For some of us, Christmas means tamales!&nbsp;&nbsp;To stick with the traditional tamale, this means pork. Yes, some people do make other kinds, and a wide variety are traditional in other countries and the Delta, but we will stick with pork for today’s article because it’s a good reminder to check on recent pork prices.



Hog and pork prices tend to have a highly seasonal pattern that, generally, peaks mid-year.&nbsp;&nbsp;That price seasonality is related to production seasonality.&nbsp;&nbsp;Hog slaughter is the lowest during the summer and tends to peak in the fall.&nbsp;&nbsp;Dressed weights per carcass are usually the lowest in the heat of summer. Following slaughter and weights, pork production bottoms are the lowest in the summer and peaks in the fall.&nbsp;&nbsp;



Pork production during June-August 2025 was 3.2 percent lower this year than last year.&nbsp;&nbsp;However, since August, pork production has been 1 percent more than last year.&nbsp;&nbsp;Production during the second week of December hit 593.6 million pounds, which was the largest weekly production in more than two years.&nbsp;&nbsp;



Hog and wholesale pork prices have declined sharply as production has increased.&nbsp;&nbsp;National, weighted average, hog carcass prices net of any carcass premiums and discounts were $82.96 per cwt in mid-December, down from a peak of $108.79 earlier in the summer.&nbsp;&nbsp;The shoulder cuts, butts, and picnics are often used in pork tamales.&nbsp;&nbsp;Pork butt and picnic primal values were $111.03 and $83.39 per cwt, respectively, in mid-December.&nbsp;&nbsp;Both were a little above the values for the same week in 2024 and well below their summer peak.&nbsp;&nbsp;



Hogs and Pigs report



USDA will release the December Hogs and Pigs report in the afternoon of December 23rd&nbsp;(today, if you’re reading this early Tuesday morning).&nbsp;&nbsp;Market analysts expect the breeding herd to be about 1 percent smaller than December 2024.&nbsp;&nbsp;The number of market hogs should be about the same as a year ago.&nbsp;&nbsp;The report will have an estimate of expected sow farrowings during the first 6 months of 2026.&nbsp;&nbsp;Analysts expect farrowings to be slightly larger than during the first half of 2025.&nbsp;&nbsp;The report will be an interesting one because producers have struggled over the last several years.&nbsp;&nbsp;Falling feed costs and this past Summer’s high prices returned some profits to producers.&nbsp;&nbsp;High fertilizer prices have made the manure much more valuable, helping the overall farm operation.&nbsp;&nbsp;But, falling prices late this year brought profits down to about break even again.&nbsp;&nbsp;



Tamale Day



My friends and I have our tamale-making day scheduled for December 21st,&nbsp;so by the time you read this, we’ll be relaxing for Christmas.&nbsp;&nbsp;All of us livestock economists at Southern Ag Today wish you the Merriest of Christmases!



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1920" height="1440" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2.jpeg" alt="" class="wp-image-43161" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2.jpeg 1920w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-1024x768.jpeg 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-768x576.jpeg 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-1536x1152.jpeg 1536w" sizes="auto, (max-width: 1920px) 100vw, 1920px" /></figure>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1920" height="1440" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-2.jpeg" alt="" class="wp-image-43162" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-2.jpeg 1920w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-2-1024x768.jpeg 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-2-768x576.jpeg 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-2-1536x1152.jpeg 1536w" sizes="auto, (max-width: 1920px) 100vw, 1920px" /></figure>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1920" height="1440" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-3.jpeg" alt="" class="wp-image-43163" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-3.jpeg 1920w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-3-1024x768.jpeg 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-3-768x576.jpeg 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-3-1536x1152.jpeg 1536w" sizes="auto, (max-width: 1920px) 100vw, 1920px" /></figure>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1920" height="1440" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-4.jpeg" alt="" class="wp-image-43164" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-4.jpeg 1920w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-4-1024x768.jpeg 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-4-768x576.jpeg 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.2-4-1536x1152.jpeg 1536w" sizes="auto, (max-width: 1920px) 100vw, 1920px" /></figure>



Anderson, David. &#8220;<a href="https://southernagtoday.org/2025/12/02/tamale-time/">Tamale Time!</a>&#8220; Southern Ag Today 5(52.2). December 23, 2025. <a href="https://southernagtoday.org/2025/12/02/tamale-time/">Permalink</a>

Tamale Time!

