Weekly protein report: China livestock sector on alert as new foot-and-mouth strain emerges

25 April 2026

15 minute read

By: Jim Wyckoff

North America

Asia

Cattle futures prices fall to three-week lows

June live cattle on Wednesday fell $0.475 to $243.075. May feeder cattle lost $0.125 to $358.425. Both markets hit three-week lows. The cattle futures markets saw mild follow-through technical selling pressure from recent losses that have produced significant near-term chart damage to suggest market tops are in place. It was especially disappointing price action for cattle futures market bulls Wednesday because there was a keener risk appetite in the general marketplace at mid-week. USDA at midday Wednesday reported very light cash cattle trading taking place so far this week, with steers averaging $246.33 and heifers $246.00. Last week’s average cash cattle trade was $248.02. Cattle futures markets have seen price uptrends on the daily bar charts stall out. There are now chart clues to begin to suggest market tops are in place.

Weekly USDA US beef, pork export sales

Beef: US net sales of 15,100 MT for 2026 were up 26 percent from the previous week and 17 percent from the prior 4-week average. Increases were primarily for South Korea (5,100 MT, including decreases of 100 MT), Japan (4,100 MT, including decreases of 200 MT), Mexico (2,100 MT), Hong Kong (1,200 MT, including decreases of 100 MT) and Taiwan (1,000 MT, including decreases of 200 MT). Exports of 12,500 MT were down 7 percent from the previous week and 9 percent from the prior 4-week average. The destinations were primarily to South Korea (4,200 MT), Japan (3,100 MT), Mexico (1,700 MT), Taiwan (1,000 MT) and Hong Kong (800 MT). 

Pork: US net sales of 16,100 MT for 2026--a marketing-year low--were down 57 percent from the previous week and 60 percent from the prior 4-week average. Increases primarily for Mexico (8,900 MT, including decreases of 300 MT), South Korea (3,300 MT, including decreases of 400 MT), Colombia (3,300 MT, including decreases of 100 MT), Japan (1,600 MT, including decreases of 2,000 MT) and Canada (1,400 MT, including decreases of 300 MT), were offset by reductions for the Philippines (2,000 MT), Australia (1,900 MT) and New Zealand (600 MT). Exports of 38,200 MT were up 8 percent from the previous week and 2 percent from the prior 4-week average. The destinations were primarily to Mexico (17,300 MT), Japan (4,900 MT), South Korea (3,800 MT), China (3,600 MT) and Colombia (1,900 MT)

USDA annual cattle slaughter summary

The agency’s annual cattle slaughter summary report was released Wednesday afternoon, providing finalized data for meat production in 2025. In addition to the regular monthly reports, the annual provides insight on where meat production is concentrated as well as the number of plants operating as of January 1, 2026. Red meat production was down 2% from 2024 to 53.8 billion pounds. Beef production came in at 26.1 billion pounds, down 4% from 2024, while pork production was up 1% to 27.6 billion pounds. The numbers were little changed from the preliminary end of year estimates released in late January that showed 53.74 billion pounds of red meat production for 2025. The report said 49.4% of commercial US red meat production was focused in four states: Iowa (16.6%), Nebraska (14.4%) , Kansas (10.4%) and Texas (8.0%). The total number of federally inspected plants increased from 1,089 on January 1, 2025 to 1,127 on January 1, 2026. There was a slight decrease in non-federally inspected plants from 1,827 to 1,796. In total, the number of plants increased by 7 to 2,923 in the US Notably, Texas led states with the most new plants under federal inspections, up 9, to 78.

US hog market sees seasonal tightening and disease risks

Elevated disease pressure and steady export demand suggest supply constraints could extend well beyond typical summer lows

Pork futures are already trading at a notable premium to seasonal norms heading into late April, and according to Zachary Davis of the NTG Morning Comments, the rally is being driven by both typical seasonal tightening and an increasingly important disease backdrop. As Davis explains, “the supply-demand math tilts bullish in a hurry,” with futures reflecting expectations that available hog supplies will shrink more meaningfully in the months ahead.

