8 August 2025

12 minute read

By: Jim Wyckoff

South America

North America

Asia

China wants its hog producers to scale back

China is urging top hog farmers to scale back breeding herds by about 2%, the latest push to reduce oversupply in the country’s food sector, which has sparked concerns over deflation. Farmers’ representatives are expected to gather next week to discuss effective ways to shrink sow herds by 1 million, along with other measures to rein in pork production, China’s state-backed official husbandry association said in a notice, as reported by Bloomberg. China has organized meetings to discuss reining in pork production recently, signaling Beijing’s commitment to support prices of the country’s most consumed meat. China is the world’s top pork producer and consumer. However, consumption of pork in China has been tepid due to a slowing economy that has strained consumers’ purchasing power. China’s pork prices have dropped nearly 20% in the past year, said the report.

China extends beef import probe amid supply glut

Extension offers temporary relief to major exporters like US, Brazil and Australia

China has extended its investigation into beef imports by three months to Nov. 26, delaying any immediate trade restrictions as its domestic cattle sector works to reduce oversupply. The probe, launched in December 2024, is not aimed at any specific country but could impact key suppliers such as the U.S., Argentina, Brazil, and Australia. Analysts say the delay gives Beijing time to assess whether the local industry can recover profitability without curbs. China’s imports dropped 9.5% year-over-year in the first half of 2025 after a record 2.87 million metric tons in 2024.

Cattle futures bulls keeping their foot on the gas

Technical buying from the speculators was featured in the live cattle and feeder cattle futures markets Tuesday, amid no strong, early chart clues that market tops are close at hand. And the speculative cattle futures bears do not want to step in front of a steaming locomotive. Cash cattle and beef market fundamentals remain strong. Cash cattle prices last week rose $3.79 to $243.17, which is a new record high. Very light cash cattle trade has occurred this week, with an average price at $240.00.

US beef inventory trends

Heifer retention remains weak, making cow slaughter the key driver in 2025

Kenny Burdine of the University of Kentucky warns that low levels of heifer retention suggest beef cow slaughter will be the main determinant of U.S. cattle inventory trends for the remainder of 2025. In a detailed market note, Burdine says “heifers, as a percentage of on-feed inventory, were estimated at 38.1% in the July Cattle-on-Feed report. This is not a number that suggests widespread retention.” The mid-year USDA report pegged the number of heifers held for beef cow replacement at 3.7 million head — 100,000 fewer than a year ago.

Burdine noted that while intentions can shift, “cow slaughter is much more definitive. Cows that have been slaughtered are gone and all that can change is the pace of beef cow slaughter going forward.” Through mid-year, beef cow slaughter was down more than 17% year-over-year. If that trend holds, he projects nearly 500,000 fewer beef cows could be slaughtered in 2025 compared to 2024.

He framed the retention figure in broader historical context: “As a percentage of estimated July 1 beef cow inventory, heifers held for beef cow replacement came in at 12.9%... the smallest percentage in the mid-year dataset, which goes back to 1973.”

Although Burdine expects a modest inventory increase heading into 2026, he emphasized that “how significant that increase is, will be determined by the pace of beef cow slaughter for the balance of 2025.”

Bottom Line: With strong cull cow prices and the bulk of calving and weaning yet to play out this year, Burdine concluded, “the rest of this year will be interesting to watch for beef cow harvest patterns.”

Tyson Foods raises full-year revenue forecast

This comes after Tyson posted stronger-than-expected third-quarter results, driven by resilient consumer demand for chicken and ready-to-eat meals. The company now expects 2025 revenue to grow 2%–3%, up from a prior forecast of flat-to-1% growth. While profit margins expanded in Tyson’s chicken and prepared foods segments, its beef business worsened due to tight U.S. cattle supplies. Tyson expects beef losses between $375 million and $475 million this fiscal year. Chicken operating income, by contrast, is now projected at $1.3–$1.4 billion — an upward revision. Third-quarter net sales rose 4% to $13.88 billion, beating expectations, while adjusted earnings hit 91 cents per share versus a 78-cent forecast. Tyson shares rose nearly 5% in premarket trading.

Brazil redirects beef shipments amid US tariff shock

Exporters scramble as 50% duty threatens $1 billion in trade losses

Roughly 30,000 tonnes of Brazilian beef were caught in transit or awaiting export to the US when President Donald Trump announced a 50% tariff on Brazilian products, effective Aug. 1. While some shipments continued toward US ports in hopes of arriving before the deadline, others were rerouted to countries like Mexico, according to Valor.

Roberto Perosa, president of the Brazilian Beef Exporters Association (Abiec), warned the sector could lose up to $1 billion in trade, with roughly 200,000 tonnes originally projected for US export in the second half of 2025. From January through June, Brazil shipped 181,500 tonnes to the U.S., generating $1.04 billion in revenue.

