Weekly protein report: Smithfield leans on packaged meats strength as earnings beat expectations

1 May 2026

18 minute read

By: Jim Wyckoff

North America

Asia

China moves to stabilize pork market with state-backed purchases

Beijing leans on commercial reserves and local governments as hog prices weaken and supply pressures build

China’s agriculture ministry said Thursday it will support local governments in purchasing frozen pork for commercial reserves, a move aimed at stabilizing domestic hog prices amid mounting supply and demand imbalances.

The policy effectively expands Beijing’s long-running use of strategic and commercial pork stockpiles as a market management tool. By encouraging local authorities to step in as buyers of last resort, officials are attempting to put a floor under prices that have come under pressure due to ample hog supply and softer consumption trends.

China maintains both central government reserves and decentralized local reserves, which are periodically used to smooth volatility in the country’s pork market — a critical component of food inflation and broader economic stability. When prices fall too sharply, state-linked entities typically step in to purchase pork for storage; when prices spike, those reserves can be released back into the market to cool inflation.

The latest directive signals concern among policymakers that current price levels could undermine profitability across the hog sector, potentially triggering herd liquidation cycles that would tighten supply later and lead to renewed price spikes. That boom-bust dynamic has historically contributed to volatility in China’s food inflation, given pork’s outsized weight in the consumer basket.

Meanwhile, the intervention also reflects a broader effort by Beijing to stabilize rural incomes and agricultural production following a period of uneven recovery in domestic demand. Weak margins for hog producers have raised concerns about financial strain across smaller operations, particularly as feed costs and broader input prices remain elevated relative to recent years.

In global markets, China’s pork policy carries spillover implications for feed demand — particularly soybeans and corn — as herd size expectations influence import needs. If government support helps stabilize producer margins and slows herd contraction, it could underpin steadier demand for feed grains, offering some support to global agricultural markets already navigating geopolitical disruptions and trade uncertainty.

The move underscores how closely Chinese authorities continue to manage key food commodities, with pork remaining one of the most politically sensitive agricultural products due to its direct impact on consumer prices and social stability.

Weekly USDA US beef, pork export sales

Beef: Net sales of 13,800 MT for 2026 were down 10 percent from the previous week and 3 percent from the prior 4-week average. Increases were primarily for South Korea (6,200 MT, including decreases of 500 MT), Japan (3,100 MT, including decreases of 500 MT), Hong Kong (1,300 MT, including decreases of 100 MT), Taiwan (1,000 MT, including decreases of 400 MT) and Mexico (800 MT). Exports of 12,300 MT were down 3 percent from the previous week and 8 percent from the prior 4-week average. The destinations were primarily to South Korea (3,800 MT), Japan (3,700 MT), Hong Kong (1,300 MT), Taiwan (1,100 MT) and Mexico (1,100 MT). Export Adjustments: Accumulated exports of beef to Korea, Democratic People’s Republic were adjusted down 6 MT for week ending April 2, 88 MT for week ending April 9 and 55 MT for week ending April 16. These exports were reported in error. 

Pork: Net sales of 46,300 MT for 2026 were up noticeably from the previous week and up 34 percent from the prior 4-week average. Increases primarily for Mexico (26,100 MT, including decreases of 200 MT), China (8,800 MT, including decreases of 200 MT), Japan (3,600 MT, including decreases of 800 MT), South Korea (2,600 MT, including decreases of 200 MT) and Canada (1,200 MT, including decreases of 700 MT), were offset by reductions for New Zealand (100 MT). Exports of 35,000 MT were down 8 percent from the previous week and 6 percent from the prior 4-week average. The destinations were primarily to Mexico (16,300 MT), Japan (4,500 MT), South Korea (4,100 MT), China (3,000 MT) and Canada (1,600 MT)

Cattle prices rally as screwworm developments reshape supply outlook

Improved control measures and persistent biosecurity risks tighten near-term availability in an already constrained market

Cattle futures moved higher this week following reporting from Reuters that prices were supported in part by developments tied to the New World screwworm, a destructive parasitic pest that poses a serious threat to livestock (see related item below). The market reaction underscores how even incremental updates on animal health risks can quickly translate into price volatility when underlying supply conditions are already tight.