The seasonal pattern in the hog market is well established. Weekly hog slaughter typically peaks in March before declining into July as the spring pig crop moves through the system. That reduction in slaughter capacity is a key driver behind the annual rally in hog prices. While slaughter levels through mid-April have remained broadly in line with prior years, the expected seasonal downturn is imminent. Early signs are already appearing in the pork cutout, which has rebounded toward $100 per hundredweight after slipping into the mid-$90s earlier this month. A similar setup last year preceded a roughly $28 rally into early July.

What distinguishes this year from a typical seasonal move is the growing impact of disease within the hog herd. Porcine epidemic diarrhea virus (PEDv) positivity on sow farms surged to its highest level since 2022 earlier this winter, while porcine reproductive and respiratory syndrome virus (PRRSV) rates have climbed sharply on a year-over-year basis. PEDv is particularly disruptive because it kills the vast majority of infected newborn piglets, directly reducing future supply. Meanwhile, elevated PRRSV adds additional production stress, compounding losses across the system.

These pressures help explain why the US breeding herd has remained flat despite otherwise supportive price signals. Rather than expanding, producers appear to be replacing losses tied to disease outbreaks. The geographic spread of these issues — from the East Coast through the Midwest — underscores that this is not an isolated regional problem but a broader structural constraint on supply.

The result is a supply outlook that could tighten more aggressively — and for longer — than the market typically sees, Davis notes. Instead of bottoming out during the summer months, hog supplies could remain constrained into the fall, potentially extending through October. That shift would mark a meaningful departure from historical seasonal patterns.

Demand dynamics are reinforcing the bullish case. Export demand has remained steady, if not exceptional, providing a consistent floor for prices and limiting downside pressure. With no major weakness on the demand side, the combination of seasonal slaughter declines and disease-driven supply losses is skewing the market balance higher.

The key question now is whether futures prices have fully accounted for these risks. While the market has already moved higher, Davis suggests the current premium may still underestimate the extent of tightening ahead. If disease impacts continue to play out as current trends suggest, the rally in hog prices may have further room to run into the second half of the year.

Justice Department launches criminal probe into beef industry practices

Wall Street Journal exclusive reports investigation into alleged price manipulation and anticompetitive conduct

According to an exclusive report by the Wall Street Journal, the US Department of Justice has opened a criminal antitrust investigation into whether major beef companies engaged in illegal anticompetitive conduct — marking a significant escalation in the Trump administration’s scrutiny of the meatpacking sector.

The probe, led by the Justice Department’s antitrust division, stems from calls by President Donald Trump last fall to investigate what he described as price manipulation by large, often foreign-owned meatpackers. Criminal antitrust cases are typically reserved for the most serious violations, including price fixing, market collusion and bid rigging, signaling the seriousness of the allegations under review.

The beef investigation also involves a separate probe by a team of civil DOJ attorneys. 

At the center of the investigation is how beef companies purchase cattle from ranchers, particularly through contracts tied to benchmark pricing systems that some producers argue are subject to manipulation. Ranchers have long complained that these pricing mechanisms disadvantage sellers while allowing packers to maintain elevated consumer beef prices.

Of note: While the Justice Department previously acknowledged examining the beef sector following Trump’s directive, officials had not disclosed that the inquiry had advanced to a criminal level. The criminal aspect of the probe raises the stakes considerably for the companies and their executives, who face the prospect of steep fines and prison time.

Meanwhile, Peter Navarro, the president’s senior counselor for trade, repeated allegations against the beef industry in a post Monday about DOJ’s lawsuit against Agri Stats, an agricultural data provider, which goes to trial May 4. “Agri Stats uses confidential data from the processors themselves on prices, costs, output and customers,” Navarro said in the post. “It then turns that data into reports, rankings and benchmarks and sends it back to the same industry giants as price fixing wrapped in market intelligence.”

Sarah Little, vice president for communications at industry group Meat Institute, declined to comment on the Justice Department probe, but said beef processors have been losing money for the last 20 months as they pay producers higher prices for cattle. “Beef packing companies have been losing money while paying producers record prices for their cattle because there are simply not enough cattle to meet strong consumer demand for beef,” Little said.

The probe comes as part of a broader Trump administration push to address rising food costs and concentration across agricultural supply chains. Despite multiple initiatives, including policy pressure and regulatory scrutiny, beef prices have remained elevated, frustrating both producers and consumers.

