Weekly protein report: China reopens poultry trade for 17 US states

30 May 2026

17 minute read

By: Jim Wyckoff

South America

North America

Asia

Oceania

Lean hog futures see corrective bounce

June lean hog futures on Wednesday rose $1.475 to $97.60, near the daily high. The hog futures market saw short covering and perceived bargain hunting. Solid gains in the cattle futures markets Wednesday also spilled over into some better buying interest in hog futures. Buying interest was limited as the near-term technical posture for June hogs remains firmly bearish. Prices are still in a steep downtrend on the daily bar chart. The latest CME lean hog index is down 18 cents at $90.70. Today’s projected cash index price is down 12 cents at $90.58. The national direct five-day rolling average cash hog price quote Wednesday was $94.25.

Cattle futures post strong price rebounds

June live cattle on Wednesday rose $3.20 to $251.425. August feeder cattle rallied $5.175 to $354.625. The cattle futures markets posted solid rebounds on short covering and perceived bargain hunting, led by feeders. Key for the bulls will be to show continued strength, or at least stability, in the coming sessions. It could well be that feeder futures will lead live cattle in the near term. USDA at midday Wednesday reported very light cash cattle trading so far this week, averaging $256.00. The agency reported cash cattle trading last week averaged $258.77, down $4.08 from the week prior’s record high of $262.85.

Australia braces for new China beef tariff

Bloomberg reports Australia’s beef industry expects China’s new import quota system to trigger a 55% tariff within weeks, but producers believe surging demand from the US and Southeast Asia will cushion the blow

Australia’s red meat sector is preparing for a potential 55% Chinese tariff on beef imports as early as mid-June after Beijing warned Canberra was nearing its annual shipment quota, according to Bloomberg. China’s new safeguard system, introduced late last year to protect domestic livestock producers, caps Australian beef exports at 205,000 metric tons before the punitive tariff takes effect. Industry analysts told Bloomberg that Australia is on pace to hit that threshold within weeks.

Despite the looming trade barrier, Australian beef exporters remain relatively confident because of strong global demand and a broad customer base outside China. Andrew Cox of Meat & Livestock Australia said the industry is “not completely reliant” on China, noting that Australia maintains a diversified export portfolio.

Australia’s beef sector has started 2026 at a record pace, producing more than 730,000 metric tons in the first quarter, up 8% from a year earlier. The US remains Australia’s largest export destination, accounting for 29% of overseas sales during the first three months of the year, while China represented 21%. Japan and South Korea combined accounted for another 32%.

Demand from the US has been particularly strong as the American cattle herd sits at multi-decade lows. Analysts also noted that China’s recent reopening to hundreds of US beef plants following President Donald Trump’s visit to Beijing could indirectly create additional opportunities for Australian exporters by tightening US domestic beef supplies.

Some analysts believe Australian beef would likely continue flowing into China even after the tariff is imposed, though at lower volumes. He added that exporters are already expected to redirect more product into Southeast Asia and the US market, where grain-fed beef demand remains robust.

Meanwhile, Australian officials continue lobbying Beijing to relax or expand the quota system. Trade Minister Don Farrell raised objections during meetings with Chinese Commerce Minister Wang Wentao last week, though there has been no indication China plans to ease restrictions. Industry officials acknowledged considerable uncertainty remains because this is the first year the quota mechanism has been implemented.

Republicans and pork industry lobbyists push Senate Ag chairman to revisit California livestock confinement language in farm bill talks

Senate Ag Committee Chair John Boozman (R-Ark.) is facing growing pressure from some Republicans and agricultural groups to reconsider excluding Proposition 12 pre-emption language from the Senate farm bill, as lawmakers debate which controversial provisions can survive the chamber’s bipartisan threshold.

Sen. Chuck Grassley (R-Iowa) publicly criticized Boozman’s decision Tuesday, arguing the farm bill represents the best — and possibly only — legislative vehicle to address California’s animal confinement standards law. Grassley said Boozman’s effort to craft a bipartisan package has complicated inclusion of the provision because several Democrats oppose overturning or weakening Proposition 12.