The new 50% tariff would bring total duties on Brazilian beef to 76.4%, effectively closing the U.S. market for Brazilian exporters. Major packers like JBS, Minerva, and Astra scrambled to either reroute cargo or risk delivery ahead of the tariff. Minerva diverted some shipments to Mexico, while Astra returned product to its plant or risked transit on a narrow timeline.

Despite rerouting efforts, Perosa noted no other market can fully absorb the volume once destined for the U.S. He also argued that Brazil remains unmatched in both price and supply scale, particularly for the U.S. processing industry. With U.S. cattle herds at historic lows, the tariff could tighten domestic beef supply even further.

Screwworm threat looms over US cattle industry

Parasitic fly once eradicated is advancing toward Texas, raising fears of beef supply shocks

After avian flu devastated poultry flocks and spiked egg prices, another biological threat is now bearing down on American agriculture: the New World screwworm. The parasitic fly, eradicated from the U.S. in the 1960s, is creeping toward the Texas-Mexico border — and ranchers fear the country is not prepared, according to a New York Times article (link).

“If we wait, we lose,” warned Stephen Diebel, vice president of the Texas and Southwestern Cattle Raisers Association, during a state legislative hearing. He and others are urging immediate action to prevent an outbreak that could decimate cattle herds already weakened by drought and high feed prices.

The screwworm, or Cochliomyia hominivorax, lays hundreds of eggs in open wounds. Larvae hatch and consume the flesh of live animals, often killing cattle within two weeks. As Texas Agriculture Commissioner Sid Miller put it: “It’s like something out of a horror movie... quite a putrid sight.”

While a joint U.S./Panama sterilization program kept screwworm south of Central America for decades, rising temperatures, illegal livestock transport, and migration through the Darién Gap have pushed the pest to within 370 miles of Texas.

Economic risk is steep:

• U.S. cattle inventory is already at a 70-year low.
• Ground beef prices hit a record $5.98/lb in May.
• Brazil — a major global exporter — could offset shortages, but President Trump imposed a 50% tariff on Brazilian beef (see related items in blue box and in this section).

The federal response includes:

• An $8.5 million USDA program to release sterile flies in Texas.
• A $21 million investment to upgrade a Mexican facility for mass fly production.
• Legislation proposed by Sen. John Cornyn (R-Te.) for a $300 million domestic sterile fly factory, currently stalled as Congress is out for summer recess.

But experts warn this is far short of what’s needed. “We are desperately short on sterile fly production,” Diebel said, noting that past eradication efforts released up to 600 million sterile flies weekly — far more than the current output goal.

Texas lawmakers are weighing state-level solutions, mirroring their earlier approach to border security. “With New World screwworm, this state can do the same thing,” said Charles Maley of the South Texans’ Property Rights Association.

With the screwworm moving quickly north, Commissioner Miller estimates it could reach Texas within four months — and the economic effects are already being felt. U.S. cattle imports from Mexico, which supply roughly 3% of the market, have been halted multiple times since November due to surveillance failures and fresh outbreaks in Veracruz and Oaxaca.

Bottom Line: As livestock producers brace for another biosecurity challenge, one rancher, Shelbie Pippenger, summed up the risk for the NYT: “For small herds, it could wipe us out.”

Weekly USDA dairy report

CME GROUP CASH MARKETS (8/1) BUTTER: Grade AA closed at $2.4450. The weekly average for Grade AA is $2.4785 (+0.0220). CHEESE: Barrels closed at $1.7100 and 40# blocks at $1.7050. The weekly average for barrels is $1.6660 (+0.0130) and blocks $1.6790 (+0.0365). NONFAT DRY MILK: Grade A closed at $1.2875. The weekly average for Grade A is $1.2890 (-0.0025). DRY WHEY: Extra grade dry whey closed at $0.5500. The weekly average for dry whey is $0.5390 (-0.0035).

BUTTER HIGHLIGHTS: Domestic butter demand varies from steady to light for the retail sector. East region contacts report export demand to be slow, while Central and West region contacts report export demand to be steady or strong. Spot cream loads are generally tighter and prices rose in response. Butter churns are steady for the most part, but production schedules are not running churns at full capacity. A few butter manufacturers note downtime for churn maintenance or replacement. Producers are selling cream to Class II and Class III manufacturers instead of utilizing it in churns in some cases. Bulk butter overages range from 5 cents below to 5 cents above market across the regions.

CHEESE HIGHLIGHTS: CME prices for both blocks and barrels rose this week to surpass last week's highs. Milk production is seasonally low, but output remains sufficient to meet production needs. Cheese production is steady to strong nationwide. In most areas, contract loads are sufficient to meet production demands. In some areas, spot purchases of milk and condensed skim are being purchased to meet production demands. Spot loads of milk for Class III use are going from $3-under to $2-over Class price. Sales activity is steady this week. Some regions report steady demand from retail and food service, while some contacts say retail demand is light. Export activity of cheese is steady nationwide. Cheese inventories are getting tighter nationwide. The weekly cold storage report states a 3 percent decline in cheese inventory from the beginning of July.

