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U.S. consumer inflation eases to lowest in more than four years... The U.S. consumer price index (CPI) rose 0.2% from the previous month in April but eased to a 2.3% annual increase – the lowest since February 2021. Core inflation, minus food and energy prices also increased 0.2% from March and held at 2.8% above year-ago levels.
Food prices declined 0.1% from March to stand 2.8% above last year. Food at home (grocery) prices declined 0.4% on a monthly basis and increased 2.0% annually. Food away from home (restaurant) prices increased 0.4% from March and 3.9% annually in April.
Egg prices averaged $5.122 per dozen in April, down 18% from March – the largest monthly decline in the egg price index since 1984 – though still 49% higher than last year. The monthly decline in egg prices came even during the Easter holiday, traditionally a strong period for egg demand. USDA raised its egg price forecast to $4.063 this month on supportive consumer demand after the Easter holiday season. Egg prices are expected to fall sharply to an average of $2.16 in 2026 as the layer flock rebuilds from the highly pathogenic avian influenza outbreak.
USDA raises cash cattle, hog prices amid S&D adjustments... Monday’s Supply & Demand Report noted: Effective May 11, 2025, USDA announced the suspension of live cattle, horse and bison imports from Mexico due to recent detections of New World Screwworm (NWS) in southern Mexico. Forecasts in this report reflect this suspension and, in the absence of an official timeline for reopening U.S. ports of entry for livestock, it is assumed these restrictions will remain in place indefinitely. Subsequent forecasts will reflect officially announced changes in policy when they occur.
Cattle/beef: USDA lowered its 2025 beef production forecast as higher dressed weights more than offset reduced steer and heifer slaughter due to the suspension of cattle imports from Mexico. Beef production is now forecast to fall 2.1% from year-ago. USDA cut beef exports for 2025 as higher-than-expected official reported trade data for the first quarter is more than offset by tighter available supplies for the second half of the year. Those changes led to USDA jumping the projected average cash price for this year by $9.00 to a record $214.51 – up $27.39 from 2024.
For 2026, USDA projects another 4.8% decline in beef production and another 6.3% decline in exports. The initial price forecast is a record $223.00.
Hogs/pork: USDA lowered its 2025 pork production forecast as a slower rate of slaughter expected for the second half of the year although it is slightly offset by increased production in the second quarter. Pork production is still expected to rise 0.7% this year. USDA raised pork exports amid higher first-quarter results, with improved export demand carried into the second half of the year. Pork exports are still expected to decline 0.8% this year. USDA raised its cash hog price forecast by $4.65 from last month to $65.65, up $2.24 from last year.
For 2026, USDA projects another 1.3% rise in pork production and a 1.2% increase in exports. The initial 2026 price projection is $64.00.
Mexico takes steps to control spread of screwworm... Mexico will tighten the flow of cattle from the south of the country to limit the potential spread of New World screwworm, Mexican Agriculture Minister Julio Berdegue said. He ruled out closing Mexico’s southern border to cattle from Central America, but acknowledged it will take a long time to eradicate the pest.
The clampdown from Mexico is in response to the U.S. suspension of cattle imports announced Sunday. Berdegue said on Tuesday Mexico was complying “100%” with U.S. demands.
Brazil inks deal to ship DDGs to China... Brazil signed protocols with China on Tuesday to allow exports of Distillers dried grains (DDGs). The deal, outlined in a Brazilian government document viewed by Reuters, underscores Brazil’s push to strengthen agricultural ties with China as President Luiz Inácio Lula da Silva visits the country, and as rising domestic DDG production fuels the search for alternative markets.
In 2024, the U.S. was nearly the sole supplier of DDGs to China, with 99.6% of imports by volume valued at $65.7 million, according to Chinese customs data.
