rebound. USDA projects New York Grade A large eggs to average 96.8 cents per dozen in 2026 and 107.5 cents in 2027. Retail egg inflation could therefore swing back above zero next year even without another shortage. That would largely reflect the statistical comparison against depressed 2026 prices rather than a return to the extreme conditions seen in 2025.

HPAI remains the decisive risk. A large outbreak in a concentrated production region can remove millions of layers quickly, and egg prices respond faster than most food categories. USDA’s first 2027 egg forecast should be read primarily through the width of its prediction interval, not just the midpoint.

The Cattle border that won’t reopen

A flesh-eating pest has trapped USDA Secretary Brooke Rollins between the ranchers who cheered her rise and a White House desperate to cool record beef prices before the midterms.

For most of the past year, the fiercest fight over the US/Mexico border has not been about people. It has been about cattle — and about a flesh-eating fly most Americans had never heard of until it began chewing its way back toward Texas. USDA Secretary Brooke Rollins is now caught in the middle of it, facing what Politico describes as mounting pressure from her own ranching allies to reopen the southern border to Mexican livestock, even as her department keeps it firmly shut. We have for months reported on this friction.

The pest is the New World screwworm, a parasite the United States spent decades and hundreds of millions of dollars eradicating in the twentieth century. Its larvae burrow into the open wounds of warm-blooded animals — livestock, wildlife, pets, and occasionally people — and can kill a full-grown steer within weeks. After the fly re-emerged in southern Mexico in late 2024 and marched steadily north, USDA has now confirmed 35 cases in Texas and New Mexico, the first domestic detections since the 1960s. What began as an abstract threat is now a resident one.

A closure that outlived its logic

Washington’s first instinct was to wall the pest out. USDA shut the border to Mexican cattle in November 2024, briefly reopened it, then closed it again in May 2025 as new detections surfaced south of the line. A tentative, phased reopening at Douglas, Arizona, in July 2025 was scrapped within 48 hours. The gates have stayed shut since. Rollins, a Texan who built her political identity as a champion of ranchers, argues the closure bought the industry critical time — delaying the pest’s arrival by roughly a year and sparing producers a potentially catastrophic outbreak.

Her critics, a growing coalition of ranchers, meat processors, lawmakers, and even some administration officials, increasingly question whether that logic still holds. The screwworm is already here, they note. Inspected commercial cattle, they argue, could cross safely under strict checkpoints, quarantines, and monitoring — the same protocols that governed the trade for decades. Former USDA officials warn of a perverse side effect: choke off the legal, inspected channel, and you invite cattle smuggling, which carries far greater disease risk than a supervised port of entry. And screwworm, spread by wild animals and stray pets as readily as by livestock, pays no attention to whether a feedlot gate is open or closed.

The supply squeeze behind the sticker shock

The economic stakes are what have turned an animal-health dispute into a political one. In a normal year, the United States imports between 1.1 and 1.2 million head of Mexican feeder cattle — roughly three to three-and-a-half percent of the national feeder supply, and a much larger share for the feedlots of the Southwest. In 2025, with the border mostly sealed, that flow collapsed to around 230,000 head. The crossing at Santa Teresa, New Mexico, which alone handled about half of all Mexican cattle imports at some 1,500 animals a day, went quiet; the New Mexico corridor is worth roughly a billion dollars a year.

That shortfall landed at the worst possible moment. The US cattle herd is already at a 75-year low after years of drought, leaving Southwestern feedlots underused and hungry for animals. Retail ground beef, which sold for around $5.65 a pound in early 2025, climbed to roughly $6.75 by January 2026 and brushed $6.90 in the spring — record territory. Feeder-cattle futures touched historic highs near $379. Analysts estimate the Texas-Oklahoma-New Mexico region could produce a billion fewer pounds of beef this year than it otherwise would. For a White House watching grocery prices ahead of the midterms, beef has become an uncomfortably visible line item.

A rift inside the administration

The result, as Politico reports and this reporter has previously reported on, is a genuine rift inside the Trump administration. Rollins has reportedly resisted advisers who favor reopening the border to bring in more beef and take some heat out of consumer prices. The White House, more attuned to the politics of inflation, has leaned the other way. Complicating the calculus is a strategic worry shared by some Republicans: that the longer Mexican cattle are kept out, the more likely Mexico is to retain those animals, build out its own beef-processing capacity, and emerge as a stronger competitor — a lasting shift in the cross-border trade that a temporary closure could make permanent.

Weekly USDA dairy report

CME GROUP CASH MARKETS (7/17) BUTTER: Grade AA closed at $1.5900. The weekly average for Grade AA is $1.6085 (-0.0415). CHEESE: Barrels closed at $1.6125 and 40# blocks at $1.6275. The weekly average for barrels is $1.5950 (+0.0680) and blocks $1.6055 (+0.0905). NONFAT DRY MILK: Grade A closed at $1.4700. The weekly average for Grade A is $1.5045 (-0.0115). DRY WHEY: Extra grade dry whey closed at $0.6950. The weekly average for dry whey is $0.6940 (+0.0.150). 