The New World screwworm, a fly whose larvae feed on the living tissue of animals, has long been viewed as a worst-case biosecurity threat for cattle producers. Infestations can spread rapidly through herds, leading to severe injury or death if left untreated. As a result, any indication that the pest is present — or that containment efforts are evolving — tends to trigger immediate reassessments of supply risk across the cattle complex.

In this case, information pointing to improved tools for managing or treating screwworm infestations appears to have had a counterintuitive bullish effect on prices. While stronger control measures reduce the likelihood of widespread herd losses over the longer term, they also encourage producers to hold cattle in the near term. With greater confidence that animals can be successfully treated and brought to market weight, feedlots and ranchers are less inclined to accelerate sales, effectively tightening immediate supplies.

Meanwhile, the broader uncertainty tied to the pest continues to disrupt normal market flows. Even limited outbreaks or heightened vigilance can slow cattle movements, complicate cross-border trade, and prompt more cautious marketing decisions. These frictions tend to reduce the volume of cattle entering the supply chain in the short run, adding further upward pressure on prices.

The reaction is being amplified by the current structure of the US cattle cycle. Herd sizes remain near multi-decade lows following years of drought-driven liquidation and elevated input costs. In such an environment, the market is especially sensitive to any development that could further constrain supply, even temporarily. The combination of tight baseline fundamentals and shifting producer behavior creates a setup where both negative and positive developments tied to animal health can drive prices higher.

Trade dynamics also remain a key consideration. Animal disease concerns often raise the risk of export restrictions from trading partners, while credible containment measures help preserve market access. The latest developments appear to have struck a balance that limits long-term disruption while reinforcing near-term tightness, a dynamic that is supportive for prices.

Ultimately, the price response reflects a market grappling with both risk and resilience. The presence of a serious pest like screwworm introduces immediate uncertainty, while progress in managing the threat alters producer incentives in ways that restrict short-term supply. In a market already defined by limited cattle availability, that combination is proving to be a powerful driver of higher prices.

Cash cattle surge to record highs as futures rebound sharply

Tight supplies and renewed buying momentum push prices higher, with market awaiting trade data for clarity on drivers

The cash cattle market surged Tuesday, with trade reported as high as $255 — a dramatic $8 to $10 jump from the prior week — signaling an aggressive shift in underlying demand and tightening supply conditions. The move marks one of the strongest week-over-week advances in recent months and underscores the continued strength in fed cattle markets.

Meanwhile, cattle futures reversed their recent downturn, with the break in prices coming to an abrupt end as contracts rallied back to — and in some cases exceeded — prior highs. The sharp rebound reflects renewed confidence in the market’s bullish fundamentals, including constrained herd sizes and steady beef demand, even as volatility persists across broader commodity markets.

Market participants remain uncertain about the primary driver behind the buying surge, with questions over whether commercial hedgers or speculative funds led the push higher. That distinction could prove critical in determining the durability of the rally. Traders are now looking ahead to Friday’s Commitments of Traders report, which may provide greater insight into positioning shifts and whether managed money has re-entered the market in size.

Here is what Nesvick Trading Group says:

• First concrete data signal that cattle liquidation phase may be ending → YTD heifers processed through auction & direct sales dropped to just 40.5% of total volume through Week 17; down sharply from 43% last year & well below the 44.2% liquidation peak of 2023–2024
• Must go back to 2014–2017 herd expansion window to find YTD retention figures this low → this metric may be more accurate than Cattle on Feed data since beef-on-dairy cattle typically bypass auction entirely
• Current week: heifers at just 42% of combined auction & direct sales (vs. 45% five-year avg) → in absolute terms, 86,000 head vs. historical avg of 100,600 head (-14.5%)
• Still early but significant → if sustained drop toward 40% threshold continues, feedlots will begin competing much more aggressively for a shrinking placement pool; tighter feeder supplies likely to act as structural floor under the market.

