1 August 2025

15 minute read

By: Jim Wyckoff

South America

North America

Oceania

Weekly USDA export sales for US beef, pork

Beef: Net sales of 8,500 MT for 2025 were down 49 percent from the previous week and 30 percent from the prior 4-week average. Increases primarily for Japan (1,700 MT, including decreases of 500 MT), Canada (1,700 MT), South Korea (1,200 MT, including decreases of 500 MT), Taiwan (1,000 MT), and Mexico (1,000 MT, including decreases of 100 MT), were offset by reductions for the United Kingdom (100 MT). Exports of 12,300 MT were down 2 percent from the previous week and 5 percent from the prior 4-week average. The destinations were primarily to Japan (3,500 MT), South Korea (3,400 MT), Mexico (1,300 MT), Taiwan (1,000 MT), and Canada (1,000 MT).

Pork: Net sales of 39,500 MT for 2025 were up noticeably from the previous week and up 85 percent from the prior 4-week average. Increases were primarily for Mexico (23,100 MT, including decreases of 600 MT), Japan (8,100 MT, including decreases of 100 MT), South Korea (3,300 MT, including decreases of 100 MT), Colombia (900 MT, including decreases of 100 MT), and Honduras (900 MT). Total net sales of 100 MT for 2026 were for Japan. Exports of 26,800 MT were down 3 percent from the previous week and 6 percent from the prior 4-week average. The destinations were primarily to Mexico (11,600 MT), Japan (3,200 MT), South Korea (2,800 MT), China (2,700 MT), and Colombia (1,600 MT).

USDA’s July 25 Cattle on Feed and Cattle Inventory reports offer new insights

The insights include the evolving state of the U.S. cattle herd. Authors from Southern Ag Today agree the data show contraction continuing, but several noted hints of stabilization — and perhaps the early stages of a slow rebuild (link).

“The cattle herd is approaching a low in inventory but may not be there just yet,” wrote Will Secor of the University of Georgia. He pointed to a projected 1.3% smaller 2025 calf crop and reduced beef cow replacement heifers as signs that the herd could decline further by January 2026. Still, the share of heifers on feed is at its lowest July level since 2019, hinting at possible future retention.

Kenny Burdine of the University of Kentucky noted that beef cow inventory was down just 1.2% from July 2023, despite expectations of a steeper drop. He credited this to a sharp slowdown in beef cow slaughter — nearly 650,000 fewer head harvested year-over-year through June 2025. However, heifer retention “as a percentage of beef cow inventory” is still lower than in 2023, and he cautioned that the surprising 8% drop in June placements “does not suggest much retention is occurring.”

Looking at Kentucky specifically, Burdine added: “Producers tell me they are not keeping heifers at these price levels. Interest rates are impacting this decision.”

Andrew Griffith of the University of Tennessee summarized the reports bluntly: “Lower beef cow numbers, a smaller calf crop, and fewer cattle on feed.” He anticipates intense competition for cattle going forward and warns of “closures, idling, or consolidation of packing plants and feedlots.” For now, he says, “capacity utilization is going to be small.”

Josh Maples of Mississippi State sees 2025 as a “stabilization year,” not a clear expansion. “The 5% drop in heifers placed into feedlots jumps out,” he wrote, but concluded it’s still too soon to call it a pivot point. “I’m not yet ready to call it an obvious sign of expansion.”

Hannah Baker of the University of Florida echoed that retention remains tentative. While some Florida producers are beginning to hold back heifers, “the majority are still capitalizing on record-high calf prices.” She added: “There is a smaller pool of heifers to pull from for any impulse breeding in the back half of 2025.”

James Mitchell of the University of Arkansas used the beef replacement heifers-to-calf crop ratio to evaluate herd dynamics. For July 2025, the ratio was 11.04%, nearly identical to July 2023. For context, it was 14.32% in July 2015, during a clear rebuild. “We’re not there yet,” Mitchell concluded, asking whether producers are choosing to reinvest profits in infrastructure or land instead of herd expansion.

Lastly, Charley Martinez of the University of Tennessee highlighted the projected 2025 calf crop of 33.1 million head, down from 33.52 million in 2024 and 33.56 million in 2023. He called this a clear signal of tight feeder calf supplies ahead — and elevated prices. “This report starts the excitement for the Jan. 1 report,” Martinez added, when more detailed data could confirm if a true rebuild is finally underway.

