By-product values for cattle and hogs have surged higher in recent weeks to the highest levels since January 2023 for cattle and January 2024 for hogs.&nbsp;&nbsp;By-products include the hides, offal, variety meats (organs), and many other items.&nbsp;&nbsp;By-product values are often referred to as the “drop credit” because it’s the value of anything that “drops” off the carcass in the packing plant.



Cattle



Steers hide, and offal values have climbed from $12.32 per cwt to $14.35 per cwt over the last two months.&nbsp;&nbsp;In the case of by-products, the values are quoted in dollars per cwt of the live steer.&nbsp;&nbsp;Hides and offal were worth about $11.50 per cwt at this time last year.&nbsp;&nbsp;



Some by-product values have more than doubled in value compared to a year ago.&nbsp;&nbsp;Honeycomb tripe and liver prices are 112 percent and 106 percent higher than last year.&nbsp;&nbsp;Cheek meat, head meat, and lips are up from 52 percent to 78 percent above a year ago.&nbsp;&nbsp;Hide values are a bit mixed.&nbsp;&nbsp;Heavy steer hides are up 10 percent, and butt branded steer hides are 33 percent higher than a year ago.&nbsp;&nbsp;Cow hides are as much as 60 percent lower than last year.&nbsp;&nbsp;



What is driving these values higher?&nbsp;&nbsp;The first reason is reduced supplies.&nbsp;&nbsp;As cattle slaughter has declined, there are reduced supplies of hides and offal.&nbsp;&nbsp;Another reason is surging exports.&nbsp;&nbsp;Variety meat exports during the first quarter of 2026 were 14.1 percent larger than during the first quarter of 2025.&nbsp;&nbsp;Cattle hide exports increased from 36.7 million metric tons to 44.7 million tons over the same period.&nbsp;&nbsp;In terms of value, variety meat exports increased 45.5 percent and hides increased 18 percent.&nbsp;&nbsp;While a lot of attention has been paid to reduced beef and veal exports this year, hides and offal exports are a bright spot in trade.



Hogs



Hog by-products values are up about 16 percent compared to a year ago and have steadily increased this year.&nbsp;&nbsp;Lard values have increased, year-over-year, by 46 percent.&nbsp;&nbsp;Choice white grease, snouts, and salivary glands have increased from 10 percent to 45 percent compared to last year.&nbsp;&nbsp;



Like beef, exports in metric tons of pork variety meat and lard have increased this year.&nbsp;&nbsp;Pork variety meat exports increased 1.8 percent in the first quarter of 2026 compared to 2025.&nbsp;&nbsp;Sausage casing and lard exports have increased by 20 percent and 47 percent, respectively, compared to 2025.&nbsp;&nbsp;Pig skin exports have declined 43 percent in volume.&nbsp;&nbsp;By value, sausage casings and lard exports have increased by 38 percent and 40 percent, while the value of variety meat and skin exports has declined by 15 percent and 31 percent, respectively.



On balance, by-product values are boosting cattle and hog values this year.  Growing exports are an important part of higher values.



<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/2026/05/6.22.2-1.png" alt="" class="wp-image-44004" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.2-1.png 1920w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.2-1-1024x768.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.2-1-768x576.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.2-1-1536x1152.png 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/2026/05/6.22.2-2.png" alt="" class="wp-image-44005" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.2-2.png 1920w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.2-2-1024x768.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.2-2-768x576.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.2-2-1536x1152.png 1536w" sizes="auto, (max-width: 1920px) 100vw, 1920px" /></figure>



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Anderson, David. &#8220;<a href="https://southernagtoday.org/2026/05/12/by-product-values-surge-higher/">By-Product Values Surge Higher</a>.&#8221; Southern Ag Today 6(22.2). May 26, 2026. <a href="https://southernagtoday.org/2026/05/12/by-product-values-surge-higher/">Permalink</a>

By-Product Values Surge Higher

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



Part 2:&nbsp;<a href="https://southernagtoday.org/2025/12/22/broiler-revenue-drivers-part-2/">https://southernagtoday.org/2025/12/22/broiler-revenue-drivers-part-2/</a>



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In early 2025, USDA’s Agricultural Marketing Service (AMS) proposed the Poultry Grower Payment Systems and Capital Investment Systems rule. If finalized, this rule would amend the Packers and Stockyards Act and require poultry companies to change how contract broiler growers are paid. The proposed changes closely reflect payment terms required by the&nbsp;<a href="https://www.justice.gov/jmd/media/1239241/dl?inline">U.S. Department of Justice</a>&nbsp;for the Wayne‑Sanderson Farms merger completed in 2022.