Contract broiler growers must make business management decisions like any other farmer. However, the scope of those decisions is very different compared to farmers growing and marketing grain, for instance. Broiler growers raising birds on contract for integrated poultry companies have contractually limited abilities to implement production management changes, and since they essentially have one “customer”, they have no chance at varying marketing strategies.&nbsp;&nbsp;Even so, some management choices may positively or negatively influence pay rates they get from the broiler company, and things that influence livability can certainly impact pounds delivered to the plant. Therefore, there may be some opportunities, like row crops or livestock farming, where a grower can choose to focus on production or pay rate improvements to potentially increase revenue. The question is whether one strategy is better than the other.&nbsp;



It should be reiterated that a contract broiler grower’s business operates under a simple gross revenue (GR) equation of pounds delivered to the company plant multiplied by the pay rate per pound. If we designate pounds as “L” and pay rate as “P”, the equation is simply L x P = GR. Under current typical competitive contract scenarios, a grower’s pay rate for any individual flock is a function of feed conversion ratio and corresponding flock cost compared to other farms finished and caught in the same week by the company. How well a farm’s cost compares to the average cost that week determines the pay rate. Given the limited abilities to positively impact either pounds or pay rate, the question is which might have a greater chance at positively influencing their GR? In&nbsp;<a href="https://southernagtoday.org/2025/07/21/whos-driving-the-broiler-revenue-bus-part-1of-3/">Part 1 of our look at Broiler Revenue</a>, we examined the variability of broiler gross revenue by looking at the two metrics of pay rate in dollars per hundred pounds delivered ($/CWT) and broiler production in pounds broken down to per square foot of housing (lbs./SF) in a nominal fashion on two similar farms across 17 flocks. From that nominal case study, we saw that although there was evidence that either could negatively or positively affect revenue, for many flocks, changes in lbs./SF seemed to override the expected effect of an increase or decrease in pay rate.



The next step looks at the same two farms and attempts to further decipher how the extent of the changes in lbs./SF and $/CWT for each flock impacts GR when compared to the farms’ own averages over the period, further trying to decide if one or the other has the most impact. By simply graphing the percent change from farm average (0%) of each of these metrics (Fig. 1a &amp;1b), we again see what suggest lbs./SF may have a slightly more significant impact on the overall GR equation for many flocks, as often its increasing or decreasing column is the largest of the two and goes in the direction of GR. The problem is that these percentages are likely not directly comparable.&nbsp;In 21 of the 34 flocks, both production and pay rate moved in the same direction as the revenue line. It remains difficult to know which made the most difference to revenue because adding the % change for both does not always equate to the corresponding percentage change in revenue. In fact, it usually doesn’t. This is likely a result of the varying competitive situation that exists for every flock.&nbsp;&nbsp;&nbsp;



Pay rates are certainly not irrelevant, and avoiding extreme discounts is important.&nbsp;&nbsp;A close look at flock #6 for Farm A and flock #5 for Farm B is warranted. Pay rate had a significant impact on these two flocks for both farms, but Farm A got the worse end of the deal. These flocks were the lowest revenue flock for each farm, as both suffered a similar catastrophic disease outbreak&nbsp;(not HPAI),&nbsp;evidenced by the drastic decrease in production. This also resulted in significant decreases in pay rates for both as they were unable to compete positively in the tournament pay system for these flocks. However, for Farm A, the pay rate decrease was greater. This could be attributed to simple chance in the tournament pay settlement structure that week, as mentioned above. But when combined with an almost equal loss in production, the result for Farm A was 17% less revenue in dollars per house than Farm B’s bad flock ($6,879 vs. $8,283). Thus, the significantly lower pay rate cost Farm A more when combined with the lost pounds. In many cases, since there is no governmental disaster support system for such losses, the farm that suffers from such a disease outbreak receives no additional revenue support from the company either. They simply suffer the loss of birds and revenue along with the company.&nbsp;



Clearly, if either farm could consistently perform better in the tournament and increase their pay rate, they would generate more gross revenue, even if pounds didn’t change.&nbsp;&nbsp;However, be it for efficiency or outdated technology issues, they may be limited in their opportunity to compete for better tournament pay. In such cases, more pounds may be their only opportunity for more revenue. To examine this a little further, we can look at which improves gross revenue more for those negative revenue flocks &#8211; improving lbs./SF or increasing $/CWT. If we were to wave a magic wand over these two farms and increase the $/CWT on the negative flocks up to the farm averages, Farm A would gain $9,715, and Farm B would gain $8,514 in revenue. However, if we were to raise lbs./SF for each of those negative flocks up to farm average, Farm A would gain $11,350, and Farm B would gain $11,685. For both farms, increasing lbs./SF on poor flocks impacts revenue more, even at decreased pay rates. In the next installment, we look at what implementing changes to pay structures across the board could do to growers’ actual revenue dollars.