BUTTER HIGHLIGHTS: Domestic butter demand is steady across all three regions. Export demand varies from steady to strong. Spot cream loads are tighter in some parts of the country. Spot cream demand from butter manufacturers varies from steady to stronger. Butter production schedules are mixed but are generally busier in the West region. Some stakeholders are more actively seeking open capacity for micro-fixing butter inventories. Spot loads are available for 80 or 82 percent butterfat buyers. Bulk butter overages range from 3 below to 5 above market across all regions. 

CHEESE HIGHLIGHTS: East region cheese production is steady as cheesemakers receive adequate milk supplies. Hot weather is impacting milk volumes and components, but cheesemakers are not concerned. Demand is seasonally soft. Inventories are stable and the market tone is steady to slightly weaker. High temperatures are affecting cow comfort and milk output. Spot milk offers are light, but some contacts are able to secure loads below Class, while other cheesemakers are paying higher prices to keep vats full. Demand is steady, spot loads of cheese are available, but lighter production schedules will tighten inventories. Cheese makers are receiving contractual milk loads and spot milk availability is tight in the West. Production schedules are stable, and production is on pace or slightly ahead of demand for most types of cheese. Domestic and International demand is steady. 

FLUID MILK HIGHLIGHTS: Milk production is mixed across regions this week, with ongoing operational challenges influencing both milk and cream movement. In the East, several facilities encountered unplanned downtime, leading to rerouting of milk and cream to other processors. Cream and condensed skim supplies are ample, and Class II continues to absorb much of the available cream. Condensed skim demand is light to steady, with slight upward price movement reported. In the Central region, summer conditions continue to limit farm level milk output. Some plants experiencing downtime are offering small volumes of spot milk, though overall availability remains lighter. Class I demand is steady to lighter. Demand for Classes II and IV remains strong. Cheesemakers continue to seek additional Class III spot milk, though offers are limited. Class III spot prices range from $2 under to $5 over this week. Butter makers are searching for additional volumes of Class IV supply to maintain churn activity. Across the West, production varies by area. Some California processors report above expected intakes, while processors in other states report lighter farm level output and occasional equipment issues are restricting operating schedules. Open processing capacity is tight in areas such as the Central Valley, and spot milk loads are more limited. Cream is available, with mixed demand. Multiples moved higher at the top of the range. Condensed skim availability in the West is comparatively stronger, with firm interest from buyers in the Central and East regions. Cream multiples for all Classes range: 1.22 – 1.56 in the East; 1.10 – 1.40 in the Midwest;1.00 – 1.24 in the West.

DRY PRODUCTS HIGHLIGHTS: Low/medium heat nonfat dry milk prices moved lower across the prices for all regions except for the Central and East mostly price series moving higher. High heat prices moved lower in both regions. Buttermilk powder prices were lower at both ends in the East and higher on both ends in the West. Dry whey pricing varied in each region. The top of range and mostly series increased in the Central region. Both ends of the range increased in the East, and the West held steady at the bottom but saw a decrease at the top of the range. The lactose price range increased at the top of the range and the mostly price series and held steady at the bottom. Whey protein concentrate 34% price range was unchanged but the mostly series increased at the top. Dry whole milk prices decreased at both ends of the range with trades falling squarely in the middle of the range. Acid and rennet casein prices remained the same this week. 

INTERNATIONAL DAIRY MARKET NEWS: 

WEST EUROPE: A major UK dairy cooperative raised its conventional milk price for July. The organic price remained unchanged. A major European dairy processor reduced its guaranteed milk price for July, reflecting expectations that conventional milk values across northwestern Europe will remain under pressure.

EAST EUROPE: Poland's UHT milk export market remained under modest price pressure in June. Despite softer pricing, Poland maintained steady export activity, Latvia has further strengthened its position in the Eastern European dairy sector with the launch of a new large-scale cheese production facility aimed at expanding export capacity. 

OCEANIA: AUSTRALIA: Dairy Australia reports Australian milk exports are higher from July 2025 to May 2026. Dairy Australia also reports June 2026 production inputs had a sharp decline in overall prices. Fuel prices fell 15 percent as global oil values continued to ease. 

NEW ZEALAND: The spot value of milk decreased. Also, prices for SMP, WMP and milk fats declined. Milk output is generally higher year-over-year. 

SOUTH AMERICA: South American milk production is seasonally lighter. Milk output is reported higher year over-year. Demand from Brazilian buyers is holding up better than Algerian buyers. Prices for many dairy commodities are higher this week compared to the start of July.