Weekly protein digest: Biosecurity, trade shifts keep producers on alert
From screwworm threats near the southern border to shifting global poultry trade, producers are heading into 2026 with elevated risk and tighter margins
23 January 2026
15 minute read
By: USDA announces New World Screwworm “Grand Challenge”
Secretary of Agriculture Brooke Rollins Wednesday announced the launch of the New World Screwworm (NWS) Grand Challenge. “This funding opportunity marks a pivotal step in USDA’s comprehensive strategy to combat NWS and prevent its northward spread,” said a USDA press release. “This is a strategic investment in America’s farmers and ranchers and is an important action to ensure the safety and future success of our food supply, which is essential to our national security,” said Secretary Brooke Rollins. “These are the kinds of innovations that will help us stay ahead of this pest and protect our food supply and our economy, protecting the way of life of our ranchers and go towards rebuilding our cattle herd to lower consumer prices on grocery store shelves…” As part of the Grand Challenge, USDA’s Animal and Plant Health Inspection Service (APHIS) will make up to $100 million available to support innovative projects that enhance sterile NWS fly production, strengthen preparedness and response strategies, and safeguard US agriculture, animal health and trade, said the press release.
Smithfield Foods says it will acquire Nathan’s Famous
The deal is reportedly valued at about $450 million, securing the rights to a key product in its business’s largest segment, reported Bloomberg. The acquisition will secure Smithfield’s rights to this iconic brand into perpetuity", as the company already held an exclusive license to make and sell Nathan’s Famous products that expires in 2032. The deal is expected to close in the first half of 2026 and provide annual cost synergies of about $9 million within two years of closing, said the report. Smithfield’s packaged meats segment is its biggest in terms of revenue, followed closely by its fresh pork business. Nathan’s Famous, the roughly 110-year-old company best known for hosting the famed Coney Island hot dog eating contest on the Fourth of July, began selling its products in supermarkets in 1983.
Cattle futures markets appear to be moving beyond NWS uncertainty, for now
February live cattle on Wednesday rose 72 1/2 cents to $233.10. March feeder cattle rose $1.70 to $359.375. The live and feeder cattle futures markets saw some chart-based buying Wednesday as the bulls have stabilized prices after last Friday’s NWS-inspired sell off. Improved risk appetite also supported some better buying interest in cattle futures. USDA Wednesday reported very light cash cattle trading so far this week at $233.00. The agency on Tuesday said last week’s cash cattle traded averaged $232.50, which was up 64 cents from the prior week average. Cattle producers in the Plains states are concerned about extreme cold and high winds in the northern Plains, and a major winter storm in the southern Plains producing livestock stress. Cattle traders are awaiting the monthly USDA cattle-on-feed report that is out Friday afternoon.
China lifts poultry ban on Brazil’s Rio Grande do Sul
Move ends 18-month suspension tied to Newcastle disease, though some plant approvals are still pending
China lifted its ban on chicken imports from Brazil’s southern state of Rio Grande do Sul, ending an embargo imposed in July 2024 after a Newcastle disease case at a commercial farm. China’s General Administration of Customs of China said the decision followed a risk assessment clearing the state.
Brazilian officials say the move removes all remaining China-related restrictions on Brazilian poultry, though export approvals for individual plants are still being reactivated. As of midday Jan. 20, eight facilities — including plants operated by BRF and JBS — remained listed as restricted.
Brazil exported 247,970 tonnes of chicken to China last year, down nearly 56%, but industry groups say the reopening is a key step toward normalizing trade with one of Brazil’s most important poultry markets.
Tyson Beef plant closures trigger major layoffs and cut US slaughter capacity
Shutdown of Nebraska facility and shift reduction in Texas set to idle thousands of workers and remove significant cattle processing capacity from the system
On Jan. 21, roughly 5,000 workers are expected to be laid off as Tyson Foods moves forward with previously announced changes to its beef operations, including the closure of its Lexington, Nebraska, plant and the conversion of its Amarillo, Texas, facility to a single full-capacity shift.
According to a Worker Adjustment Retraining Notification (WARN) filed with the Texas Workforce Commission, 1,761 employees will be laid off from Amarillo’s B-shift operations. A separate WARN notice was issued by the Nebraska Department of Labor following the Lexington closure announcement.
Tyson said the moves are part of a broader effort to rebalance production across its network. “To meet customer demand, production will be increased at other company beef facilities, optimizing volumes across our network,” the company said in November, while acknowledging the impact on workers and local communities.