Under the proposal, integrators would no longer be allowed to use negative performance-based payment adjustments that reduce grower pay. All growers would instead receive a guaranteed minimum base pay rate, regardless of individual farm performance. According to USDA, the intent of the rule is to create a more “fair comparison” across contract payment systems. Companies could still offer positive performance incentives, but they would not be required to do so. Although the rule was originally scheduled to take effect on July 1, 2026,&nbsp;<a href="https://www.ams.usda.gov/content/usda-announces-proposed-delay-effective-date-grower-payment-systems-final-rule">implementation has been delayed</a>&nbsp;until at least December 31, 2027.



Given the potential implications of this rule, two prior SAT articles examined&nbsp;<a href="https://southernagtoday.org/2025/07/21/whos-driving-the-broiler-revenue-bus-part-1of-3/">whether contract pay rate or total pounds produced</a>&nbsp;has a greater impact on grower revenue, and&nbsp;<a href="https://southernagtoday.org/2025/12/22/broiler-revenue-drivers-part-2/">whether those differences are large enough</a>&nbsp;to influence management decisions. Part 3 of this series builds on that work by evaluating how the proposed changes could affect revenues for farms with different production performance levels.



Most broiler growers today are paid based on a rate per pound (hundredweight in our example) multiplied by the total live weight of birds delivered to the processor. Under the current tournament payment system, the final pay rate varies depending on each farm’s cost of production relative to other farms delivering birds in the same tournament period. Factors such as mortality, feed conversion, and average daily gain influence these costs. Farms that perform below the weekly average for these measures typically receive a lower effective pay rate, while higher-performing farms receive a higher rate.



If the proposed rule were implemented, many companies may choose to move to a flat,&nbsp;guaranteed&nbsp;base pay&nbsp;system. This base rate would probably be set close to what most companies already refer to as “average pay” or “contract base pay,” which currently serves as the starting point for pay adjustments under tournament systems.



To better understand how this shift could affect grower revenue, we compare farms with different performance profiles across 17 flocks during the same period. One of the farms, “Farm B”, was analyzed in Parts 1 and 2 of this series. It is an older, but updated, farm that performed slightly below average over the three-year period. “Farm C” is a newer farm growing similar-sized birds but achieving above-average performance over the same period. Both farms operated under a contract base pay rate of $7.45 per hundredweight (CWT) before tournament performance adjustments.



The key question: What would have happened to flock-level and overall revenues if the proposed rule had been in place during this period? To answer this, each farm’s actual tournament-based revenue was compared to a hypothetical scenario in which all birds were paid at the flat base rate of $7.45 per CWT. Revenues were analyzed on a per–square foot basis by flock, with percentage changes by flock shown in Figure 1 and 2 below.&nbsp;



As expected, a guaranteed base pay system benefits lower-performing farms while reducing revenue for higher-performing farms.&nbsp;&nbsp;Farm B would have seen a net revenue increase of 2.9 percent. This would have raised its effective pay rate from $7.23 to $7.45 per CWT, or about $0.015 per square foot. In contrast, Farm C would have experienced a revenue decline of approximately 1.4 percent, reducing its effective rate by $0.10 per CWT, from $7.55 to $7.45, or about $0.008 per square foot. Support for the proposed rule obviously varies among growers.&nbsp;



Integrators are concerned about their bottom-line production costs and the signals they send to growers.&nbsp;&nbsp;As the ruling is currently written, the option would remain for integrators to implement a guaranteed minimum pay rate by the pound that is “fair and not arbitrarily low”, allowing for positive performance incentives.&nbsp;&nbsp;However, as the industry moves forward, there could still be winners and losers, and continued questions of fairness, transparency, and the incentives in payment systems.&nbsp;