Bottom Line: Most Southern economists see the herd contraction continuing — albeit at a slower pace — but any expansion will likely be modest, regional, and dependent on factors like price signals, drought, and capital costs.

Pilgrim’s to build $400 million chicken plant in Georgia

The New facility will expand just bare and prepared foods as chicken demand soars. Pilgrim’s is investing $400 million in a new fully cooked chicken plant in LaFayette, Georgia, as U.S. protein demand continues to drive profits. The facility will support 630 jobs and expand production of key brands like Just Bare and Gold Kist. Backed by majority owner JBS, Pilgrim’s aims to meet surging retail and foodservice demand, with construction starting this fall and phase one completion expected by 2027. The move follows record 14.8% Q1 margins and rising chicken consumption, which is forecast to nearly match red meat intake in 2026.

Australia grain and feed update from USDA

After a challenging start to the winter crop season in the southern production regions—due to low soil moisture and below-average rainfall—widespread rain in the first two weeks of July has improved conditions. Combined with a favorable rainfall outlook for the months ahead, above-average wheat and barley production is forecast. FAS/Canberra projects a rise in wheat exports in MY 2025/26, following weaker than expected shipments during the first eight months of MY 2024/25. Higher ending stocks for MY 2024/25 will boost wheat available for export for the forecast year. In contrast, barley exports are forecast to decline in MY 2025/26 due to strong export volumes so far in MY 2024/25, tightening supply for the forecast year. Sorghum production and exports are forecast to increase in MY 2025/26, supported by positive conditions ahead of planting. Conversely, rice production and exports are expected to fall sharply due to depleted irrigation water storage, which is likely to significantly reduce the planted area.

Canada grain and feed update from USDA

Marketing year (MY) 2025/26 wheat production is under pressure from sub-par spring and winter wheat conditions in key Prairie provinces—drought is a central challenge. Exports, especially durum, are strong. The five million metric ton (MT) year-to-date (YTD, as of May 2025) durum exports reflect robust demand, while non-durum shipments are relatively stable. Feed wheat markets are being squeezed by competition from alternative grains. Carry-out stocks are tightening in MY 2024/25. Poor crop recovery or moisture stress could pose further supply risks. The tariff situation is fluid, with ongoing negotiations and potential changes to trade policies, creating uncertainty in the wheat market.

US cattle inventory reaches 94.2 million head

First July USDA report in two years highlights beef and dairy figures

The US cattle and calf inventory stood at 94.2 million head as of July 1, 2025, according to USDA's National Agricultural Statistics Service (NASS). This marks the first July cattle inventory report since 2023, showing 28.7 million beef cows, 9.45 million dairy cows, and a calf crop estimated at 33.1 million head. The survey gathered responses from over 17,900 operators nationwide. Of the 94.2 million head inventory, all cows and heifers that have calved totaled 38.1 million. All cattle on feed were at 13.0 million head.

Brazilian chicken exports resilient amid bird flu cases

Shipments to Arab countries stable despite outbreak concerns.  Despite an avian flu outbreak in Rio Grande do Sul earlier this year, Brazilian chicken exports to Arab nations remained nearly unchanged in the first half of 2025, totaling $1.75 billion — a slight decrease of just 0.53% year-over-year. Export stability was attributed to long-term contracts and strong importer confidence in Brazil's strict sanitary standards.

Another recent outbreak in Ceará raised minimal concerns, as major export-oriented poultry farms are located far from the affected site. Restrictions have been limited, primarily by Saudi Arabia, Oman, and targeted measures by Qatar.

Although overall Brazilian exports to Arab countries fell by nearly 17%, signs of economic recovery in the region leave industry officials optimistic for sustained strong demand and solid trade performance in the remainder of 2025.

USDA releases first forecasts for 2026 food price inflation

The agency is projecting more modest increases than those expected in 2025 — and all below the 20-year average. USDA’s initial 2026 outlook calls for:

• All food prices to rise 2.7%
• Restaurant prices (food away from home) to increase 3.1%
• Grocery prices (food at home) to climb 1.6%

Of note: These figures compare favorably with the 20-year historical averages of 2.9%, 3.5%, and 2.6%, respectively.