Boozman reportedly supports finding a fix to Proposition 12 but believes the current language lacks the bipartisan backing needed to secure the 60 votes necessary for Senate passage. Boozman intends to continue discussions aimed at finding a compromise solution.

The debate centers on language approved by the House that would effectively preempt California’s Proposition 12 standards, which regulate the confinement of breeding pigs, egg-laying hens and veal calves and impose requirements on products sold into the California market. Pork producers and many farm-state Republicans argue the law creates costly compliance burdens and allows one state to dictate production standards nationwide.

The National Pork Producers Council is actively lobbying Senate Democrats in hopes of demonstrating enough bipartisan support to convince Boozman to revisit the issue. 

The House Rules Committee blocked consideration of a bipartisan amendment from Rep. Anna Paulina Luna (R-Fla.) and Rep. Jim Costa (D-Calif.) that would have stripped the Proposition 12 preemption language from the House farm bill. Luna and Costa argued that overturning the standards would disadvantage farmers who already invested heavily to comply with California’s requirements.

China reopens poultry access for 17 US states

Move restores exports under long-stalled HPAI regionalization deal, with major broiler states potentially next in line

China has lifted highly pathogenic avian influenza (HPAI)-related poultry export restrictions for 17 US states, marking a potentially important breakthrough for the US poultry industry and a sign that Beijing is again adhering to the terms of a 2020 regionalization agreement with the United States.

USDA’s Animal and Plant Health Inspection Service (APHIS) said (link) the change became effective May 15 and applies to Alabama, Alaska, Arizona, Kentucky, Massachusetts, Nebraska, Nevada, New Hampshire, New Mexico, Ohio, Oklahoma, Oregon, Tennessee, Texas, Utah, Virginia and West Virginia. Only poultry products produced on or after May 15 are eligible for export to China from those states.

The move is significant because China had continued blocking imports from states affected by HPAI outbreaks even after they had met the agreed-upon recovery timelines. Under the 2020 Regionalization Agreement, restrictions are supposed to be lifted 90 days after cleaning and disinfection procedures are completed following an outbreak.

Industry groups and USDA officials have argued for months that China was not fully honoring those provisions, creating uncertainty for US exporters and limiting access to one of the most valuable overseas markets for chicken products. The renewed implementation of the regionalization framework could provide a more predictable pathway for reopening trade. Under the agreement, APHIS submits state closeout reports once the 90-day post-cleaning period is met, and China then has five days to review and lift restrictions if appropriate.

Twenty-seven states still remain under Chinese restrictions. However, several key poultry-producing states — including Georgia, Mississippi and Missouri — have recently crossed the 90-day threshold, suggesting additional reopenings could follow in the coming weeks if the process moves as outlined in the agreement.

The development is particularly important for US chicken exporters because China is a major buyer of poultry products that have lower domestic value in the United States, especially chicken paws. Export access to China can therefore materially improve carcass values and overall export returns for the US poultry sector.

USDA Animal and Plant Health Inspection Service and the China appear to be moving back toward the original terms negotiated in 2020, a shift welcomed by the industry. National Chicken Council President Harrison Kircher called the reinstatement of the regionalization framework “a significant development,” adding that restored access could have a meaningful impact on US chicken export volumes. Kircher also credited the Trump administration, USTR and APHIS for pressing China to comply with the agreement’s terms.

Monthly USDA cattle-on-feed report leans price-bearish

USDA last Friday afternoon reported cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.6 million head on May 1, 2026. The inventory was 2 percent above May 1, 2025 and slightly higher than market expectations. Placements in feedlots during April totaled 1.70 million head, 6 percent above 2025 and well above market expectations. Net placements were 1.65 million head. During April, placements of cattle and calves weighing less than 600 pounds were 330,000 head, 600-699 pounds were 245,000 head, 700-799 pounds were 390,000 head, 800-899 pounds were 457,000 head, 900-999 pounds were 210,000 head, and 1,000 pounds and greater were 70,000 head. Marketings of fed cattle during April totaled 1.64 million head, 10 percent below 2025, in line with market expectations. Other disappearances totaled 52,000 head during April, 4 percent above 2025.

