We have a new read on inflation. The Consumer Price Index is lower than what the markets were expecting.
The Index for May increased by a tenth of a percent, and the markets were expecting a two-tenths of a percent increase. Over the last year, inflation has increased 2.4 percent, which is right in line with expectations.
Increases in shelter costs were the main driver in this month’s report.
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Protein markets are fragmenting. Beef is supply-driven and more structurally expensive, whereas pork and poultry remain price-competitive.
Tight fed supplies shift margin risk to packers, strengthening cattle price leverage but increasing volatility.
Expanding chicken supplies are likely to keep prices under pressure in early 2026 despite steady demand growth.
Federal nutrition policy is signaling a stronger demand for whole foods produced by U.S. farmers and ranchers. Consumer-facing guidance favors animal protein, but institutional demand may change little under existing saturated fat limits.
Retail pricing confirms tight cattle supplies and supports continued leverage for producers, reinforcing the need for disciplined risk management.
Long-term demand uncertainty is reshaping specialty crop strategies as producers adapt to fewer, older consumers.