Figure 1. Farm B



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1139" height="606" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.1-1-1.png" alt="" class="wp-image-43990" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.1-1-1.png 1139w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.1-1-1-1024x545.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.1-1-1-768x409.png 768w" sizes="auto, (max-width: 1139px) 100vw, 1139px" /></figure>



Figure 2. Farm C



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1106" height="694" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.1-2-1.png" alt="" class="wp-image-43991" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.1-2-1.png 1106w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.1-2-1-1024x643.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.22.1-2-1-768x482.png 768w" sizes="auto, (max-width: 1106px) 100vw, 1106px" /></figure>



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Brothers, Dennis. &#8220;<a href="https://southernagtoday.org/2026/05/12/broiler-revenue-questions-part-3/">Broiler Revenue Questions – Part 3</a>.&#8221; Southern Ag Today 6(22.1). May 25, 2026. <a href="https://southernagtoday.org/2026/05/12/broiler-revenue-questions-part-3/">Permalink</a>

Broiler Revenue Questions – Part 3

In 2026, alternative proteins remains one of the most talked about areas of food law. For example, the year is not even at its halfway point, and there have already been multiple court rulings and numerous legislative enactments related to alternative proteins. This article will further explore those updates.&nbsp;



Background on Alternative Proteins Legislation&nbsp;



Alternative proteins is a term that is used to describe lab-grown protein products or meat substitutes, such as plant or insect-based proteins. Over the past several years, the regulation of alternative proteins has received a lot of attention at the state level. Specifically, states have passed laws requiring these products to bear certain labeling disclosures or prohibiting them from using terms that have historically been associated with “traditional” meat food products. For instance, in Alabama, cell-cultured meat is prohibited from being labeled as “meat.” However, in Oklahoma, a cell-cultured meat product may be labeled as “meat” if it also contains the disclosure “lab-grown.” There are currently 23 states with laws creating specific labeling requirements for alternative proteins.&nbsp;



Additionally, over the past few years, eight states have passed legislation that restricts the sale or manufacture of cell-cultured proteins. Three of these prohibitions are temporary, while the other 5 are permanent. Another recent trend involves prohibitions on the expenditure of state money on cell-cultured meat. To learn more about the specifics of these state laws, click&nbsp;<a href="https://nationalaglawcenter.org/state-compilations/alternative-protein-laws-state-compilation/">here</a>&nbsp;to visit NALC’s Alternative Proteins Laws State Compilation.&nbsp;



2026 Updates&nbsp;



So far, five states have passed legislation related to alternative proteins. South Dakota passed&nbsp;<a href="https://legiscan.com/SD/text/SB124/id/3385495">legislation</a>&nbsp;that would ban the “sell[ing], offer[ing] for sale, hold[ing] for sale, or distribut[ing] . . . any product containing cell-cultured protein from July 1, 2026 to June 30, 2030.&nbsp;<a href="https://legiscan.com/MS/text/HB1153/id/3395224">Mississippi</a>&nbsp;became the first state in the nation to ban cultivated dairy. Defined as a product that “intend[s] to replicate or to substitute for milk and that is derived from animal cells cultured outside of a live animal,” a cell-cultured dairy product is prohibited from being sold or offered for sale in the state of Mississippi.&nbsp;



Further, three states passed legislation that creates labeling requirements for alternative proteins. Ohio now requires that cultivated-protein food products, plant-protein food products, insect-protein food products, and fabricated-egg products must bear a “qualifying term,” such as “vegan” or “fake,” if the product’s label includes terms or language suggesting or describing it as a meat or egg product. Ohio’s bill directs state education providers to adopt a policy preventing their purchase of cell-cultured protein food products. Ohio Rev. Code&nbsp;§&nbsp;3313.8110.&nbsp;