US imports of used cooking oil on the rise amid increased biofuel blending

American imports of used cooking oil from China are set to accelerate as increased US biofuel-blending requirements kick in and the Iran war drives up energy costs, making the feedstock a relative bargain, Bloomberg reports. “Two cargoes carrying a combined 339,000 barrels of so-called UCO arrived in the US in the last month or so, according to Kpler data. The supplies represent the biggest imports this year, with about half of it delivered to Port Arthur, Texas, where Valero Energy Corp. partners with Darling Ingredients Inc. at the Diamond Green Diesel facility.” More imports are expected, with the Trump administration’s renewable fuels plan requiring a record amount of biofuels to be mixed into conventional diesel and gasoline supplies this year. “The stepped-up blending quotas are designed to boost demand and benefit American farmers and were unveiled in March as the US and Israel’s attacks on Iran caused prices for oil and fertilizer to surge,” said Bloomberg.

APHIS eases HPAI testing rules for dairy transport

Policy shift reflects changing risk profile as virus circulation stabilizes in cattle herds

The Animal and Plant Health Inspection Service (APHIS) will no longer require testing for Highly Pathogenic Avian Influenza in lactating dairy cattle transported from states where dairy herds have been confirmed free of the virus, marking a notable adjustment in federal disease-control policy as conditions evolve.

The change signals that regulators now view the risk of interstate transmission from designated “free” states as sufficiently low to justify easing earlier surveillance requirements. At the height of the outbreak, mandatory testing for lactating cattle moving across state lines was a cornerstone of the federal response, aimed at containing the spread of the virus within the US dairy sector and preventing cross-state flare-ups.

Meanwhile, APHIS emphasized that testing and movement controls will remain in place for cattle originating from affected states or regions with ongoing detections. The agency’s broader strategy continues to rely on targeted surveillance, rapid response to new cases, and coordination with state animal health officials to prevent resurgence.

The decision also reflects improved traceability, better understanding of transmission dynamics in cattle, and increased confidence in biosecurity measures adopted by producers. Federal and state officials have expanded herd monitoring and reporting protocols in recent months, allowing for more tailored restrictions rather than blanket requirements.

For dairy producers and transporters in unaffected states, the policy change is expected to reduce compliance costs and logistical delays tied to testing requirements. However, industry participants are likely to remain cautious, as the virus has demonstrated the ability to cross species and disrupt supply chains.

Looking ahead, APHIS is expected to continue refining its approach based on surveillance data, with the possibility of reimposing stricter measures if new outbreaks emerge or if interstate risks rise again.

Smithfield leans on packaged meats strength as earnings beat expectations

Private-label growth and at-home consumption trends underpin resilient consumer demand

Smithfield Foods reported first-quarter earnings that topped expectations on both sales and profits, pointing to steady demand for packaged meat products as a key driver and reaffirming its full-year outlook. The company highlighted strong performance across staple categories including bacon, ham, sausages and hot dogs, as consumers continue shifting toward cooking at home to manage elevated food costs.

That shift in behavior — tied to persistent inflation pressures across grocery and dining — has reinforced demand for value-oriented protein options. Smithfield has responded by leaning into a dual-track strategy of premium branded products alongside a growing private-label portfolio, allowing it to capture a broader range of shoppers navigating tighter household budgets.

Private-label offerings have become an increasingly important pillar of the company’s retail business. As of its prior fiscal year, roughly 40% of Smithfield’s retail sales came from private-label products, reflecting a notable rise in “trade-down” behavior among consumers seeking lower-cost alternatives without exiting the category altogether. Rather than cutting back entirely on meat purchases, shoppers are substituting toward more affordable options — a dynamic that has helped sustain overall volume.

Meanwhile, consumer resilience has remained a defining theme. Despite broader macroeconomic uncertainty, demand for center-of-plate proteins has held up better than expected, particularly within grocery channels. Smithfield’s results suggest that while pricing sensitivity is shaping purchasing decisions, it has not materially eroded underlying consumption — instead redistributing demand across product tiers.

Looking ahead, the company’s maintained annual guidance signals confidence that these consumption patterns — at-home meal preparation, private-label expansion, and steady protein demand — will continue to support performance through the remainder of the year, even as economic conditions remain uneven.

