27 March 2025

12 minute read

By: Jim Wyckoff

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North America

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Bullish US beef stocks data, pork stocks up from month-ago but down from year ago

USDA’s Cold Storage Report, out Tuesday afternoon, showed 428.1 million lbs. of US beef in frozen storage at the end of February, down 27.0 million lbs. from January versus the five-year average decline of 10.6 million pounds. Beef inventories declined 9.9 million lbs. (2.3%) from February 2024 and 69.2 million lbs. (13.9%) from the five-year average. Pork stocks totaled 423.1 million lbs., up 15.9 million lbs. from January, slightly less than the five-year average increase of 17.9 million lbs. for the month. Pork stocks declined 35.5 million lbs. (7.7%) from year-ago and 94.8 million lbs. (18.3%) from the five-year average. While beef stocks were bullish, price response is likely to be limited as the market doesn’t typically actively trade this data.

USDA lowers overall food inflation outlook, but egg prices soar

USDA trimmed its forecast for overall food price inflation in 2025, despite sharply raising its projection for egg prices due to ongoing bird flu impacts.

USDA now expects food prices to rise 3.2% in 2025, slightly down from its February forecast of 3.4%. Grocery (food-at-home) prices are projected to climb 2.7%, compared to the prior estimate of 3.3%. In contrast, restaurant (food-away-from-home) prices are now expected to rise 3.7%, up from February’s 3.4% forecast.

Despite the lowered overall outlook, all three categories are still projected to rise above their 20-year averages: 2.9% for all food, 2.6% for groceries, and 3.5% for restaurants. In 2024, all food prices rose 2.3%, grocery prices were up 1.2%, and restaurant prices increased 4.1%.

Egg prices spike amid avian flu outbreak. The most dramatic change comes in the forecast for eggs, with USDA now projecting a record 57.6% increase in 2025 — up sharply from the 41.1% forecast in February and far higher than the 8.5% increase seen in 2024. Retail egg prices surged 12.5% in February 2025 alone, following double-digit gains in January and December. USDA attributes the price volatility to the highly pathogenic avian influenza (HPAI) outbreak, which affected about 30 million commercial egg-laying hens in early 2025. Although detections eased in March, USDA notes that retail prices typically lag behind changes in wholesale prices, which have recently declined.

Mixed shifts in other food categories. Several food categories are now forecast to be cheaper in 2025 than in 2024:

• Pork: Down 1.5% (vs. +1.2% in February)
• Other meats: Down 0.2% (vs. +0.6%)
• Poultry: Down 0.4% (vs. unchanged)
• Dairy: Down 0.8% (vs. +2.2%)

Beef and veal prices, however, are expected to climb 5.2% in 2025, up from the February forecast of 3.2%. Beef and veal prices are now forecast to rise 5.2% in 2025 versus an outlook for an increase of 3.2% in February.

USDA also slightly reduced its forecast for other categories:

• Fats and oils: +0.3% (vs. +0.6% in February)
• Sugar and sweets: +5.1% (vs. +6.4%)
• Fruits and vegetables: Still seen rising 1.7%, though fresh fruits are now forecast to rise just 0.1%, and fresh vegetables by 2.0%.

Why overall grocery inflation remains moderate. Although egg prices are surging, their limited weight in the index — just 1.4% of total food prices — helps explain why the overall grocery inflation outlook was revised lower. In contrast, food at home accounts for 58.9% of the food component of the CPI, while restaurant spending makes up 41.1%.

USDA emphasizes that its forecasts reflect the annual average change in prices for 2025 compared to 2024, not month-to-month or year-end inflation. Some of the projected increases for 2025 have already materialized in early-year data.

Bottom line: Even with a slower pace of inflation compared to recent years, the trend remains clear: U.S. consumers will still pay more for food in 2025 than they did in 2024.

Indonesia poised to export 1.6 million eggs monthly to U.S. amid ongoing shortage

Indonesia announced its readiness to export up to 1.6 million eggs per month to the United States, aiming to ease the country’s ongoing egg shortage caused by a bird flu outbreak. With a surplus in domestic production, Indonesia sees this as a strategic opportunity to support global markets. “Stock shortage in other countries can be an opportunity for us to export. One of the export plans is to the U.S.,” said Moch. Arief Cahyono, spokesperson for Indonesia’s agriculture ministry.

This plan aligns with broader U.S. efforts to secure egg imports, including ongoing shipments from Turkey, with a shipment of approximately 15,000 tonnes (equivalent to about 33 million pounds) scheduled to continue through July 2025. As U.S. egg prices remain unstable, Indonesian imports could help stabilize the market and improve supply for American consumers.

USDA semiannual report on Brazil poultry sector

USDA reports Brazil is the second-largest chicken meat producer in the world after the United States and the largest chicken meat exporter in the world. Post forecasts chicken meat production will increase two percent in 2025 due to strong external demand, devalued Brazilian currency, socio-economic performance, production costs, and increased domestic consumption. Brazil continues to maintain its status as free from Highly Pathogenic Avian Influenza (HPAI) in commercial plants. This report considers current status quo for its estimates. Post estimates domestic consumption to increase one percent in 2025. Chicken meat exports are forecast to increase five percent in 2025, as Brazil opens new markets and consolidates and diversifies exports to existing markets. Brazil is diligently negotiating regionalization clauses to its current health certificates, with the objective of protecting its exports in case of HPAI or additional Newcastle Disease outbreaks.

