2 March 2025

12 minute read

By: Sarah Mikesell

USDA upped its 2025 egg price forecast to a 41.1% increase

The range of price is up 15.0% to 74.9%, more than double the 20.3% rise they forecast in January. USDA started their 2025 egg price forecast in July 2024 looking for them to decline 7.6% versus 2024

“Retail egg prices increased by 13.8% in January 2025 after rising by 8.4% in December 2024,” USDA detailed. “Retail egg prices continue to experience volatile month-to-month changes due to an outbreak of HPAI that began in 2022. HPAI contributes to elevated egg prices by reducing egg-layer flocks and egg production. About 18.8 million commercial egg layers were affected by HPAI in January 2025, the highest monthly total since the outbreak began in 2022.”

Egg prices in January were 53% higher than January 2024 and “surpassed the previous peak prices in January 2023,” USDA detailed.

USDA raises 2025 food price forecasts amid rising grocery costs

US consumers will face steeper food prices in 2025, as USDA now predicts a 3.4% increase in overall food costs, up from January’s 2.2% forecast. Grocery prices are expected to rise 3.3%, a sharp revision from the previous 1.3% estimate, while restaurant prices will increase 3.4%, slightly lower than the earlier 3.6% projection.

The forecasted hikes surpass the 20-year average of 2.9% for overall food and 2.6% for grocery prices.

A key driver is egg prices (as previously noted), though other food categories have also seen upward revisions. Notably, meat prices are now set to rise 1.4%, beef and veal 3.2%, and pork 1.2%, while poultry prices are expected to remain flat. Meanwhile, cereals and baked goods are the only category expected to decline, albeit slightly at -0.1%.

With food costs climbing at the highest rate since 2023, when prices surged 5.8%, consumers are likely to feel the strain of inflation at grocery stores and restaurants alike.

USDA semiannual report on China poultry industry

USDA forecasts and revised estimates provided in this report are issued by FAS China and are not official USDA data. FAS China provides this analysis as part of its required reporting to maintain a worldwide agricultural information system and support a level playing field for U.S. agriculture.

Production: Post maintains its forecasts for slightly larger chicken meat production in China in 2025 but revises downward the growth rate from the new 2024 estimate. Post forecasts stable yellow broiler production in 2025. The slower growth rate is mainly attributed to slower expansion of white broiler production.

Consumption: Post maintains minor growth in its chicken meat consumption forecast for 2025 due to a shift towards healthier animal proteins. The growth in consumption will mainly come from greater demand for white broiler chicken meat.

Trade: Post forecasts that chicken meat imports in 2025 will remain lower than in 2024 due to increased domestic production, sluggish consumption growth, animal disease controls on supplying countries, and the depreciation of the Chinese currency (yuan or Renminbi) with respect to the U.S. dollar at the end of 2024 and through the first several weeks of 2025.

Researcher: China’s pork demand has no more room for growth

There is no more room for Chinese demand for pork to grow in the future, Zhu Zengyong, a researcher with the state-backed Chinese Academy of Agricultural Sciences said. Current demand in China is stable and unlikely to rise further. Given the current price of pork, it is not recommended that companies expand breeding sow capacity this year and they should instead focus on improving the efficiency of breeding sows, he said. The State Council said it will strictly enforce and supervise pig slaughter and regulate pork production capacity. China’s imports of pork meat and offal shrunk 15.7% last year, a fourth consecutive annual decline, and Zou forecasts imports to further decline in 2025.

Neutral USDA Cattle on Feed Report

USDA last Friday estimated the large US feedlot (1,000-plus head) inventory at 11.716 million head as of Feb. 1, down 0.7% from year-ago. Placements increased 1.7% while marketings rose 1.4% from year-ago levels during January. All three categories were close to pre-report expectations and will have limited market impact.

Canada holds firm on dairy market access ahead of USMCA review

There is no concrete evidence that Canada will offer dairy market concessions in the upcoming review of USMCA. However, tensions persist between the U.S. and Canada over market access, shaping a complex and contentious trade landscape. Since the USMCA took effect in 2020, U.S. dairy exports to Canada have increased by 34% ($173 million), falling short of the 43.8% ($227 million) forecasted by the U.S. International Trade Commission (ITC). This shortfall is attributed to Canada’s partial compliance with tariff-rate quota (TRQ) allocations, which the U.S. sees as restrictive. In November 2023, a USMCA dispute panel ruled in favor of Canada, allowing it to maintain its current TRQ allocation system, a setback for U.S. dairy interests. Despite the ruling, U.S. trade officials continue to voice concerns about Canada’s approach. Despite ongoing friction, Canada’s historically strong protections for its dairy industry suggest that any significant policy shift would require substantial leverage or incentives from the U.S.