‘Tailwinds needed: An early look at 2026 farm income’... U.S. farm income is poised for a sharp decline in 2026 as ad hoc federal support fades and underlying economic pressures reemerge. Insights from Terrain and its Executive Head, Dr. John Newton, warn the gains in 2025 are largely superficial, with row crop producers potentially facing some of the steepest profit declines in decades. Link to report.
Key Insights
- Short-lived relief: U.S. net farm income is projected to hit $180 billion in 2025 — up 26% — but largely due to over $30 billion in emergency government support. Terrain’s Newton warns: “These economic margins are only a bridge until a new five-year farm bill can be authorized by Congress.”
- 2026 reversal ahead: Without new policy or market tailwinds, current projections are for net farm income to plunge to $139 billion — down 23%, or $41 billion compared to 2025. “If realized (and there is a lot of runway in front of us) this would be the third-largest year-over-year in over 30 years.”
- Row crops in the crosshairs pricewise: According to FAPRI’s most recent baseline, the prices received for major field crops are projected to fall or remain flat again in 2026. The season-average corn price is projected at $4.19 per bushel, soybeans at $10.06 per bushel, wheat at $5.33 per bushel and cotton at less than 70¢ per pound.
- Cost pressure mounts: FAPRI projects input costs to rise to nearly $460 billion in 2026, nearly $90 billion higher than 2021 levels. “Then, as further evidence of the stickiness, FAPRI projects inputs such as chemical costs, energy costs, and labor costs will push total expenses up by $37 billion over the next decade to nearly $490 billion by 2034.”
Masked weakness: Net farm income (excluding government aid) has declined $43 billion since 2022, but due to a major increase in government payments the farm economy appears strong in 2025.
Newton cautions that existing farm bill programs may not be sufficient for the volatility ahead. Terrain emphasizes operational adjustments and enhanced risk management: “Seeking ways to adjust your fixed or operating costs such as managing machinery expenses can help provide breathing room.”
Says Newton: “Like college football, this is a way-too-early projection of farm income in 2026. However, it recognizes that the current headwinds facing crop producers are showing no signs of letting up, nor are there any tailwinds clearly visible on the horizon.”
Bottom line: Unless commodity prices rebound or Congress passes a more robust farm safety net, the 2026 outlook signals a financial reckoning — especially for grain and fiber producers. As Newton sums it up: “These financial programs are only a temporary fix... we could be looking at a tale of two farm economies favoring cattle over crops.”
USDA launches general and continuous CRP signups amid statutory cap constraints... USDA announced on May 12 the opening of both general and continuous signups for the Conservation Reserve Program (CRP), with enrollment windows running through June 6. However, officials warned that available space in the program is limited, with just 1.8 million acres left before hitting the 27-million-acre statutory cap. USDA is expected to announce a separate signup period for Grassland CRP, which already accounts for 9.7 million acres — more than either general (7.8 million acres) or continuous (8.4 million acres) CRP enrollments.
With total CRP acreage nearing its legal maximum and high interest across all three signup types, USDA faces a logistical and policy balancing act. Past patterns suggest many enrolled acres will likely come from expiring contracts, while space for new entrants will remain scarce.
Court weighs legality of Trump’s ‘Liberation Day’ tariffs... The U.S. Court of International Trade today began hearing a pivotal legal challenge to President Trump’s April 2025 “Liberation Day” tariffs, which imposed a 10% blanket duty on all imports, with higher rates for countries with trade surpluses with the United States.
Trump used the International Emergency Economic Powers Act (IEEPA) to justify the tariffs by declaring trade deficits a national emergency. Plaintiffs argue this statute doesn’t authorize broad-based tariffs and that no genuine emergency exists. Tariff authority lies with Congress, not the executive, they claim.
The Trump team contends IEEPA provides ample authority to act in economic emergencies and that the plaintiffs have not proven immediate harm warranting a block on the tariffs.
A swift ruling on the injunction is possible, but the broader constitutional decision may take months. Legal scholars suggest this case could redefine how — and whether — a president can weaponize economic emergency powers for tariff action.