Meat sales hit record $104.6 billion as Americans embrace protein-packed diets

US meat sales reached an all-time high of $104.6 billion in 2024, with volume up 2.3% from 2023, according to the 20th annual Power of Meat report released at the Annual Meat Conference. The study reveals that 98% of American households purchase meat, and 73% view it as part of a healthy lifestyle, with protein being a top dietary priority.

Consumers now shop for meat an average of 54 times a year, spending $16.12 per trip. Popular motivations include comfort meals, convenience, and creative cooking. Food Marketing Institute’s (FMI’s) Rick Stein noted that meat is included in 90% of home-cooked dinners, while Meat Institute CEO Julie Anna Potts emphasized meat’s role as a “nutrient powerhouse” supporting both health and the U.S. farm economy.

The report was conducted by 210 Analytics for FMI and the Meat Foundation, with data from Circana and sponsorship from CRYOVAC® Brand Food Packaging.

Minnesota reports first 2025 HPAI case in dairy herd

A Stearns County dairy farm has been quarantined after testing positive for H5N1 highly pathogenic avian influenza HPAI, marking Minnesota’s first confirmed dairy herd infection of 2025. The case is the second for the same 620-cow operation and the first detected through the state’s new monthly milk testing program. Officials emphasized that pasteurization effectively kills the virus, ensuring the milk supply remains safe.

USDA’s Ukraine Livestock and Products Semi-annual report

The efficiency of Ukraine’s beef production remains low, with most beef derived from dairy animals. Post expects livestock numbers and beef production to decrease in 2025, continuing a three-decade-long trend. Ukraine will remain a large live cattle exporter, with the Middle East as the primary export market, but exports of both live animals and beef will be depressed by lower animal inventory. In 2025, swine inventory is expected to decrease further after the 2024 drop caused by African Swine Fever (ASF). The number of ASF cases was significant in January-February 2025, endangering production in both household and industrial farms; however, the production decline is likely to be small and will depend on ASF developments over the rest of the year. Ukraine will have to resume pork imports to sustain domestic consumption.

Supportive USDA US Cattle on Feed Report

USDA’s Cattle on Feed Report showed the March 1 feedlot inventory down 2.1% from year-ago ag 11.577 million head, as placements plunged 17.8% from year-ago during February and marketings dropped 8.9%. The data should be supportive for cattle futures, though some of the bullishness was already built into prices ahead of the report.

USDA reports on US dairy industry

US dairy prices have experienced fluctuations over the past few months, with some products seeing significant declines. Here's a breakdown of the changes and the underlying reasons:

Price changes

1. Cheese prices:
1. Blocks: Prices have dropped substantially. For example, on March 18, 2025, block cheese prices plummeted by 7 cents to $1.5750/lb, following a sharp decline earlier in March where prices fell by 21 cents over a week.
2. Barrels: Similarly, barrel cheese prices have also decreased, with a drop of 5.50 cents on March 18 to $1.5700/lb.
2. Butter prices have weakened, with a decline of 0.75 cents to $2.2950/lb on March 18, 2025. This trend reflects adequate cream supplies and pressure from imported butterfat.
3. Dry whey: Despite overall market weakness, dry whey has shown some resilience, with recent gains supported by export demand.
4. Milk prices: USDA revised its 2025 milk price forecasts downward. The all-milk price is now projected at $21.60 per cwt, down $1.00 from last month’s forecast. Class III milk is forecasted at $17.95 per cwt, and Class IV at $18.80 per cwt.

Reasons for price declines

1. Supply and demand dynamics:
1. Seasonal supply increases, particularly the spring flush, have contributed to downward pressure on dairy product prices.
2. Improved milk availability in key cheese-producing regions has also played a role.
2. Feed costs: Rising feed costs, such as increases in corn and soybeans, have pressured dairy margins, though recent moderation in feed prices may offer some relief.
3. Global market factors:
   1. International market conditions, including increased production in New Zealand and constrained European output, have influenced U.S. dairy prices.
   2. Strong demand for butter in Oceania due to short supplies has contrasted with weaker demand in other regions.
      
4. Competition from alternatives: Growing competition from plant-based alternatives has also impacted dairy demand and prices.
5. USDA forecasts and production trends: USDA’s downward revisions in milk production forecasts and dairy product prices reflect slower-than-expected growth in milk output per cow and changes in global market conditions.

USDA Australia Livestock and Products Semi-Annual report

Australian beef production and exports are forecast to reach record levels in 2025, building on the record export results achieved in 2024. This situation is similar to 2014 and 2015, when strong U.S. demand was driven by herd rebuilding leading to similar peaks in beef production and exports for Australia. The projected record production and exports for 2025 are largely due to an elevated female slaughter rate. While live cattle exports are expected to remain relatively stable in 2025, competition from Brazil may pose a potential disruption. In the pork sector, Australian production is projected to grow by four percent in 2025, marking the fourth consecutive year of expansion. This increase in production will help meet rising domestic demand, fueled by a growing population, while exports are also expected to rise.