USDA raises 2026 food inflation forecast as grocery costs accelerate

Beef prices projected for biggest annual increase in decades while grocery inflation moves above long-term averages

USDA sharply raised its outlook for 2026 food inflation, warning that grocery prices and overall food costs are now expected to rise faster than their long-term averages as consumers continue to face pressure from elevated meat and energy costs.

USDA now forecasts overall food prices to increase 3.4% in 2026, up from a 2.9% estimate in April. 

Grocery, or food-at-home, prices are projected to rise 3.2%, compared to the prior 2.4% forecast. 

Restaurant, or food-away-from-home, prices are expected to increase 3.5%, slightly below the previous estimate of 3.6%.

The updated projections place both overall food inflation and grocery inflation above their respective 20-year averages of 3% and 2.6%. USDA said the latest grocery inflation outlook is the highest since the agency began issuing 2026 forecasts in July 2025.

A major driver remains beef prices, which USDA now expects to climb 12.1% this year. That would match the surge seen in 2014 and would mark the largest annual increase since 1979, when beef prices jumped 27.4%. Retail beef prices in April alone rose 3.1% from March and were nearly 15% above year-ago levels.

USDA pointed to historically tight cattle supplies as the central factor behind the rally, though it also emphasized that consumer demand for beef has remained resilient despite higher prices. Because beef carries a sizable weighting in the government’s food inflation calculations, the category is expected to have an outsized impact on overall grocery costs throughout the year.

Among the 15 major grocery categories tracked by USDA, nine are now forecast to rise faster than their historical averages, including beef and veal, fish and seafood, fresh fruits and vegetables, processed produce, sugar and sweets and nonalcoholic beverages. Prices for pork, poultry and bakery goods are expected to rise more modestly, while eggs, dairy products and fats and oils are forecast to decline from 2025 levels.

Egg prices are projected to post the largest annual decline in USDA records dating back to 1974, falling 29.8% after surging 21.4% in 2025 amid widespread Highly Pathogenic Avian Influenza (HPAI) outbreaks. USDA said fewer HPAI detections this year, along with improved replacement flock availability, are allowing egg production to recover more rapidly.

The agency also noted that grocery prices still account for roughly 61% of total food spending, compared to about 39% for restaurant spending, underscoring the broader economic impact of sustained increases at supermarkets.

Meanwhile, USDA warned that higher fuel costs could further intensify food inflation pressures if energy prices remain elevated, as transportation and distribution expenses continue filtering through the food supply chain.

USDA’s China poultry marketing update

USDA reports China’s poultry & products import market contracted significantly in 2025, with total imports falling to $2.1 billion, due to increased domestic supply, HPAI-related import restrictions, and ongoing trade tensions. The United States remained China’s fourth-largest poultry supplier, dominated by chicken paws. A popular food, chicken paws remain a staple in traditional Cantonese cuisines and ready-to-eat snacks, presenting continued opportunities for US exporters. 

Rollins, beef tariffs and the real fight inside Trump trade policy

Internal disagreements over beef import policy are exposing broader tensions inside the Trump administration between inflation politics, rural political optics and long-term US agricultural competitiveness

The emerging details surrounding the Trump administration’s internal debate over temporarily lowering tariff-rate quotas (TRQs) on imported beef reveal a much deeper policy divide than simply whether additional imports might modestly reduce consumer prices.

Hassett push. According to multiple contacts familiar with the discussions, the push to temporarily expand beef import access was driven largely by National Economic Council (NEC) Director Kevin Hassett and White House economic advisers focused on inflation optics and consumer food prices. One US government contact said USDA Secretary Brooke Rollins “was in the loop” but indicated the effort was “largely driven by Kevin Hassett and his ridiculous economic data.”

The underlying argument from Hassett’s team reportedly centered on the idea that modestly increasing beef imports through TRQ adjustments could help ease elevated retail beef prices, which remain historically high amid tight US cattle supplies, drought-driven herd liquidation over recent years and strong domestic demand.

But USDA economists reportedly reached a very different conclusion.

Minimal impact. According to contacts familiar with the internal analysis, USDA determined that adjusting beef TRQs would likely have only a marginal impact on retail prices and would not materially lower inflation for consumers. One source summarized the department’s position bluntly: “As you have seen, more Argentinian beef barely made a difference.”