Of note: The DOJ opened a civil antitrust probe of the four meatpackers during Trump’s first term that was continued by the Biden administration, though it never filed a lawsuit.

China livestock sector on alert as new foot-and-mouth strain emerges

SAT1 detection across distant provinces raises containment concerns, triggers nationwide vaccine push

China’s livestock sector is moving into a heightened risk posture following the emergence of a new foot-and-mouth disease (FMD) serotype, SAT1, with early signals pointing to potential spread beyond initial outbreak zones. In early April, China’s Ministry of Agriculture and Rural Affairs confirmed the country’s first-ever cases of the SAT1 strain, detected on two farms in Xinjiang and Gansu — locations separated by more than 2,000 kilometers, immediately raising concerns about how widely the virus may already be circulating.

While authorities have not formally disclosed additional outbreaks, the policy response suggests mounting concern within the system. Emergency approvals have been granted to vaccine producers Zhongnong Weite Biotech and Jinyu Baoling, accelerating deployment of SAT1-specific doses.

Meanwhile, regional veterinary authorities are urging broad-based vaccination campaigns across cattle, sheep and swine populations — including in provinces far removed from the confirmed cases — signaling a precautionary nationwide containment strategy.

Market and industry behavior is reinforcing that view. The North China Livestock Trading Center in Hebei has already restricted live cattle shipments from affected and nearby regions, including Gansu and Inner Mongolia, according to reporting cited by Nikkei (link). At the farm level, producers report a sharp increase in biosecurity protocols, including tighter controls on farm access and animal movement.

Additional analysis from retired USDA economist Fred Gale underscores the uncertainty surrounding the outbreak and raises questions about the official narrative. Writing in his Dim Sums China agriculture blog (link), Gale described the simultaneous appearance of outbreaks thousands of kilometers apart as “implausible,” suggesting the virus may already be far more widespread than reported and that emergency vaccine deployment is a signal of broader transmission. He noted that current vaccines do not protect against the SAT1 serotype and that the disease likely entered China via contaminated people or equipment moving from Africa or the Middle East, where the strain has been circulating.

Gale also pointed to limited public disclosure and a lack of widespread official warnings to producers, drawing parallels to the early handling of the African swine fever outbreak in 2018. In that case, geographically dispersed early cases were followed by months of underreporting before the disease spread nationwide, ultimately cutting China’s hog herd roughly in half and sending pork prices to record highs.

There are, however, important differences. China has longstanding experience managing multiple FMD serotypes and appears to be acting more quickly with targeted vaccines and movement controls. The rapid authorization of SAT1 vaccines and early containment measures suggest authorities are attempting to avoid a repeat of the ASF scenario, even as outside analysts question how contained the outbreak truly is.

Even under a controlled-outbreak scenario, the economic implications are significant. Disease management — including potential culling — is likely to reduce China’s beef herd in the near term, with spillover risks to dairy and pork production. That comes at a time when many producers are already operating on thin margins, increasing the likelihood of supply tightening and price volatility across protein markets in 2026.

For global agriculture markets, the key question now is whether China’s early intervention can contain the outbreak — or whether SAT1 becomes another structural shock to the world’s largest livestock sector.

USDA breaks ground on new sterile fly production facility to combat New World Screwworm

USDA Secretary Rollins and Lieutenant General Butch Graham of the US Army Corps of Engineers on Friday led groundbreaking for the new sterile fly production facility at Moore Air Base in Edinburg, Texas. USDA is partnering with the Corps of Engineers to construct the facility, “which is a cornerstone of Secretary Rollins’ five-pronged strategy to combat New World Screwworm (NWS), expanding the nation’s domestic capacity to protect livestock, wildlife and public health from this serious pest,” said a USDA press release. “Breaking ground on this facility marks a major investment in safeguarding America’s livestock and the producers who feed this nation. This puts NWS sterile fly production in American hands, so we do not have to rely on other countries for the best offensive measure to push screwworm away from our borders,” said Rollins.