Similar to Ohio’s labeling law, Virginia passed&nbsp;<a href="https://lis.virginia.gov/bill-details/20261/SB186/text/CHAP0108">legislation</a>&nbsp;that classifies plant-based, insect-based, fungus-based, and cultivated protein food products to be misbranded if it uses a term which “identifies the food as a meat food product or poultry product” unless it bears a “qualifying term” in close proximity. The Virginia law includes terms like “imitation,” “meatless,” “plant-based,” or “veggie” as qualifying terms.&nbsp;



Last, Idaho passed&nbsp;<a href="https://legiscan.com/ID/text/S1270/id/3375722">legislation</a>&nbsp;that required cell-cultivated animal proteins to be labeled with the phrases “lab-grown,” “cell-cultivated,” or “cell-cultured.” Further, while the Idaho law does not exclude cell-cultivated animal proteins from being labeled with traditional meat terms like “beef” or “chicken,” it does prohibit the use of specific meat cut terms like “steak” or “brisket” on cultivated meat “not derived from traditional livestock production or wild game harvest.”&nbsp;



2026 Litigation Updates&nbsp;



A number of the alternative protein laws that have been enacted in previous years have faced challenges in the courts, and so far in 2026, three notable decisions have been made.&nbsp;



Texas Cell-Cultured Protein Ban&nbsp;



First, in January, a federal court in Texas&nbsp;<a href="https://nationalaglawcenter.org/wp-content/uploads/2026/03/TX-cell-cultred-order-1-30-26.pdf">ruled</a>&nbsp;that the federal Poultry Products Inspection Act (PPIA) does not preempt Texas’ ban on cell-cultured proteins. The PPIA is the federal law that “regulates the processing, inspection, distribution, labeling, and sale of poultry products sold in interstate commerce,” and it includes an express preemption clause that prohibits states from imposing additional requirements “with respect to premises, facilities, and operations of any official establishments.” Here, the court found that Texas’ ban on cell-cultured proteins does not fall within the scope of the PPIA’s preemption clause because it is a “complete sales ban” and has no impact on food safety or behaviors that could lead to an adulterated chicken product. Thus, the court dismissed the plaintiff’s preemption claim. However, because only one of the plaintiff’s claims was dismissed, the litigation remains ongoing. To read more details about this case, click&nbsp;<a href="https://nationalaglawcenter.org/texas-food-law-litigation-updates-part-2/">here</a>for the NALC article “Texas Food Law Litigation Updates: Part 2.”&nbsp;



Texas Alternative Protein Labeling Law



Additionally, in January, a Texas federal court struck down the&nbsp;<a href="https://law.justia.com/codes/texas/health-and-safety-code/title-6/subtitle-a/chapter-431/subchapter-d/section-431-082/">Texas law</a>&nbsp;that created labeling requirements for “analogue products.” These products are defined as “a food product derived by combining processed plant products, insects, or fungus with food additives to approximate the texture, flavor, appearance, or other aesthetic qualities or the chemical characteristics of any specific type of egg, egg product, fish, meat, meat food product, poultry, or poultry product.” Here, the court found that the Texas law was an unconstitutional violation of the First Amendment. Because the “speech” at issue here was the labels used on food products, it was considered “commercial speech.” Here the court determined that this commercial speech was improperly restricted by Texas because 1) the labels were not misleading, 2) the law did not target a substantial government interest, 3) Texas did not directly advance the government interest asserted, and 4) the law did not achieve the desired goal in the least restrictive way.&nbsp;



Because the Texas law was found to violate the First Amendment, it was struck down. However, because it was determined earlier in the case that the plaintiffs did not have standing to challenge the cell-cultured product labeling laws, those are still enforceable. To learn more about this case, click&nbsp;<a href="https://nationalaglawcenter.org/texas-food-law-litigation-updates-part-1/">here</a>&nbsp;to read NALC article “Texas Food Law Litigation Updates: Part 1.”&nbsp;



Florida Cell-Cultured Meat Ban&nbsp;