China reopens market access for three Brazilian beef plants

Decision signals renewed confidence in Brazil’s food safety system as Beijing continues balancing global beef supplies amid tight import quotas and broader trade negotiations

China has approved the resumption of beef exports from three Brazilian meatpacking plants that had been suspended since 2025, according to Brazilian beef industry group Abiec. The decision followed meetings between Brazilian and Chinese officials in Beijing and marks another step in strengthening agricultural trade ties between the two countries.

Abiec said the move reinforces Beijing’s confidence in Brazil’s sanitary inspection system and the quality of Brazilian beef production. Among the facilities cleared to resume shipments is the Mozarlândia plant operated by JBS, the world’s largest meatpacker, Abiec President Roberto Perosa told Reuters.

The development comes at a critical time for the global beef market. Brazil remains the world’s largest beef exporter, while China is by far its largest customer. Beijing has been attempting to manage rising beef imports under its new quota system, which has already prompted lobbying from Brazil and Australia for additional access after both countries neared their annual export limits.

The reopening of the Brazilian facilities also highlights China’s ongoing effort to diversify and stabilize protein supplies while navigating broader trade dynamics with major exporters, including the United States. The decision could modestly improve Brazilian export flows in coming months, particularly as global beef demand remains firm and several importing nations continue grappling with tight cattle supplies and elevated meat prices.

FSIS finalizes changes to swine inspection procedures

USDA says eliminating certain manual inspection requirements will reduce costs while maintaining food safety standards

USDA’s Food Safety and Inspection Service (FSIS) has finalized a rule eliminating mandatory incision of mandibular lymph nodes and palpation of viscera during post-mortem swine inspections at all federally inspected pork slaughter facilities, including plants operating under both traditional inspection systems and the New Swine Slaughter Inspection System (NSIS).

FSIS said the inspection steps are no longer necessary to ensure food safety because condemnation rates in swine are low and most disease conditions that would warrant condemnation can be identified visually through other pathological changes in carcasses or carcass parts.

The agency first proposed the change in August 2025, arguing that the older inspection methods added labor and processing costs without providing meaningful additional food safety benefits. Industry groups had generally supported the proposal, saying the changes better align inspection practices with modern slaughter operations and current disease risks.

According to FSIS, the final rule will take effect July 20 and is expected to generate annual savings of roughly $7.4 million to $14.7 million for the pork industry, while reducing agency costs by an estimated $2.0 million to $8.4 million annually.

The move continues USDA’s broader effort to modernize meat inspection procedures and shift toward risk-based inspection systems that rely more heavily on visual inspection and plant-level preventive controls.

Weekly USDA dairy report

CME GROUP CASH MARKETS (5/22) BUTTER: Grade AA closed at $1.5350. The weekly average for Grade AA is $1.5700 (-0.0685). CHEESE: Barrels closed at $1.4800 and 40# blocks at $1.5050. The weekly average for barrels is $1.5090 (-0.0760) and blocks $1.5405 (-0.0630). NONFAT DRY MILK: Grade A closed at $2.0725. The weekly average for Grade A is $2.1800 (-0.1010). DRY WHEY: Extra grade dry whey closed at $0.6800. The weekly average for dry whey is $0.6860 (-0.0010). 

BUTTER HIGHLIGHTS: Stakeholders report steady domestic butter demand throughout the country. Manufacturers continue reporting retail sector activity outpacing food service sector activity. Export demand varies from steady to strong. Stakeholders indicate more challenging transportation logistics due to tighter space availability in shipping lanes and at ports. Cream production is meeting butter manufacturers' needs, but some are purchasing additional spot loads for their butter churns. Butter production is busy ahead of approaching holidays and seasonally tighter summertime cream volumes. 80 and 82 percent butterfat butter loads are available. Bulk butter overages range from four cents below to 5 cents above market across all regions. 