Teamsters Local 455 and Cargill Fort Morgan Face Rising Labor Tensions 

Reports of a wildcat strike emerge as workers push for higher pay and improved conditions during ongoing negotiations

Labor tensions are escalating at Cargill’s Fort Morgan, Colorado, beef processing plant as members of Teamsters Local 455 enter a critical phase of contract negotiations, with unconfirmed reports of a wildcat strike underscoring growing worker frustration over wages and working conditions.

According to union updates, Local 455 representatives and Cargill management were engaged in multiple days of negotiations this week over a successor labor agreement covering plant workers. While there has been no formal announcement of a sanctioned strike, reports circulating among workers and industry contacts suggest that some employees may have engaged in unsanctioned job actions or temporary walkouts — commonly referred to as wildcat strikes — signaling heightened pressure on both sides as talks continue.

At the center of the dispute is compensation. Workers are widely believed to be demanding higher wages, reflecting broader trends across the US meatpacking sector where tight labor markets, persistent inflation and strong beef prices have emboldened unions to seek a larger share of company margins. In similar negotiations across the industry, pay increases, structured wage progression and cost-of-living adjustments have been top priorities.

Beyond wages, safety and working conditions remain a key concern. Meatpacking plants are among the most hazardous industrial workplaces in the country, and past issues at the Fort Morgan facility — including equipment-related incidents — have kept worker safety at the forefront of union demands. Line speeds, injury risks and protective measures are likely part of the broader negotiation framework.

Healthcare and benefits are also expected to play a significant role in the discussions. Rising insurance costs have been a flashpoint in recent labor disputes, with unions resisting efforts to shift more financial burden onto workers through higher premiums or reduced coverage.

The situation at Fort Morgan reflects a broader pattern of labor unrest across the protein sector. Recent high-profile disputes, including a major strike at a nearby beef processing facility in Greeley, Colorado, have highlighted increasing willingness among workers to take aggressive action during negotiations. Meanwhile, companies are balancing labor cost pressures with operational continuity in a market already sensitive to supply disruptions.

For Cargill, one of the largest meat processors in the United States, any prolonged disruption at Fort Morgan could have ripple effects across cattle procurement and beef supply chains, particularly during a period of tight livestock availability and elevated prices.

Upshot: While it remains unclear whether the reported wildcat activity will escalate into a formal strike, the developments point to intensifying leverage dynamics between labor and management. The outcome of these negotiations will likely serve as an important signal for future bargaining across the meatpacking industry, where workers are increasingly asserting demands for higher pay and safer conditions in a high-margin, high-risk environment.

Weekly USDA dairy report

CME GROUP CASH MARKETS (4/24) BUTTER: Grade AA closed at $1.7050. The weekly average for Grade AA is $1.7010 (-0.0495). CHEESE: Barrels closed at $1.6150 and 40# blocks at $1.6450. The weekly average for barrels is $1.5910 (+0.0160) and blocks $1.6190 (+0.0425). NONFAT DRY MILK: Grade A closed at $2.2600. The weekly average for Grade A is $2.2370 (+0.0730). DRY WHEY: Extra grade dry whey closed at $0.6975. The weekly average for dry whey is $0.6995 (-0.0005). 

BUTTER HIGHLIGHTS: Stakeholders in the East and Central regions report steady retail demand this week. Stakeholders in the West region report demand varies from steady to lighter. Food service demand is lagging retail demand throughout the country. Export demand varies from steady to lighter. Contractual intakes of cream are generally keeping butter churns active seven days a week, and demand for spot loads from butter manufacturers is light. Most stakeholders indicate production is keeping pace with demand. 80 and 82 percent butterfat butter loads are available. Bulk butter overages range from 2 cents below to 5 cents above market across all regions. 

CHEESE HIGHLIGHTS: Northeast milk is abundant and cheese production is active, despite some downtime. Retail demand is light. Bulk and export interest is strengthening, especially from the Middle East and Southeast Asia, which is keeping inventories balanced. Central milk output is steady. Class III spot availability is lighter with prices $5 under to flat, as plants rely on internal milk. Cheese production is strong, with some downtime. Curd demand is steady to light, barrel interest is strong, and exports are mixed. Western milk output is keeping cheese plants well supplied. Class III spot milk demand is light and spot cheese loads are tighter. Cheese and cream cheese production remain steady. Domestic demand is steady, with retail and export demand stronger than food service. 