2025 Outlook Mostly Steady, But Beef and Eggs See Notable Revisions

For 2025, USDA left most projections unchanged from June. All food prices are still forecast to rise 2.9%, and grocery prices 2.2%. However, the agency raised its restaurant price forecast to 4.0%, up from 3.7% previously.

Beef prices are now expected to jump 8.8% in 2025, up from a 6.8% forecast last month, as tight cattle supplies continue to drive prices well above the 20-year average increase of 4.0%. The agency expects a moderated 2.9% rise in 2026.

Egg prices — one of the most volatile food categories — are now projected to increase 24.6% in 2025, down from last month’s 33.2% outlook. From May 2025 to June 2025, retail egg prices decreased for the third month in a row, USDA noted, with egg prices falling 10.8% between May and June after having fallen by 7.5% from April to May and by 10.5% from March to April. However, USDA noted, “Egg prices in June 2025 were still 27.3% higher than in June 2024.” In 2026, egg prices are forecast to fall 18.4%, though USDA notes high uncertainty, with a wide forecast range from a 45.0% drop to a 22.8% gain.

Other Foods and Broader Trends

Prices for the “other foods” category, which carries a 12.8% weight in the CPI food index, are expected to rise 2.9% in 2026, accelerating from the 1.6% rise forecast for 2025. The 20-year average for this category is a 2.4% increase.

Looking Ahead

While 2026 forecasts show promise for easing food inflation, USDA cautions that conditions remain fluid. Food prices — particularly for items like eggs and beef — remain sensitive to supply shocks and market volatility. USDA’s forecasts have already shifted significantly over the past year, and further revisions are likely as new data emerge.

USDA global dairy report

US Leads Global Milk Production Growth

U.S. milk production is forecast 1.1 percent higher in 2025 as dairy farmers increase herds in advance of expanding processing capacity. U.S. exports were strong during the first 5 months of calendar year 2025 and supported overall demand for U.S. dairy. Competitive prices for U.S. butter and cheese lifted shipments despite weaker demand for skim products, including whey, lactose, and skim milk powder.

New Zealand is also expected to boost milk output this year on growth in yields, along with a stable cow herd. New Zealand exports were also strong during the first half of the year, especially for cheese and butter. Production of butter, cheese, and skim milk powder are forecast higher in 2025, while whole milk powder is unchanged from the previous year.

Argentina milk production is also forecast higher in 2025, a rebound from last year when an economic crisis led to a sharp decline in milk production.

European Union milk production is forecast to continue declining as environmental regulations and poor profitability, among other factors, pressure the dairy herd lower. With lower milk supplies, strong domestic and international demand will support a focus on cheese production at the expense of lower butter and milk powder production.

Australia milk production is forecast less than 1 percent lower in 2025 given persistent drought that has increased hay costs and limited suitable pasture in major production regions. Together, global milk production by these five major exporters is forecast less than half a percent higher in 2025.

Asia markets, but growth is expected to temper during the remainder of the year due to more limited milk supplies for cheese production.

European Union cheese production is expected to be virtually unchanged in 2025 from last year at 10.7 million tons. Steady demand from domestic and international buyers continues to support cheese production despite lower EU milk supplies. EU cheese exports are forecast to expand marginally in 2025 after stable exports in 2024. During the first 5 months of 2025, EU cheese exports saw robust growth to the United Kingdom, Japan, and South Korea and more measured growth to the United States. The United Kingdom has historically been the largest EU cheese export market, and EU exports of fresh cheese and cheddar to the United Kingdom were particularly strong to start 2025. EU domestic consumption of cheese is expected to marginally increase in 2025 where Germany, France, Italy, Poland, and Spain are the leading cheese-consuming member states. EU cheese consumption has increased each year since 2022, following a slight decrease in 2022 because of reduced consumer purchasing power. Consumption growth for 2025 is constrained by relatively low domestic production growth.

Weekly USDA dairy report

BUTTER: Grade AA closed at $2.4650. The weekly average for Grade AA is $2.4565 (-0.0820). CHEESE: Barrels closed at $1.6250 and 40# blocks at $1.6400. The weekly average for barrels is $1.6530 (-0.0030) and blocks $1.6425 (+0.0070). NONFAT DRY MILK: Grade A closed at $1.2875. The weekly average for Grade A is $1.2915 (+0.0110). DRY WHEY: Extra grade dry whey closed at $0.5400. The weekly average for dry whey is $0.5425 (-0.0260).