Weekly USDA dairy report

CME GROUP CASH MARKETS (4/17) BUTTER: Grade AA closed at $1.6900. The weekly average for Grade AA is $1.7505 (+0.0080). CHEESE: Barrels closed at $1.5750 and 40# blocks at $1.5775. The weekly average for barrels is $1.5750 (-0.0090) and blocks $1.5765 (-0.0315). NONFAT DRY MILK: Grade A closed at $2.2000. The weekly average for Grade A is $2.1640 (+0.1345). DRY WHEY: Extra grade dry whey closed at $0.6900. The weekly average for dry whey is $0.7000 (+0.0030). 

BUTTER HIGHLIGHTS: Domestic butter demand is mixed. Some stakeholders in the West region report strong demand, while some in the Central and East regions report lighter demand. Export demand is strong and butter produced in the US remains competitively priced. Cream spot loads are available for butter manufacturers. Demand from butter makers for spot cream is not heavy. Cream intakes at butter facilities are meeting expectations. Butter production is generally active seven days a week and sufficiently keeping up with demand. Bulk butter overages range from 2 cents below to 7 cents above market across all regions. 

CHEESE HIGHLIGHTS: Northeast cheese production is mixed as some plants face downtime while others run busy schedules supported by ample milk. Retail demand is softer, but bulk interest and strong export orders to Southeast Asia and the Middle East keep inventories balanced. Central milk output remains strong, with plentiful spot volumes and Class III spot prices ranging from $8-under to $2-under Class. Cheesemakers note some maintenance downtime, but production stays strong as demand and firmer export interest keep spot loads available. Western milk supplies keep cheese output steady, though spot milk is tightening. Domestic demand is quieter due to a conference, but international interest is stronger. Overall market sentiment is neutral. 

FLUID MILK HIGHLIGHTS: Nationwide, milk production is seasonally strong and volumes are up. The Northeast and Upper Midwest are in the beginning stages of spring flush while states with warmer climates are nearing the end of the flush. Class I demand is steady to strong. Most educational institutions have resumed classes after spring break, keeping demand up. Class II demand is steady to strong. Ice cream production is on the rise, and manufacturers are taking in spot loads of cream to maintain full schedules. Class III production is steady. Downtime left spot loads of milk available on the market in several areas. Class III milk prices range from $8-under to $2-under Class this week. Class IV demand is strong. Butter churns are operating at or near full capacity and some facilities are taking spot loads of cream. Condensed skim is more available this week due to downtime in some facilities. Cream multiples for all Classes range:1.10 – 1.35 in the East; 1.10 – 1.30 in the Midwest; 1.06 – 1.28 in the West. 

DRY PRODUCTS HIGHLIGHTS: Nonfat dry milk prices posted strong gains across all regions this week, led by notable increases at the top of the mostly range for low/medium heat in the Central and East regions. Big gains were also seen at the top of each price range for all heat categories across all regions. Dry buttermilk prices also moved higher nationwide, with the most significant jump occurring at the top of the West region price range. Dry whey markets were mixed, showing steady to modest shifts. Central region prices held firm at the top of both the range and mostly series, while the bottom of the range edged lower and the lower end of the mostly series increased. The West region declined throughout the series except for a steady bottom of the most range. Prices in the East remained unchanged. Lactose markets were largely steady aside from a noticeable dip at the lower end of the price range. Whey protein concentrate 34% saw a sharp increase at the top of the price range while the rest of the series held steady. Dry whole milk prices firmed at both ends of the range, supported in part by strengthening nonfat dry milk markets. Acid and rennet casein prices remained unchanged. 

ORGANIC DAIRY MARKET NEWS: The Spring 2026 meeting of the National Organic Standard Board (NOSB) is scheduled for May 12-14 in Omaha, NE. The written comment period is open through May 4, and online webinars regarding public comments will be hosted on May 5 and 7. AMS reported the February 2026 US sale of total organic milk products was up the previous year. From the start of the year through February, the US sale of total organic milk products was down compared to the same period a year prior. Organic retail dairy advertisements increased in week 16. Ads increased for the four most advertised organic commodities: milk, yogurt, ice cream and cheese. 

FEBRUARY ESTIMATED SALES: Total Fluid Products Sales 3.4 billion pounds of packaged fluid milk products were shipped by milk handlers in February 2026. This was 0.4 percent lower than a year earlier. Estimated sales of total conventional fluid milk products decreased 0.5 percent from February 2025 and estimated sales of total organic fluid milk products increased 0.4 percent from a year earlier.