FLUID MILK HIGHLIGHTS: Milk production is seasonally strong nationwide. Most regions are still in the spring flush, providing an abundance of milk for each Class. Class I demand is steady to strong. Bottling operations are operating full schedules, taking advantage of educational institutions resuming classes. Class II demand is strong. Ice cream producers are taking in spot loads of milk nationwide to bolster production ahead of the summer season. Class III demand is steady. Some facilities had scheduled maintenance this week resulting in available spot loads of milk for the market. Class IV demand is strong. Butter makers are operating full schedules, in some cases, seven days a week. Some butter facilities are serving as balancing plants for excess milk. Dryers are operating robust schedules to keep up with spot demand for nonfat dry milk. Condensed skim is plentiful and demand is steady to strong, especially for Class II. Condensed skim prices range from flat market to $0.30 over Class price. Cream multiples for all Classes range:1.15 – 1.38 in the East; 1.12 – 1.35 in the Midwest; 1.06 – 1.28 in the West. 

DRY PRODUCTS HIGHLIGHTS: Nonfat dry milk prices posted strong gains this week, with several double digit increases across all regions and heat levels. The most notable advance was at the top of the mostly range for low/medium heat in the West. Dry buttermilk prices moved higher in the Central and East regions. In the West, the overall price range held steady, though the mostly range edged upward. Dry whey markets were mixed. The Central region’s price range shifted higher, but the mostly range eased at the bottom while holding firm at the top. In the West, the upper end of both the price range and mostly range strengthened, while the lower ends were unchanged. Prices in the East remained steady. The lactose price range held flat this week, though both ends of the mostly range moved slightly higher. Whey protein concentrate (WPC) 34% prices were mixed. The bottom of both the price range and the mostly range moved higher, while the mostly maximum held steady. A significant drop occurred at the top of the price range, likely reflecting a correction after last week’s elevated values. Dry whole milk prices increased across the full range, supported in part by record high nonfat dry milk prices. Acid casein prices strengthened at the bottom and remained firm at the top of the price range, while rennet casein prices increased at both ends. 

INTERNATIONAL DAIRY MARKET NEWS

WEST EUROPE: UK milk production continues to run well above prior-year levels, with strong volumes through early 2026 adding to seasonal flush pressure and testing processing capacity. Elevated output in Great Britain mirrors wider EU growth, led by gains in Germany, France, and the Netherlands, but domestic supply remains the primary driver of market pressure, contributing to softer fat values and limiting near term price recovery despite some strength in powder markets. 

EAST EUROPE: China has approved the resumption of Romanian agri-food imports, including dairy products, reopening access to a key export market for the sector. The development is expected to support export opportunities for Romanian dairy suppliers, as producers look to expand trade flows and diversify demand beyond regional markets. 

OCEANIA: AUSTRALIA: Milk production data for February 2026 was recently released by Dairy Australia. The figures show total milk production for the month reached 575.6 million liters, an increase of 3.2 million liters (0.6 percent) from the previous year. Dairy Australia released new data on packaged milk sales. In January 2026, total sales reached 197.8 million liters, an increase of 9.3 million liters compared to the previous year. Sales rose year over year in every state. 

NEW ZEALAND: Ongoing transportation disruptions continue to drive freight, insurance, and input costs higher. Persistently elevated oil prices are adding uncertainty to buyer sentiment, prompting many to delay procurement in hopes of improved cost conditions and clearer logistics ahead. 

SOUTH AMERICA: Recent data releases indicate growing milk production across South America. A number of comparisons between 2024, 2025 and the first months of 2026, show milk production continues to grow, particularly in Argentina and Uruguay. In Argentina, the National Service for Food Safety and Quality (SENASA) confirmed the first ever case of classical scrapie in sheep in the country. Although this disease does not have any direct impact to dairy cattle, it is causing interruptions to import and export operations.