Impacts: In a January 2026 market outlook for MEAT+POULTRY, contributing editor Steve Kay estimated the actions will remove about 7,700 head of maximum daily slaughter capacity. The Lexington plant alone has a capacity of roughly 4,800 to 5,000 head per day, while Amarillo’s total capacity is about 5,800 head per day before the shift reduction.
An economic analysis from the University of Nebraska–Lincoln underscored the scale of the disruption. UNL estimated the Lexington closure will carry an annual statewide economic impact of $3.28 billion. The plant employs about 3,200 workers and accounts for roughly 4.8% of total daily US beef slaughter, highlighting the broader implications for cattle markets and regional economies.
Meanwhile, Senate Majority Leader Chuck Schumer (D-N.Y.) urged USDA Secretary Brooke Rollins to intervene and stop Tyson Foods from closing a meat-processing plant in Lexington, arguing the move would have outsized economic and consumer impacts.
In a letter sent Friday (link), Schumer said the closure would eliminate more than a quarter of local jobs and exacerbate already rising beef prices. “Beef prices are already on the rise; this closure ensures prices will remain sky-high,” he said, calling it “an abdication of the administration’s responsibility” not to prevent what he labeled an illegal shutdown.
Schumer characterized the decision as a “textbook violation” of price-manipulation law, contending that closing the facility—rather than selling it to a competitor—would further consolidate the beef-packing industry and allow tighter control over prices.
Tyson Foods declined to comment on the letter. A spokesperson for USDA said President Donald Trump and his cabinet are working to lower prices for consumers.
Screwworm spreads into Mexico’s wildlife, raising alarm along US border
Surge in New World screwworm cases in cattle and a first fatal infection in a wild howler monkey intensify biosecurity concerns for Texas producers
New World screwworm (NWS) infestations are expanding across Mexico and increasingly affecting both livestock and wildlife, prompting heightened warnings for US producers — especially in Texas — about the risk of northward spread.
Mexican authorities confirmed the first recorded death of a wild animal from NWS myiasis after an endangered howler monkey died in Palenque, Chiapas, from a larval infestation. Until now, only a handful of cases in wild birds and captive exotic animals had been documented in southern states, all of which recovered after treatment. The wildlife fatality signals a troubling escalation in the outbreak.
Meanwhile, NWS cases are clustering closer to the US border. Mexico’s National Service for Agrifood Health, Safety and Quality (Senasica) reported 11 active cattle cases in Tamaulipas since Dec. 31, 2025, including an initial infection in a six-day-old calf with an umbilical wound. Crucially, Mexican officials say there is no evidence the affected animals moved from other regions, raising concerns that the flies themselves may now be spreading naturally rather than hitchhiking via livestock transport.
The development has sharpened concern in Texas. Texas Department of Agriculture (TDA) and Agriculture Commissioner Sid Miller urged producers — particularly along the border — to inspect animals daily, treat any wound as a potential entry point, and report suspicious cases immediately. Officials emphasized close monitoring of navels in newborn animals and rapid isolation of suspect cases as key defenses.
NWS larvae, from a parasitic blowfly species, invade open wounds and consume living tissue in warm-blooded animals. After advancing steadily north from Central America over the past 16 months, the pest has already disrupted trade: the US suspended Mexican cattle imports three times last year, most recently after cases appeared near the border in September.
As of Jan. 7, Senasica counted 692 active NWS cases across 13 Mexican states. Chiapas (137 cases) leads, followed by Oaxaca (134), Veracruz (117), Guerrero (65) and Quintana Roo (46). Cattle account for 343 cases, but infections are also widespread among dogs (184) and present in pigs, horses, sheep, goats, cats, and even a farm bird — underscoring the broadening host range and rising risk to animal health on both sides of the border.
China keeps pork tariffs intact despite Canada/China trade reset
Recent agreement slashes duties on canola and eases EV tensions, but Beijing leaves 25% levy on Canadian pork untouched amid lingering trade retaliation
China’s recent agreement with Canada to reset strained trade relations did not include any reduction in tariffs on Canadian pork, leaving a key livestock sector excluded from the initial round of concessions even as other agricultural exports gained relief.
Under the deal, Beijing agreed to roll back punitive duties on Canadian canola seed, cutting tariffs that had reached roughly 84% to about 15%, while Ottawa moved to ease its hard line on Chinese electric vehicles. Those steps marked a significant thaw after months of escalating trade tension between China and Canada — but pork was notably absent.
