Consumers around the world want more protein in every bite, but the dairy industry is struggling to keep up. Athletes and older adults have long used shakes and drinks mixed with whey protein, a powder made from a byproduct of cheese production, to build or maintain muscle mass. Recently, food companies have begun adding it to almost everything, from cereal, chips, bagels and tortillas to Starbucks drinks, as they try to meet growing consumer demand.
The average U.S. supermarket now carries 38,708 products that advertise their protein content, according to research firm NielsenIQ. But the rush to satisfy ingredient-focused consumers is creating a shortage of high-quality whey protein and pushing prices to new records.
“Demand is very firm and seemingly outpacing supply for right now,” Kathleen Wolfley, vice president of Ever.Ag Insights, a data provider and consulting company for the agriculture industry, told AP.
Exports to China plunge
Wholesale prices for whey protein began rising in 2024, and the pace accelerated last year and so far this year, Wolfley said. Whey with 80% protein, the type most often used by food manufacturers and supplement companies, is trading on the U.S. dairy commodities market at more than $13 per half-kilogram, up 250% from a year earlier.
Whey protein isolate, a more refined version that contains at least 90% protein, is 150% more expensive than last year. That is raising prices for consumers. A similar picture is emerging in Europe. In late May, whey protein reached 26,450 euros per metric ton, more than double its price a year earlier.
U.S. milk consumption has declined for decades as Americans shifted to drinks such as soda. But the appetite for cheese has remained strong. A nation of cheese eaters produced large amounts of whey protein, and some of the surplus was typically exported to China and other countries.
Now, domestic demand for high-protein snacks and meals is keeping more whey in the United States for use as a food ingredient or dietary supplement. Exports of 80% whey protein to China fell 47% from January through April compared with the same period last year.
“There simply isn’t enough product for the U.S. customer, and exports have therefore been paused as much as possible,” Jasper Endlich, a Vesper dairy analyst, told AP. China is now seeking more whey protein from Europe, which is also facing a shortage due to the drop in U.S. exports.
Use of GLP-1 weight-loss drugs is one factor accelerating demand for whey protein. Obesity drugs such as Wegovy and Zepbound are designed to suppress users’ appetites. Experts say the food those users do eat needs to be rich in nutrients. People using the injections are often advised to consume enough protein to feel full for longer and preserve muscle mass while losing weight.
About 6% of patients with obesity and diabetes in the United States, and 2% of patients with obesity and diabetes worldwide, used weight-loss drugs last year. Some estimates suggest 12% of the U.S. adult population uses the drugs. Food and nutrition companies are creating protein-enriched products to appeal to those consumers, as well as to people who believe drinking protein shakes instead of meals will help them lose weight.
Companies try to catch up
Tight supply and higher costs have led some manufacturers to raise the prices consumers pay for protein powder or protein-enriched products. Now Foods, an Illinois-based health food and supplement maker, said containers of whey protein powder are consistently the best-selling product in its sports nutrition category. But after two years of paying more for raw materials, the company raised prices for its whey products earlier this year.
Bryan Morin, the company’s sports brand manager, said Now Foods does not expect additional price increases on whey powder this year. It is trying to absorb some of the higher costs by reducing discounts, and is considering expanding its product portfolio to include items made with milk protein concentrate, a cheaper powder that contains less whey.
Manufacturers are investing in whey protein production, which should eventually improve supply. But relief will not be immediate. Glanbia, an Irish nutrition company, announced in November that it would increase whey protein production in New Mexico, but the additional capacity will not be available before 2027. In February, Canadian dairy company Agropur announced plans to expand whey production at plants in Quebec, Nova Scotia, South Dakota and Wisconsin.
In the meantime, high prices could cause some consumers to stop buying whey powders, especially as grocery prices rise more broadly. A drop in retail demand could ease the shortage at the wholesale level.
“The supply-demand dynamics could start to improve, but I don’t know if that’s a tomorrow dynamic or within a year. Some of these things are going to take time,” Wolfley said.