Weekly USDA dairy report

CME GROUP CASH MARKETS (3/21) BUTTER: Grade AA closed at $2.3025. The weekly average for Grade AA is $2.2980 (-0.0345). CHEESE: Barrels closed at $1.5500 and 40# blocks at $1.6025. The weekly average for barrels is $1.5750 (-0.0930) and blocks $1.6095 (-0.0855). NONFAT DRY MILK: Grade A closed at $1.1450. The weekly average for Grade A is $1.1520 (-0.0065). DRY WHEY: Extra grade dry whey closed at $0.5000. The weekly average for dry whey is $0.4720 (+0.0005).

BUTTER HIGHLIGHTS: Butter makers are actively churning throughout the country. Cream is available in the Central and West regions. Some butter makers in the East say they have little room for loads of cream above current contracted volumes. Butter inventories are growing throughout the country, and some contacts in the East and West regions say they are building inventories for use later in the year. Contacts in all regions report strong demand for butter from retail purchasers, but food service sales are somewhat tepid. Bulk butter overages range from minus 12 to 6 cents above market, across all regions.

CHEESE HIGHLIGHTS: Cheese production continues to trend steady to stronger across the U.S. Cheesemakers in the East region share active production schedules. Seasonal milk outputs are growing, and contacts note increased milk availability has allowed them to bolster current inventory levels. Demand from the retail sector is stable while foodservice demand is quiet. Cheese plant contacts in the Central region report growing cheese stocks. Some cheesemakers share adding spot loads of milk to current production schedules. Spot milk prices were reported at $2.50 under to $0.50 above Class III. Cheese demand is in line with seasonal expectations. Contacts in the West region relay seasonal increases in milk production have enabled them to run busy manufacturing schedules. Retail cheese demand is noted to be strong while foodservice demand remains light. Some contacts share spot availability of some cheese varieties is tighter than others.

FLUID MILK HIGHLIGHTS: Even as milk output continues the climb toward spring flush, industry contacts suggest they are not getting overwhelmed by milk volumes. Milk availability is in good balance with processing needs. Nationwide, Class I demand is mixed as educational institutions cycle in and out of spring breaks. Demand from other Classes is steady. Central spot milk prices ranged from $2.50-under Class III to $.50-over Class. Milk handlers say that milkfat components have shifted lower, but they remain above typical levels for late March. Cream remains abundant, but upticks in demand have helped cream sellers find homes for loads of cream and have given a small lift to cream multiples. Cream multiples for all Classes are 0.95 – 1.15 in the East, 0.90 – 1.10 in the Central region, and 0.75 – 1.05 in the West. Condensed skim milk is readily available.

DRY PRODUCTS HIGHLIGHTS: Bears continue to reign among some staples in dry dairy ingredients in the United States. Low/medium heat nonfat dry milk prices are steady to lower in all regions. Production is busy, while condensed skim availability is holding steady with expectations of more coming on the market with spring flush. Demand is somewhat stable domestically, but international interests are uncertain. Dry buttermilk prices were steady to up in the West, but market tones are mixed. In the Central and East, dry buttermilk prices were steady to lower on softening markets. Dry whey markets remain under strong downward pressure in all regions. As milk availability grows and markets remain unstable, there are few bullish catalysts on dry whey markets nationally. Lactose prices were steady to higher on somewhat steady/ strong demand tones ahead of Q2. Whey protein concentrate continues to eschew other dry dairy products’ headwinds, as production remains limited and prices continued their march northward. Dry whole milk prices were steady to lower on growing availability. Rennet and acid casein prices held steady.

ORGANIC DAIRY MARKET NEWS: The USDA's Economic Research Service (ERS) recently published an article discussing growth in the value of U.S. organic imports, which reached $5.7 billion in 2024. The deadline to apply or the Dairy Margin Coverage (DMC) program is March 31, 2025. This program is a voluntary tool for risk management administered by the USDA's Farm Service Agency (FSA). The Agricultural Marketing Service (AMS) reported January 2025 estimated fluid product sales. The U.S. sale of total organic milk products was 276 million pounds, up 6.5 percent from the previous year. Federal Milk Market Order 1, in New England, reports utilization of types of organic milk by pool plants. During February 2025, organic whole milk utilization totaled 16.36 million pounds, up from 16.24 million pounds the previous year.

NATIONAL RETAIL REPORT: The number of conventional and organic dairy ads found in the week 12 retail survey both increased from last week. Cheese is both the most advertised conventional dairy commodity and organic dairy commodity this week and total ads for cheese increased from last week in both categories. Yogurt, the second most advertised conventional dairy commodity in week 12, appeared in more ads than last week. Organic yogurt ads also increased, compared to week 11. Conventional ice cream ads decreased from last week, but organic ice cream ads grew.