Why pork was left out. China’s 25% tariff on Canadian pork, imposed in 2025, remains in force. The duty was introduced as part of a broader retaliatory package after Canada levied tariffs on Chinese EVs, steel, and aluminum. Because the pork tariff is explicitly retaliatory, it has proven harder to unwind than product-specific disputes like canola, where China framed the issue around anti-dumping and quality concerns.
Major China hog producer may list shares in Hong Kong stock market
Muyuan Foods Co., one of the world’s biggest pig breeders and pork producers, has started gauging investor interest for a Hong Kong listing that may raise as much as $1.5 billion, according to people familiar with the matter and as reported by Bloomberg. The Chinese company, whose shares are already traded in Shenzhen, may list its shares in Hong Kong as early as February, the people said, asking not to be identified because they weren’t authorized to speak publicly. Deliberations are ongoing, and the size and timing of the deal may change, the people added. Muyuan didn’t immediately respond to a request for comment from Bloomberg.
Brazil floods US beef market as duty-free quota is exhausted in first week
Shipments surge despite higher tariffs, with exporters eyeing record volumes in 2026 as displaced China supply shifts toward the US
Brazil’s beef exports to the United States have begun 2026 at an unprecedented pace, exhausting the entire 52,000-tonne duty-free quota in just the first six days of January, according to the Brazilian Association of Meat Exporting Industries (Abiec). Any additional shipments now face a steep 26.4% tariff.
Of note: Most, if not all of the beef was already in the US at bonded warehouses waiting to be withdrawn after Jan. 1 when the quota reset took place.
Abiec president Roberto Perosa said Brazil is on track to ship more than 400,000 tonnes of beef to the US this year, a sharp increase from the 271,000 tonnes exported in 2025 after tariff hikes imposed by the Trump administration dampened volumes. January alone is expected to exceed the quota by roughly 35,000 tonnes, with average monthly shipments projected near 40,000 tonnes.
The rapid quota depletion reflects both strong US demand and tighter access elsewhere. Brazil’s US quota was reduced in 2026 from 65,000 tonnes to 52,000 tonnes after 13,000 tonnes were reallocated to the United Kingdom. Still, exporters filled the smaller allotment faster than ever — compared with mid-January last year and March in 2024 — confirming a sharp acceleration in trade.
Perosa warned that while the US market can absorb additional volume, similar front-loading in China would be far more disruptive, prompting calls for closer government oversight of shipments. Industry estimates suggest that as much as 500,000 tonnes originally destined for China in 2026 could be redirected, with a significant share flowing to the US despite tariffs.
Data from the US Customs and Border Protection confirms Brazil’s early dominance. By contrast, other major suppliers are barely tapping their quotas: Australia has used less than 3% of its 378,200-tonne duty-free allocation under its free-trade agreement; Argentina, New Zealand and Uruguay have each used only about 1–3% of their quotas so far.
Perspective: While the bulk of Brazil’s expected additional 350,000 tonnes this year will be taxed — making it less competitive than Australian beef — the early surge underscores Brazil’s growing role in the US beef supply and intensifies pressure on domestic producers and rival exporters as 2026 unfolds.
Weekly USDA dairy report
CME GROUP CASH MARKETS (1/16) BUTTER: Grade AA closed at $1.3550. The weekly average for Grade AA is $1.3155 (-0.0095). CHEESE: Barrels closed at $1.3575 and 40# blocks at $1.2900. The weekly average for barrels is $1.3590 (-0.0410) and blocks $1.2865 (-0.0555). NONFAT DRY MILK: Grade A closed at $1.2550. The weekly average for Grade A is $1.2490 (+0.0275). DRY WHEY: Extra grade dry whey closed at $0.7350. The weekly average for dry whey is $0.7170 (+0.0090).
BUTTER HIGHLIGHTS: Domestic retail butter demand is strong and is outpacing domestic food service demand throughout the country. Export demand is mixed. Cream loads are readily available, and some butter makers are adding spot loads to their contractual intakes. Most facilities are operating their butter churns at or near capacity. Although some butter manufacturers convey they are not overly comfortable with their inventories, 80 percent butterfat butter loads are widely available. Interest for 82 percent butterfat butter from international buyers is keeping domestic bulk butter spot loads tight. Bulk butter overages range from 2 cents below to 5 cents above market across all regions.