In face of escalating egg prices, Trump administration formulating a fresh approach on avian influenza

The Trump administration will emphasize vaccinations and enhanced biosecurity measures over the mass extermination of chickens when an outbreak occurs. National Economic Council (NEC) Director Kevin Hassett has been reviewing different proposals that may have already been presented late last week to President Donald Trump. While Hassett has not divulged many specifics about the new approach, he mentioned that it would entail a "better, smarter perimeter" around poultry farms. He argued that it is illogical to kill all the chickens within that perimeter when the disease is being propagated by wild ducks and geese.

NCC seeks rule change to divert 400 million eggs to market

The National Chicken Council (NCC) has petitioned the FDA to lift a regulation preventing broiler industry eggs from entering the food supply, arguing the move could ease record-high egg prices caused by the bird flu outbreak. The 2009 rule forces broiler producers to discard surplus hatching eggs instead of selling them to processors, despite government risk assessments affirming their safety. If granted, the request would allow nearly 400 million eggs annually to be used in processed foods like bread, pasta, and mayonnaise, alleviating strain on table egg supplies. As we have noted before, NCC previously sought relief under the Biden administration in 2023 but was denied. Now, with egg prices soaring, the organization is urging swift action from the Trump administration.

USDA Livestock, Dairy, and Poultry Outlook: February 2025

USDA reports per capita consumption of pork and broilers is projected to increase In 2025, while beef, turkey, and egg consumption is projected to fall from 2024. Per capita availability is calculated by subtracting exports and ending stocks from total supply (beginning stocks, imports, and production) and dividing by population. Projected per capita beef consumption for 2025 was adjusted up from last month’s report but is still expected to be lower than the 2024 estimate. Pork consumption per capita for 2025 is projected at 51.4 pounds, up slightly from the 2024 estimate. Broiler meat is the most consumed animal product, and per capita consumption has been growing for many years; it is projected to be 103.1 pounds in 2025. Consumption of turkey, by comparison, has been falling in recent years and is projected at 13.4 pounds in 2025. As table egg production has faced disease pressure from Highly Pathogenic Avian Influenza (HPAI), per capita consumption has also fallen. Per capita egg consumption for 2025 is projected at 270.7 eggs, or 22.6 dozen.

Summary Beef/Cattle: The January Cattle report confirms historically tight supplies of cattle heading into 2025. However, some relief was provided in the form of a larger calf crop in 2024 than previously expected and the reintroduction of Mexican feeder cattle into the supply chain beginning in February. Projected beef production in 2025 is raised to 26.565 billion pounds, up 775 million pounds from last month. This is based on increased cattle supplies available for placement and heavy cattle slaughter weights early in the year being carried forward. Slaughter cattle prices in 2025 are raised on firm demand and the fact that cattle available for placement in feedlots will still be less than last year despite more feeder calves being available than previously expected. This year’s import forecast is unchanged from last month at 4.770 billion pounds. However, export projections are raised from last month to 2.795 billion pounds on increased beef production available for export.

Lamb\Sheep: The January 1 sheep inventory report shows that the total sheep and lamb inventory increased slightly between 2024 and 2025. The forecast for 2025 lamb and mutton production was increased compared to the January issue of this report from 132 to 134 million pounds, roughly the same as 2024 production.

Dairy: The milk production forecast for 2025 is lowered from last month based on smaller-than expected dairy herd size in 2024 and fewer replacement heifers as of January 1, 2025. Wholesale price forecasts for 2025 have been increased for Cheddar cheese to $1.880 on strong demand, but decreased for dry whey, butter, and nonfat dry milk to $0.605, $2.645, and $1.295 per pound, respectively, based on recent price movements, ample supplies, and weaker-than-expected demand. With the revised price forecasts for dairy products, Class III and IV milk price forecasts for 2025 have been decreased to $19.10 per hundredweight (cwt) and $19.70 per cwt, respectively. The 2025 all-milk price estimate is adjusted lower to $22.60 per cwt. The milk price forecasts account for the updated Federal Milk Marketing Order formulas effective later in 2025.

Pork/Hogs: First-quarter pork production is unchanged at 7.1 billion pounds, while first-quarter prices of live equivalent 51-52 percent lean hogs are raised $1 to $62 per cwt on strong pork demand. Pork production for the year was increased slightly on higher-than-expected dressed weights. Total 2025 pork exports are forecast at about 7.3 billion pounds, up 2.5 percent from last year.

Poultry/Eggs: Projected broiler production for 2025 was adjusted lower in the first half but higher in the second half, resulting in an unchanged total projection. Broiler exports were adjusted down, reflecting international competition. Projected quarterly broiler prices were adjusted to reflect recent price trends. Projected table egg production was adjusted down on recent disease pressure resulting in a smaller laying flock. Projected egg prices are adjusted up in kind, also reflecting recent price trends. Projected egg exports in 2025 were adjusted down, reflecting lowered production expectations as well as less-competitive prices. Turkey production was adjusted down in 2025 to reflect low placements, along with disease pressure. Turkey export expectations were adjusted down based on lowered production expectations, and projected turkey prices were adjusted down on recent price trends.