Figures 1 A &amp; B: In the figures below, the 0% lines represent each farm’s average revenue, production, and pay rate across the 17 flocks. Above or below that line represents the percent change above or below farm average. 



Figure 1A



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2158" height="957" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.1-1.png" alt="" class="wp-image-43153" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.1-1.png 2158w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.1-1-1024x454.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.1-1-768x341.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.1-1-1536x681.png 1536w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.1-1-2048x908.png 2048w" sizes="auto, (max-width: 2158px) 100vw, 2158px" /></figure>



Figure 1B



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2158" height="889" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.1-2.png" alt="" class="wp-image-43154" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.1-2.png 2158w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.1-2-1024x422.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.1-2-768x316.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.1-2-1536x633.png 1536w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.52.1-2-2048x844.png 2048w" sizes="auto, (max-width: 2158px) 100vw, 2158px" /></figure>



<a href="https://southernagtoday.org/2025/07/21/whos-driving-the-broiler-revenue-bus-part-1of-3/">Find Part 1 Here</a>. 



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Brothers, Dennis. &#8220;<a href="https://southernagtoday.org/2025/12/02/broiler-revenue-drivers-part-2/">Broiler Revenue Drivers – Part 2.</a>&#8221; Southern Ag Today 5(52.1). December 22, 2025. <a href="https://southernagtoday.org/2025/12/02/broiler-revenue-drivers-part-2/">Permalink</a>

Broiler Revenue Drivers – Part 2

<h2 class="wp-block-heading">Introduction</h2>



In October 2025, the IRS announced the revised federal estate tax exemption and gift tax limit for 2026.&nbsp;&nbsp;The federal estate tax exemption will rise from $13.99 million in 2025 to $15 million in 2026.&nbsp;&nbsp;The federal gift tax exclusion will remain at $19,000 per recipient.&nbsp;&nbsp;Whether the value of a person’s estate falls above or below that limit, it is critical to develop an estate plan to assist in transitioning the farm to the next generation. Understanding the potential for estate and/or gift tax liability should be part of this planning process.



<h2 class="wp-block-heading">Federal Estate Taxes</h2>



For 2026, the federal estate tax exemption increases to $15 million for an individual and $30 million for a couple.&nbsp;&nbsp;This increase is not due to inflation but, instead, to the passage of the&nbsp;One Big Beautiful Bill Act, P.L. 119-21, July 4, 2025. This made permanent the existing estate tax exemption passed initially in 2017.



One last note on federal estate taxes: a surviving spouse has an unlimited marital deduction.&nbsp;&nbsp;This means a predeceasing spouse can transfer assets to the surviving spouse estate tax-free.&nbsp;&nbsp;Additionally, the surviving spouse can include the predeceasing spouse’s unused federal estate tax limit in their federal estate tax limit. This concept is known as portability.&nbsp;&nbsp;It is important to consult qualified estate planning attorneys and accountants to ensure that the surviving spouse satisfies the requirements for portability.



<h2 class="wp-block-heading">Federal Gift Tax Limit</h2>



Federal tax law allows each taxpayer to gift up to $19,000 per year to one individual without incurring federal gift taxes. The federal gift tax limit will remain at $19,000 in 2026. This exemption is tied to inflation but can only increase by $1,000 per year.



<h2 class="wp-block-heading">How Does This Impact Producers?</h2>



Benjamin Franklin once wrote, “In this world, nothing can be said to be certain, except death and taxes.” With that in mind, farm families concerned about an estate exceeding the federal estate tax exemption need to begin working on farm succession and estate plans to limit potential estate taxes down the road. Working with a tax advisor early on can help limit taxes and devise a tax plan to keep the farm in operation for future generations. Failure to properly plan can force surviving family members to sell family assets to pay taxes. Along with a tax advisor, producers should consider working with additional team members, such as an attorney and a financial planner, to begin developing a succession plan for their operation.