CHEESE HIGHLIGHTS: Northeast milk production is strong, with cheesemakers running full schedules on contracted milk. Class III spot milk and condensed skim are scarce. May sales are improving, retail demand is lighter, bulk cheese demand is firm, and export interest exceeds supply. Central milk output is steady and above last year. Cheesemakers are running full schedules. The upcoming holiday is factoring into price variance for spot milk. Domestic demand is stronger and exports remain steady. Western milk production is meeting expectations, but is tight in some areas. Spot milk demand is moderate. Cheese production ranges steady to lighter ahead of the holiday and spot inventories remain tight. Domestic demand is steady while export demand is steady to strong. 

FLUID MILK HIGHLIGHTS: Farm milk production varies by region this week. California and some Southern states are experiencing steady to declining milk production while Northern states in the Central and East regions have strong milk volumes. Milk utilization is generally up with most manufacturers scaling up production prior to the upcoming holiday. Class I demand is steady and light. Bottling is expected to lighten as many educational institutions prepare for the summer break. Class II demand is strong. Many ice cream manufacturers are increasing production and as a result, buying spot loads of cream. Class III demand is steady. Class III spot milk is readily available, as many facilities are planning downtime this weekend for the holiday. Class IV demand is steady to strong. Powder production remains very active, as nonfat dry milk and buttermilk powder continue to draw high demand. Butter churns are active but only a handful of facilities are purchasing spot loads of cream. Condensed skim demand is strong and the spot market is active. Buyers are having difficulty finding volumes. Prices range from flat to $0.25 over Class. Cream multiples for all Classes range:1.18 – 1.43 in the East; 1.05 – 1.30 in the Midwest; 1.00 – 1.20 in the West. DRY 

PRODUCTS HIGHLIGHTS: Nonfat dry milk prices were mixed this week. In the Central and East regions, price ranges moved higher across all heat levels, though the mostly range for low/medium heat held steady. In the West, low/medium heat prices were steady at the bottom but lower at the top of the range, while the mostly range eased at the bottom and edged slightly higher at the top. High heat prices in the West slipped modestly at both ends of the price range. Dry buttermilk prices varied across all regions, as the lower ends of the ranges moved upward, while the upper ends were steady to slightly lower. top of the Central price range and in the mostly range for the West. Lactose prices eased at the bottom of the price range but strengthened at the top, while the mostly range remained unchanged. Whey protein concentrate (WPC) 34% prices narrowed, as the lower end of the range strengthened and the upper end softened, with the mostly range holding steady. Dry whole milk prices increased at the bottom of the range and were unchanged at the top. Acid casein prices were steady, while rennet casein prices recorded significant gains at both ends of the range. 

INTERNATIONAL DAIRY MARKET NEWS

WEST EUROPE: European milk production is expected to contrast further through 2026 as producers and processors continue shifting more milk into higher-value cheese manufacturing rather than fluid products. Despite expectations for longer term contraction in EU milk production, near-term seasonal milk flows remain elevated across several key member states. Average EU milk prices have moved lower in recent months as expanding milk supplies and softer commodity markets weigh on farmgate returns across the region. 

EAST EUROPE: Poland continues to strengthen its position in the Eastern European cheese market, supplying nearly 85% of Ukraine's imported cheese volumes. Foot and mouth disease conditions in Greece have deteriorated as additional cases prompted tighter livestock movement restrictions. 

OCEANIA and AUSTRALIA: Through the remainder of the season, elevated costs and uncertain conditions may limit milk production. Dairy Australia also announced packaged milk sales data recently. In March 2026, milk sales totaled 204.3 million liters, up 5.6 million liters YoY. Export data from Dairy Australia for Australian milk exports state volumes from July 2025 - March 2026 totaled 130,556 metric tons. NEW ZEALAND: The 2025/2026 season milk price forecast has been revised up from $9.73/kgMS to $9.74/kgMS. New Zealand milk collections surged in April, with 160.5 million kgMS, up 6.9 percent YoY and 4.2 percent above the previous April record. 

SOUTH AMERICA: Milk production across Latin America continues posting year-over-year (YOY) gains, supported by generally favorable weather conditions. However, profitability is being negatively impacted by rising energy costs, affecting both corn based and pasture-based feeding systems. For the region, a pullback in demand is expected as consumers respond to rising inflation.