BUTTER HIGHLIGHTS: Domestic butter demand from the retail sector varies from steady to lighter. Sellers report sales activity from the food service sector is lagging behind the retail sector. Demand from international buyers is strong for the most part. Although cream volumes are decreasing, loads are available for butter manufacturers to secure. Butter manufacturers convey contractual cream load obligations are being met. Butter production schedules vary from steady to lighter. Some downtime for churning equipment maintenance or replacement is reported. Bulk butter overages range from 5 cents below to 5 cents above market across all regions.

CHEESE HIGHLIGHTS: The CME prices for blocks and barrels have not changed this week despite dropping approximately five cents for each commodity last week. Contract loads for Class III production are sufficient to meet current demands in the East. Milk output is steady to lighter in the Central region. Contacts in the southern portion of the region say high temperatures continue to have a negative impact on milk production. Spot loads of Class III milk are becoming more difficult to find in most of the region, but some cheesemakers say downtime at nearby production facilities is keeping spot volumes available at below Class prices. Class III milk volumes are keeping up with contractual demands from cheese manufacturers out West. Spot milk availability is looser in parts of the region this week due to production downtime for dairy commodities other than cheese at some facilities. Domestic cheese demand varies from steady to light. Demand from international buyers for cheese varies from steady to strong.

FLUID MILK HIGHLIGHTS: This week the National Agricultural Statistics Service (NASS) released the June milk production report. NASS reported a 3.4 percent increase in production from June 2024. Summer milk production remains seasonally low, but as stated in the report, is higher than previous years. Class I bottling production remains slow, but as educational institutions prepare for the start of the fall semester, bottling production will increase, beginning in the Southeast. Class II manufacturing remains strong. Ice cream manufacturers continue to purchase spot loads of cream, condensed skim, and condensed buttermilk. Class III demand for milk remains strong. Spot loads of milk for Class III are trading from $3 under to $3 over Class price this week. Cheesemakers are also pulling on condensed skim supplies to help fortify their products. Class IV production is slower this week. Some butter manufacturers are reporting lighter churn schedules and others mention scheduled down time. Spot loads of cream are readily available. Condensed skim was described as heavy this week. Production and demand are both strong this week. Condensed skim is selling $0.25-$0.30 over Class prices this week. Cream multiples for all Classes range 1.24-1.41 in the East, 1.20-1.34 in the Midwest, and 1.12 1.27 in the West.

DRY PRODUCTS HIGHLIGHTS: Low/medium heat nonfat dry milk (NDM) prices were higher in most aspects across all regions this week, with only the top of the Central and East region price range holding steady. Contacts report increased demand from purchasers in Mexico. High heat NDM prices increased at the bottom of the Central and East region price range and the West region price range pushed higher. Dry buttermilk prices were steady in the Central and East regions, while the top of the price range moved lower in the West. The bottom of the Central region dry whey price range pushed higher, and prices increased across the range in the West, but contacts reported steady prices in the Northeast. There were no prices for lactose reported below 40 cents this week, pushing the bottom end of the range higher, but prices were unchanged at the top of the range. Contacts reported a greater number of spot whey protein concentrate 34% (WPC 34%) sales priced near low/medium heat NDM this week, contributing to a sharp drop at the bottom of the range. Prices also fell at the top of the range, as spot WPC 34% inventories for product which meets stringent end user applications are tight and spot trading was light. Acid casein prices increased this week, while rennet casein prices remained steady.

ORGANIC DAIRY MARKET NEWS: The National Organic Standards Board (NOSB) is seeking nominations to fill five vacant spots, with terms beginning in January 2026. Board members represent specific sectors of the organic community and serve a 5-year term. The UK-based Agriculture and Horticulture Development Board (AHDB) recently released a report reviewing dairy markets in the country for Q2 2025. The report stated Great Britain organic milk production continued to grow and milk deliveries were up 12.6 percent in Q2 2025 from a year ago. The report also noted organic milk availability is declining in Europe, which could provide further opportunities for producers in the UK. The May 2025 European organic milk average pay price increased in Austria, France, Germany, and Bavaria compared to April. The average pay price in May 2025 was up from a year ago in Austria, France, Germany, and Bavaria. In a recent report from a Pacific Northwest livestock auction, the top 10 organic cull cows traded lower than the top 10 conventional cull cows.