FLUID MILK HIGHLIGHTS: Nationwide, higher summer temperatures are having a negative impact on cow comfort and milk output. Milk components are seasonally low, but sufficient to meet market demands in most regions. Class I bottling is increasing in some areas this week as manufacturers prepare for the upcoming school year. Class II manufacturing remains strong. Producers continue to purchase spot loads of cream and condensed products to supplement ingredients. Class III production remains steady to strong. Class III milk volumes are tight in the Central region and spot trading is light. Some cheesemakers say downtime at nearby plants is enabling them to secure spot loads of Class III milk. Spot prices for Class III milk range from $3-under to $2 over this week. Class IV production is light in some regions and steady to strong in other regions. Cream multiples did not change much this week. The top end of the range dropped slightly in the East and Central regions and rose slightly in the West. Condensed skim production remains heavy. With some facilities experiencing down time, milk is moving to balancing facilities. Sales activity remains strong for condensed skim in the East and light in the West. Condensed skim in the West is going for $0.20 under Class price and up to $0.30 over Class price in the East. Cream multiples for all Classes range 1.24-1.38 in the East, 1.20-1.30 in the Midwest, and 1.12-1.28 in the West.

DRY PRODUCTS HIGHLIGHTS: Prices increased at the top of the Central and East low/medium heat nonfat dry milk (NDM) price range and at the top of the West region’s price range and mostly price series. Spot loads are available for purchasing in the Northeast and Midwest, but inventories are tight in the West and in the Southwest. High heat NDM prices were unchanged in the Central and East regions. In the West, the high heat NDM range contracted as the bottom end of the range moved higher and the top shifted lower. Dry buttermilk prices increased at the top of the Central and East region price range and at the bottom of the mostly price series in the West. Whole milk powder prices pushed lower across the range this week. Prices for dry whey increased at the top of the range in the Northeast and at the bottom in the West. Central region dry whey prices decreased at the bottom of the range but increased at the top of the range for animal feed whey. The top of the whey protein concentrate 34% (WPC 34%) price range increased, while the bottom of the range shifted lower. Contacts report increased spot sales of WPC 34%, priced around or below NDM, contributing to a notable decline at the bottom of the mostly price series. The bottom end of the lactose price range moved lower and the top of the mostly price series moved higher. Prices for acid and rennet casein are unchanged.

INTERNATIONAL DAIRY MARKET NEWS

WEST EUROPE: The European Union (EU) published a report discussing the short-term outlook for agricultural markets for 2025. The report notes milk production is expected to increase slightly in the region this year, despite an annual decline in the dairy herd. Production of cheese and whey are trending higher compared to 2024 and the report suggests production of these commodities will continue to increase in the latter half of the year.

EAST EUROPE: Milk production data for Ukraine in June 2025 was recently released. This data showed raw milk production declined from the previous month by 4 percent and was down 7 percent compared to a year earlier. The volume of milk produced from January through June 2025 is down 5 percent year over year.

OCEANIA: AUSTRALIA: Drought and rising input costs remain a concern to Australia's dairy industry. The cost of several key inputs, such as electricity, fuel, and fertilizer rose at rates on par with or above inflation. Reports indicate winter crop planting may reach record levels, which could ease input prices in some regions.

NEW ZEALAND: Milk production data from June 2025 were recently released, marking the first data release of the 2025/2026 production season. These data show total June 2025 milk production was 261,000 metric tons, up 14.6 percent over the prior season. Milk solids production totaled 24.0 million kilograms (kg) in June 2025, an increase of 17.8 percent year over year. Export data for June 2025 were recently released for New Zealand. These data showed the value of milk powder, butter, and cheese exports in June 2025 totaled $1.8 billion, an increase of 22 percent compared to June 2024. 

SOUTH AMERICA: South American milk production is strengthening. Milder winter temperatures are positively contributing to cow comfort. More affordable feed prices are providing stronger milk production margins. Industry sources note May 2025 year over year and May 2025 year to date milk output volumes are up for South American countries.

NATIONAL RETAIL REPORT: In the week 31 retail ad survey, the number of conventional dairy ads increased 8 percent, but organic dairy ads declined 10 percent. Ads for cheese, the most advertised conventional commodity, increased 5 percent. Organic ice cream ads are up 25 percent, overtaking yogurt as the most advertised organic commodity. Total ads for conventional gallon milk are up 19 percent, but the average price declined 48 cents to $3.23. Organic gallon milk's average price grew 1 cent to $8.75, creating an organic premium of $5.52.