CHEESE HIGHLIGHTS: In the East region, cheese production is steady to stronger as manufacturers increase output to support whey and whey-derivative demand. Retail movement is active, while bulk demand stays lighter. Inventories remain balanced, with some producers exploring export channels. Across the Central region, milk production is steady, though Class III demand is not keeping pace with recent expectations. Spot milk remains available, but cheesemakers report mixed interest week to week. Domestic demand is firm, export interest is strong, and barrel inventories are somewhat snug, while blocks are more available. In the West, strong milk production continues to cover contractual needs, with spot milk interest varying by plant. Cheesemakers report steady to stronger production schedules, supported by competitive pricing. Domestic retail and food service demand remain solid, while export demand is strengthening, particularly against higher priced international supplies.
FLUID MILK HIGHLIGHTS: Milk output is mixed nationwide, with some regions reporting small increases in milk production, while others are reporting steady volumes. Milk components remain strong, providing ample amounts of cream for manufacturers. Class I production varies by region, with some regions reporting strong demand for bottled milk, while others have steady to lighter demand. Class II production is increasing, with some facilities purchasing spot loads of cream and milk to respond to increased demand. Class III demand for milk is steady to strong. Some cheese producers are taking advantage of high whey prices and increasing production, while others are using contract loads to sustain production. Spot prices for Class III milk range from $4 under to $0.25 over Class price. Class IV production is steady. Some butter facilities are purchasing spot loads of cream to bolster production. Production of condensed skim slowed this week to match sales. Prices of condensed skim are unchanged this week. Cream multiples for all Classes range: 1.00 – 1.24 in the East; 0.80 – 1.22 in the Midwest; 0.70 – 1.16 in the West.
DRY PRODUCTS HIGHLIGHTS: Nonfat dry milk prices continued their upward trajectory this week, reflecting firm market undertones. The Central and East regions posted gains of 1 to 3 cents, while the West region saw stronger increases, up to 7.5 cents. Dry buttermilk prices held steady at the lower end of the series in all regions, but advanced 1 to 4 cents on the upper end, signaling moderate demand strength. Dry whey markets were mixed across regions. In the Central region, prices slipped at the low end but firmed at the high end, while mostly prices remained unchanged. The West region experienced slight declines on the low side with stability at the high end, and the mostly series softened. Northeast dry whey was largely stable, except for a modest uptick on the low end. Lactose prices strengthened at the lower end and held firm at the upper end, with both ends of the mostly range trending higher. Whey protein concentrate 34% prices edged up on the lower end, while the upper end held steady. Dry whole milk prices moved slightly higher amid continued soft demand, and acid and rennet casein prices remained unchanged.
INTERNATIONAL DAIRY MARKET NEWS
WEST EUROPE: A new European dairy futures contract is scheduled to begin trading in mid-2026, designed to provide dairy market participants with a standardized financial instrument to manage price risk across key dairy commodities, pending regulatory approval and final market preparations.
EAST EUROPE: Persistent global oversupply of milk through 2025-26 is pressuring dairy commodity values, with Eastern EU supply, in particular rising milk flows in Poland, adding to abundant inventories and limiting upward price momentum across major milkfat and protein markets.
OCEANIA: AUSTRALIA: Torrential rains have created floods throughout northwest portions of Queensland, killing and displacing livestock. According to Queensland's Department of Primary Industries, nearly 30,000 head of livestock were dead or missing as of January 7, with this number expected to rise in the coming weeks as more livestock succumb to illness.
NEW ZEALAND: New Zealand dairy farms reduced nitrogen fertilizer use by 20 percent since the introduction of a mandatory reporting program three years ago, according to an industry group. The regulations were introduced to counter the impact of runoff on freshwater systems and limit the application of synthetic nitrogen fertilizer on grazed pasture to 190 kilograms per hectare per year. In addition to the regulatory cap, higher fertilizer prices and shifting production practices have also contributed to the decline in fertilizer use.
SOUTH AMERICA: In Argentina, year over-year (YOY) milk production in November continued to post strong growth, consistent with increases reported in Brazil (September) and Uruguay (November). Farm-gate milk price growth remained modestly lower in local currency terms and significantly lower when measured against the Euro. Uruguay was the exception, recording modest gains in both local and Euro-denominated prices. Chile also showed slight improvement in local-currency terms but lower receipts in Euro terms, according to CLAL.