Weekly USDA dairy report

CME GROUP CASH MARKETS (2/21) BUTTER: Grade AA closed at $2.4150. The weekly average for Grade AA is $2.4219 (+0.0234). CHEESE: Barrels closed at $1.8000 and 40# blocks at $1.9000. The weekly average for barrels is $1.8019 (-0.0196) and blocks $1.9044 (-0.0096). NONFAT DRY MILK: Grade A closed at $1.2400. The weekly average for Grade A is $1.2600 (-0.0410). DRY WHEY: Extra grade dry whey closed at $0.5450. The weekly average for dry whey is $0.5475 (-0.0200).

BUTTER HIGHLIGHTS: Butter demand varies from steady to lighter throughout the country. Some sellers convey buyers are purchasing fewer loads at a time than seasonally anticipated. Affordable cream volumes are plentiful. Some distressed cream load offers at very low multiples were again reported. Butter production schedules are generally busy working through cream volumes. However, some Central region butter manufactures noted adverse weather caused lightened production schedules to various degrees this week. Bulk butter overages range from 12 cents below to 5 cents above market, across all regions.

CHEESE HIGHLIGHTS: Cheese production schedules are trending steady throughout the U.S. In the East region, contacts relay steady cheese production schedules. Processors share cheese demand is seasonally steady, with some noting strong seasonal demand for some Italian cheese varieties. In the Central region, cheesemakers note both plant maintenance and inclement weather have caused mixed production schedules. Milk availability, too, is mixed in some pockets of the region. Spot milk prices range from $2 under Class to $0.25 over Class III. In the West region, cheese production schedules are steady. Some cheesemakers share production has been tempered by tighter spot milk availability. Cheese inventories vary by type throughout the region.

FLUID MILK HIGHLIGHTS: Even amid the cold, wintry weather that cut across the United States this week, milk production is largely increasing seasonally. Although inclement weather created a few disruptions to milk pickups, deliveries, and some plant downtime in the Central and mid-Atlantic parts of the country, milk availability was mostly in balance with processing needs. The Central spot milk range was $2 under to $0.25 over Class III for the week. Class demands were steady with only a few pockets of downturns within Class I and Class III noted. Cream remains in abundance across the country. Even as Class II cream demands begin to track higher, cream handlers are working tenaciously to find processing homes for their supplies. Cream multiples continue to be under pressure, and some contacts report distressed cream loads are in the market. Condensed skim availability is increasing, but demand varies between the two coasts. Cream multiples for all Classes range 0.80-1.10 in the East region, 0.50-1.14 in the Central region, and 0.70-1.16 in the West region.

DRY PRODUCTS HIGHLIGHTS: The Central and East low/ medium heat nonfat dry milk (NDM) price range contracted as the West NDM price range moved lower. Demand is mixed. High heat NDM prices moved higher in the Central and East but lower in the West. Dry buttermilk prices are steady to lower. Some buyers are making partial load purchases to cover immediate needs but are hesitant to take on additional volumes. The dry whole milk price range contracted. Nationwide, dry whey prices moved lower. A growth in availability and tepid domestic and export demand has contributed to a weaker whey market. Lactose prices are unchanged, but Q2 contracting is underway. Whey protein concentrate 34% prices are trending higher. Acid and rennet casein prices are unchanged.

ORGANIC DAIRY MARKET NEWS: The USDA's 101st Annual Agricultural Outlook Forum is scheduled for February 27-28 in Arlington Virginia. This event is the USDA's largest annual gathering attracting participants in person and virtual attendees. On Friday, February 28 at 3:30 PM EST there will be an Organic Outlook session discussing trends and developments in organic production and consumption. The total number of organic dairy ads in the week 8 retail survey declined by 65 percent from the previous survey. The most advertised organic cheese product in the week 8 retail survey was 6-8-ounce shred style. The weighted average advertised price for organic 6-8-ounce shred style cheese was $3.07, while this item's conventional counterpart had a weighted average advertised price of $2.22. The weighted average advertised price for half gallon organic milk increased by 5 cents, to $4.99 this week. Conventional half gallon milk has a weighted average advertised price of $1.99, creating a week 8 organic premium of $3.00. Federal Milk Market Order 1, in New England, reports utilization of types of organic milk by pool plants. During January 2025, organic whole milk utilization totaled 17.99 million pounds, down from 19.10 million pounds the previous year.

NATIONAL RETAIL REPORT: Conventional dairy ads increased by 18 percent, while organic dairy ads decreased by 65 percent this week. Although total conventional cheese ads decreased slightly when comparing week 8 to week 7, cheese remained the most advertised conventional dairy commodity. Conventional sliced, shredded, and block cheese all had price decreases this week. Total conventional yogurt ads increased by 27 percent compared to the prior week. Milk was ahead of only cream cheese and flavored milk in terms of total conventional dairy ads by commodity for week 8. The organic premium for a gallon container of milk for week 8 is $5.38.