Last, in March 2026, the Eleventh Circuit published an&nbsp;<a href="https://media.ca11.uscourts.gov/opinions/pub/files/202413640.pdf">opinion</a>&nbsp;that upheld Florida’s&nbsp;<a href="https://www.flsenate.gov/Laws/Statutes/2024/0500.452">ban</a>&nbsp;on the production and sale of cell-cultured meat. This ruling is noteworthy because it was one of the first times an appellate court has weighed in on the regulation of the sale of alternative proteins. However, this was not a ruling on the merits. The Eleventh Circuit determined here that the distinct court’s denial of a preliminary injunction was proper and agreed that the Florida ban was likely not preempted by the PPIA. Nevertheless, while the preliminary injunction question was at the Eleventh Circuit, the lower district court did rule to dismiss the preemption claims and that ruling is final. The litigation remains ongoing though as the district court considers a separate claim – whether Florida’s law violates the Dormant Commerce Clause. For more detail about the Eleventh Circuit’s decision, click&nbsp;<a href="https://nationalaglawcenter.org/eleventh-circuit-takes-up-floridas-ban-on-cell-cultured-meat/">here</a>&nbsp;to read NALC article “Eleventh Circuit takes up Florida’s Ban on Cell-Cultured Meat.”&nbsp;



To stay up to date on emerging news stories related to alternative proteins, click&nbsp;<a href="https://lp.constantcontactpages.com/su/PDswXKO/TheFeedSignUp">here</a>&nbsp;to subscribe to NALC’s bi-weekly newsletter, “The Feed.”&nbsp;



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Stone, Emily. &#8220;<a href="https://southernagtoday.org/2026/05/12/alternative-proteins-litigation-and-legislation-updates/">Alternative Proteins: Litigation and Legislation Updates.</a>&#8221; Southern Ag Today 6(21.5). May 22, 2026. <a href="https://southernagtoday.org/2026/05/12/alternative-proteins-litigation-and-legislation-updates/">Permalink</a>

Alternative Proteins: Litigation and Legislation Updates

In the last three years, the global rice market has been dominated by the supply side, with global production outpacing global demand and leading to increasing ending stocks and decreasing international prices. A lot has been said already about the role of India’s production and exportable surplus in previous issues (e.g.,&nbsp;<a href="https://southernagtoday.org/2025/05/15/global-market-prospects-for-u-s-long-grain-rice-for-the-upcoming-marketing-year-3/">https://southernagtoday.org/2025/05/15/global-market-prospects-for-u-s-long-grain-rice-for-the-upcoming-marketing-year-3/</a>), which is still at play in marketing year 2025/26.



The war in Iran, and particularly the situation in the Strait of Hormuz, has added more uncertainty/risk to the market through higher energy and input costs and trade disruptions. The impact of the war on input costs affects rice producers differently in different countries, depending on the level of input use and support policies. Producers in countries such as the U.S. that use energy-derived inputs (e.g., fertilizers) without domestic subsidies are more exposed than producers in countries that either use inputs less intensively and/or subsidize inputs (e.g., India). The trade disruptions also affect countries differently depending on how much they trade with countries in the Middle East. For example, the U.S.’s long-grain milled rice exports to Iraq and long-grain parboiled milled rice to Saudi Arabia, Thailand’s long-grain milled rice exports to Iraq, and India’s long-grain milled parboiled rice and basmati rice to Saudi Arabia and the United Arab Emirates have been disrupted. On the other hand, Vietnam’s and Mercosur’s rice exports are for the most part unaffected, given the low exposure to trade with the Middle East. Overall, the resulting higher production costs and marketing risks have resulted in a shift in the international price trend in the last month (Figure 1).



Figure&nbsp;1. Monthly average export price of long-grain rice from selected exporters.