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Goeringer, Paul. &#8220;<a href="https://southernagtoday.org/2025/12/02/federal-estate-tax-and-gift-tax-limits-announced-for-2026/">Federal Estate Tax and Gift Tax Limits Announced For 2026</a>.&#8221; Southern Ag Today 5(51.5). December 19, 2025. <a href="https://southernagtoday.org/2025/12/02/federal-estate-tax-and-gift-tax-limits-announced-for-2026/">Permalink</a>

Federal Estate Tax and Gift Tax Limits Announced For 2026

In 2025, U.S. spirit exports to Canada collapsed as a direct consequence of escalating trade tensions, marking one of the sharpest declines in cross-border alcohol trade in recent history. Prior to 2025, Canada accounted for about 11% of U.S. distilled spirit exports. Between 2022 and 2024, Canadian imports exceeded $250 million annually, making Canada the second-largest market for American whiskey, bourbon, rum, and other distilled spirits (USDA, 2025). In March 2025, Canada effectively halted imports and sales of U.S. wine and spirits in retaliation for tariffs imposed by President Trump on Canadian goods. Provincial liquor boards removed American products from shelves, triggering a dramatic plunge in U.S. spirit exports (DISCUS, 2025). Canada also imposed a 25% retaliatory tariff on U.S. distilled spirits and other products in March 2025, which was lifted in September (Government of Canada, 2025). However, the impact far exceeded what would be expected from a 25% tariff alone, underscoring the severity of the trade dispute.



Figure 1 shows monthly U.S. spirit exports to Canada (in million proof liters), comparing the 2022–2024 three-year average with 2025. The data show a sharp and sustained decline in 2025 relative to historical levels. From 2022 to 2024, monthly exports typically ranged between 1.2 and 2.3 million proof liters, peaking during summer months. In stark contrast, exports in 2025 fell dramatically after February, dropping from 1.4 million proof liters in February to just 0.2 million in April, and averaging less than 0.4 million proof liters per month for the remainder of the year. Overall, 2025 marks an unprecedented contraction in Canadian spirit imports from the United States. In terms of value, U.S. spirit exports to Canada averaged over $160 million between March and September in years prior. However, exports in 2025 during the same period were only $35 million (USDA, 2025). Comparing March through September, American distilled spirit sales to Canada were down approximately almost 80% compared to the prior three-year average, underscoring the severe impact of trade restrictions.



Such a steep decline signals fundamental shifts in cross-border alcohol trade that may not be reversed by tariff removal alone. The restrictions on U.S. spirits were not merely retaliatory; they appear to have stimulated domestic production and potentially redirected Canadian consumers toward local and alternative sources. The long-term effects remain uncertain. However, it is noteworthy that imports of oak casks and barrels—essential for aging spirits—rose by 6% during this period (USDA, 2025), suggesting increased investment in Canadian distilling capacity.



Figure 1. U.S. spirit exports to Canada: 2022-2024 and 2025



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="588" height="342" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.4.jpg" alt="" class="wp-image-43144"/><figcaption class="wp-element-caption">Source: Global Agricultural Trade System (USDA, 2025). </figcaption></figure>



References



Distilled Spirits Council of the United States (DISCUS) (2025).&nbsp;Removal of U.S. Spirits from Canadian Stores in Retaliation to U.S. Trade Dispute Resulted in Sharp Sales Decline of U.S. Products, Canadian Products and Total Spirits Sales.&nbsp;<a href="https://distilledspirits.org/news/spirits-canada-analysis-removal-of-u-s-spirits-from-canadian-stores-in-retaliation-to-u-s-trade-dispute-resulted-in-sharp-sales-decline-of-u-s-products-and-total-spirits-sales/">https://distilledspirits.org/news/spirits-canada-analysis-removal-of-u-s-spirits-from-canadian-stores-in-retaliation-to-u-s-trade-dispute-resulted-in-sharp-sales-decline-of-u-s-products-and-total-spirits-sales/</a>



Government of Canada (2025).&nbsp;<a href="https://www.canada.ca/en/department-finance/programs/international-trade-finance-policy/canadas-response-us-tariffs.html">https://www.canada.ca/en/department-finance/programs/international-trade-finance-policy/canadas-response-us-tariffs.html</a>