<figure class="wp-block-image aligncenter size-full"><img loading="lazy" decoding="async" width="2560" height="1156" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.21.4-scaled.png" alt="" class="wp-image-43994" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.21.4-scaled.png 2560w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.21.4-1024x462.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.21.4-768x347.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.21.4-1536x694.png 1536w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.21.4-2048x925.png 2048w" sizes="auto, (max-width: 2560px) 100vw, 2560px" /></figure>



Arguably, the biggest factor looming on the global rice market is the growing concerns tied to potential El Niño drought conditions in Southern Asia later in 2026. Experts worry about potentially large reductions in production in Thailand, India, and the Philippines, which could shock the global rice market given their relevance as rice producers and traders. India and Thailand are the two largest exporters, and the Philippines is the largest importer of rice globally. If El Niño drought conditions materialize, we will most certainly see rice prices strengthening in the second half of 2026.&nbsp;&nbsp;&nbsp;&nbsp;



The U.S. long-grain rice industry is facing a major downturn. Planted acreage in 2026 is projected at about 1.65 million acres, the lowest in over 40 years and nearly 1.17 million acres below the 2010 peak. Acreage is expected to decline across all major producing states, led by Arkansas (-24% to 900,000 acres). The USDA (2026) projects that long-grain rice production will decrease by 20% relative to 2025, with total supply decreasing by 12% year-to-year (the smaller decrease in supply than production is due to expected increases in initial stocks and imports of 6% and 5%, respectively). Producer prices are expected to strengthen in 2026 to $12/cwt relative to the projected $10.4/cwt for 2025 (USDA, 2026). The projected price level will still be insufficient for rice farmers to break even in the current cost environment.



Given the global and regional situation, what can we expect for the upcoming 2026 marketing year? The answer hinges primarily on the war in Iran and the prospects of drought conditions throughout Southern Asia (El Niño can also undermine production in Mercosur due to wetter than expected conditions). Both factors can either offset or reinforce each other. If the war in Iran resolves (and trade through the Strait of Hormuz resumes and energy costs decrease) and the drought conditions in Southern Asia do not materialize, we could see downward pressure on rice prices to prevail in marketing year 2026/27. If both events evolve in the opposite direction, we could see significant price increases in the upcoming year. Many other plausible scenarios in between the two extremes above are possible, and therefore, watching the evolution of those two factors in the coming months would be crucial for rice actors in the U.S. and worldwide. Given the production disruption it could generate, it could be argued that an El Niño year would disrupt the global rice market (and strengthen rice prices) more than the war in Iran.&nbsp;&nbsp;



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References



FAO, 2026. Rice Price Update. May 2025. Available at&nbsp;&nbsp;&nbsp;<a href="https://www.fao.org/markets-and-trade/commodities/rice/fao-rice-price-update/en/">https://www.fao.org/markets-and-trade/commodities/rice/fao-rice-price-update/en/</a>.&nbsp;



USDA, 2026. USDA WASDE Report. May 2026. Available at&nbsp;<a href="https://www.usda.gov/oce/commodity/wasde">https://www.usda.gov/oce/commodity/wasde</a>.&nbsp;



U.S. Rice Producers Association. Rice Advocate. Volume 23, Issue 16.&nbsp;



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Global Market Prospects for U.S. Long-grain Rice for the Upcoming Marketing Year

The Commodity Futures Trading Commission (CFTC) publishes weekly “Commitment of Traders” (COT) data on the positions of index funds and hedge funds in agricultural futures markets (Figure 1).&nbsp;&nbsp;The changes in these speculative futures positions have near term value in explaining fluctuations in ICE cotton futures.&nbsp;&nbsp;



For roughly two years, the hedge fund (or “non-commercial” or “managed money”) speculative position has been net short, meaning there is an excess of outright short sellers over longs.&nbsp;&nbsp;This position has been associated with a low level and relatively flat pattern of ICE cotton nearby futures settlements.



In April of 2026, the hedge fund short position in ICE cotton flipped to net long (see the thin upward green spike on the right-hand side of Figure 1).&nbsp;&nbsp;This move was associated with initial buying to cover open short positions, followed by outright new buying.&nbsp;&nbsp;This move is also associated with a twenty-cent rally in nearby ICE cotton futures.



What other market implications are there from this speculative positioning?&nbsp;&nbsp;Judging from the narrowness of many of the green spikes in Figure 1, we observe that the bullish or bearish influence of hedge fund positioning can sometimes be short lived. In the present case, hedge fund buying can act like a catalyst for higher prices, perhaps influencing prices to trend higher and move more quickly than fundamentals might justify.&nbsp;&nbsp;The same can happen in reverse, i.e., liquidation of long speculative positions can contribute to volatility.&nbsp;&nbsp;This has implications for the need for pre-harvest pricing strategies.



The current price outlook for U.S. cotton in 2026 is fundamentally neutral in terms of the year-over-year comparison of ending stocks. The 2026/27 projection of ending stocks is within 500,000 bales of the 2025/26 estimate of ending stocks.&nbsp;&nbsp;But in the near term, speculators and commercials are likely waiting for the unfolding of a so-called “weather market”, i.e., the effect of early dryness and forecasted El Niño moisture on the supply outcome.&nbsp;&nbsp;The hedge funds will play their speculative role in this outcome, and likely contribute to seasonal price volatility.



Figure 1. ICE Cotton Net Position of Index funds and Hedge Funds vs. Nearby ICE Cotton Futures Settlement



January 3, 2006 Through May 12, 2026



<figure class="wp-block-image aligncenter size-full"><img loading="lazy" decoding="async" width="930" height="521" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.21.1-1.png" alt="" class="wp-image-43968" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.21.1-1.png 930w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.21.1-1-768x430.png 768w" sizes="auto, (max-width: 930px) 100vw, 930px" /></figure>



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Robinson, John. &#8220;<a href="https://southernagtoday.org/2026/05/12/speculative-long-positioning-coincides-with-rising-cotton-prices/">Speculative Long Positioning Coincides with Rising Cotton Prices.</a>&#8221; Southern Ag Today 6(21.3). May 20, 2026. <a href="https://sat-wp.afpc.tamu.edu/?p=43967">Permalink</a>

Speculative Long Positioning Coincides with Rising Cotton Prices

U.S. beef exports to China have been an ever-evolving story in recent years. As shown on the chart above, exports were effectively zero until 2017 when China removed a ban on U.S. beef that dated back to 2003. Exports surged in 2021 and 2022, briefly making China a top three destination alongside Japan and South Korea. Since early 2025, beef exports to China have plummeted to very low levels amid broader trade challenges. For the first three months of 2026, beef exports to China totaled just 5.3 million pounds, a 95 percent decline from a year ago.&nbsp;



The lower exports over the past year have been driven by the lack of U.S. beef facilities registrations that are required for all food manufacturers who export into China. Over 400 U.S. beef plants lost the ability to export into China after registrations expired and were not renewed over the past year. President Trump’s summit with Chinese leader Xi Jinping in China last week led to hope from the beef industry that these expired registrations would be renewed and that larger exports to China could resume.&nbsp;



On Friday, the U.S. Meat Export Federation reported registration extensions have been granted to 425 overdue beef establishments, and an additional 77 establishments have been added, while 38 establishments remain suspended. This is good news for U.S. beef exports amid challenging export dynamics. Tight supplies of U.S. beef and high domestic prices have been a headwind to beef exports. Those headwinds remain with the renewed registrations, but China is a key market.&nbsp;



It is also worth mentioning U.S. beef exports to Hong Kong have increased over the past year, while exports to China declined. It is helpful to combine exports to both countries when looking at overall trends. While Hong Kong has offset some of the decline in exports to mainland China, combined exports to China and Hong Kong remain well below the levels seen during 2021–2024, when mainland China was a much larger buyer.



<figure class="wp-block-image aligncenter size-full is-resized"><img loading="lazy" decoding="async" width="468" height="304" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2026/05/6.21.2.png" alt="" class="wp-image-43976" style="aspect-ratio:1.539510184671475;width:453px;height:auto"/></figure>



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Maples, Josh. &#8220;<a href="https://southernagtoday.org/2026/05/12/u-s-beef-exports-to-china-bottleneck/">U.S. Beef Exports to China Bottleneck.</a>&#8221; Southern Ag Today 6(21.2). May 19, 2026. <a href="https://southernagtoday.org/2026/05/12/u-s-beef-exports-to-china-bottleneck/">Permalink</a>

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