U.S. Department of Agriculture (2025).&nbsp;Global Agricultural Trade System.&nbsp;<a href="https://apps.fas.usda.gov/gats/default.aspx">https://apps.fas.usda.gov/gats/default.aspx</a>



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Muhammad, Andrew. &#8220;<a href="https://southernagtoday.org/2025/12/02/trade-war-fallout-the-collapse-of-u-s-spirit-exports-to-canada-in-2025/">Trade War Fallout: The Collapse of U.S. Spirit Exports to Canada in 2025</a>.&#8221; Southern Ag Today 5(51.4). December 18, 2025. <a href="https://southernagtoday.org/2025/12/02/trade-war-fallout-the-collapse-of-u-s-spirit-exports-to-canada-in-2025/">Permalink</a>

Trade War Fallout: The Collapse of U.S. Spirit Exports to Canada in 2025

The world wheat situation for the 2025 crop was dominated by overall favorable growing conditions.&nbsp;&nbsp;According to the December 2025 USDA World Agricultural Supply and Demand Estimates (WASDE), world wheat production continued a long-term increasing trend, reaching a record of 837.81 million metric tons, about 31 billion bushels.&nbsp;&nbsp;In the U.S., the average wheat yield for the 2025 crop also continued a long-term increasing trend to a record high 53.3 bushels per acre, beating the old record of 52.7 bushels in 2016.&nbsp;&nbsp;



With record production and yield, what do supply and demand fundamentals in the wheat market portend for price expectations in 2026?&nbsp;&nbsp;



For the U.S., wheat planted area has levelled off over the last few years to around 45 million acres. Last winter was under the influence of an El Niño weather pattern, generally associated with cooler temperatures and above normal precipitation in the Southern Plains (2016 was an El Niño year, too). The forecast for the winter of 2026 is for La Niña conditions to be present. La Niña winters are generally warmer and drier than normal. That is not a favorable forecast for above normal yields. With little change in acreage, the U.S. wheat crop in 2026 is likely to be smaller than 2025.



U.S. wheat domestic use is little changed over the last 20 years (Figure 1). Food use is right around 950 million bushels per year, varying no more than 59 million bushels since 2005/2006.&nbsp;&nbsp;&nbsp;Wheat for feed averages about 135 million bushels per year. The high in feed use (360 million bushels) came in 2012 with the major drought in the Corn Belt.&nbsp;



Figure 1. U.S. Wheat Use



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1732" height="1136" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.3-1.png" alt="" class="wp-image-43135" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.3-1.png 1732w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.3-1-1024x672.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.3-1-768x504.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.3-1-1536x1007.png 1536w" sizes="auto, (max-width: 1732px) 100vw, 1732px" /><figcaption class="wp-element-caption">Source: USDA, Office of the Chief Economist, World Agricultural Supply and Demand Estimates</figcaption></figure>



That leaves exports. On average, exports and food use are about even over the last 20 years, but the range in exports is much more variable, from a high of 1.3 billion bushels to a low of 707 million.&nbsp;&nbsp;There is significant competition in the export market for wheat, even though the U.S. is one of the top exporters in the world (Figure 2).&nbsp;&nbsp;&nbsp;



Figure 2. World Wheat Exports



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1428" height="1310" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.3-2.png" alt="" class="wp-image-43136" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.3-2.png 1428w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.3-2-1024x939.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.3-2-768x705.png 768w" sizes="auto, (max-width: 1428px) 100vw, 1428px" /><figcaption class="wp-element-caption">Source: USDA, Office of the Chief Economist, World Agricultural Supply and Demand Estimates</figcaption></figure>



World consumption and production outside of the major exporting countries (Argentina, Australia, European Union, Russia, Ukraine, and the U.S.) shows a production deficit every year since 1990 (Figure 3). That deficit has widened from about 70 million metric tons per year in the early 1990s to more than double, averaging over 160 million metric tons the last three years. The rate of deficit is increasing by about 3 million metric tons per year, providing a need for imports to those areas.&nbsp;



Figure 3. Production and Domestic Consumption of Wheat: world less major exporters



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1562" height="908" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.3-3.png" alt="" class="wp-image-43137" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.3-3.png 1562w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.3-3-1024x595.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.3-3-768x446.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2025/12/5.51.3-3-1536x893.png 1536w" sizes="auto, (max-width: 1562px) 100vw, 1562px" /><figcaption class="wp-element-caption">Source: USDA, Foreign Agricultural Service, PSD</figcaption></figure>



The price outlook for wheat in 2026 looks better than 2025 based on what will likely be a smaller U.S. wheat crop. But the real question will be production levels globally, especially among our major export competitors. Meanwhile, consumption of wheat is strong.&nbsp;&nbsp;In 1990, the population in countries outside Argentina, Australia, the EU, Russia, Ukraine, and the U.S. represented 82% of the population total (IMF, 2025), and per capita consumption of wheat in these ‘rest of the world’ countries was 75.6 kilograms per person year. In 2025, the population share of these ‘rest of the world’ countries increased to 87% of global population, and per capita consumption increased to 85.6 kilograms per person per year. The world is hungry for wheat.



References



International Monetary Fund.&nbsp;IMF Datamapper,&nbsp;accessed December 12, 2025,&nbsp;<a href="https://www.imf.org/en/home">https://www.imf.org/en/home</a>.&nbsp;&nbsp;



USDA, Foreign Agricultural Service,&nbsp;PSD,&nbsp;accessed December 10, 2025.



USDA, Office of the Chief Economist,&nbsp;World Agricultural Supply and Demand Estimates, December 2025.&nbsp;



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Welch, Mark. &#8220;<a href="https://southernagtoday.org/2025/12/02/2026-wheat-outlook/">2026 Wheat Outlook.</a>&#8221; Southern Ag Today 5(51.3). December 17, 2025. <a href="https://southernagtoday.org/2025/12/02/2026-wheat-outlook/">Permalink</a>

2026 Wheat Outlook

Dairy product prices and milk prices usually get a demand bump leading into the holidays due to baking ingredients and cheese.&nbsp;&nbsp;That bump never materialized this Fall as rapidly rising milk supplies swamped any demand led increase in prices.&nbsp;&nbsp;



Profitable milk prices in 2024 and lower feed prices started herd expansion.&nbsp;&nbsp;Milk processing capacity has expanded, as well, supporting the increase in production.&nbsp;&nbsp;Record high cattle prices have played an important role in dairy herd expansion through cull cow revenues and much higher prices for crossbred calves from dairy cows and beef bulls, often referred to as “beefxdairy” or “beef on dairy” calves.&nbsp;&nbsp;



Starting with the dairy herd, the number of dairy cows hit 9.581 million head in September 2025.&nbsp;&nbsp;That was 228,000 head more than in September 2024 and the most since the early 1990s.&nbsp;&nbsp;While the number of dairy cows did decline by 6,000 head in October, the herd remains large.&nbsp;&nbsp;



Like the rest of livestock agriculture, productivity has been increasing for many years.&nbsp;&nbsp;Pounds of milk per cow totaled 2,033 in October, up 1.5 percent from October 2024.&nbsp;&nbsp;More milk per cow, combined with the most cows since the early 1990s, produced 19.5 billion pounds in October, a 3.7 percent increase over October 2024.&nbsp;&nbsp;



Milk and dairy product prices began to decline under the weight of record large milk production.&nbsp;&nbsp;By early December, butter prices averaged $1.60 per pound, down from $2.59 per pound last year at this time.&nbsp;&nbsp;Cheddar cheese, reported in 40 pound blocks, dropped to $160 per pound in early December compared to $1.78 last year.&nbsp;&nbsp;Non-fat dry milk prices are about 18 percent lower than last year.&nbsp;&nbsp;These product prices are used to calculate Class III and Class IV milk prices under federal milk marketing orders.&nbsp;&nbsp;Class IV milk prices declined to under $14.00 per cwt in November, with Class III prices at $17.18 per cwt.&nbsp;&nbsp;



These milk prices are very low and will lead to financial losses for many producers.&nbsp;&nbsp;Losses should lead to some supply response, reducing milk production.&nbsp;&nbsp;But, the impact of low milk prices will be offset somewhat by continued high cull cow and calf returns.&nbsp;&nbsp;Dairy cow culling has increased late this year, slightly surpassing dairy cow slaughter in the second part of 2024.



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Anderson, David. &#8220;<a href="https://southernagtoday.org/2025/12/02/milk-prices-falling-fast/">Milk Prices Falling Fast.</a>&#8221; Southern Ag Today 5(51.2). December 16, 2025. <a href="https://southernagtoday.org/2025/12/02/milk-prices-falling-fast/">Permalink</a>

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