America can’t get enough of protein. The dairy industry can’t keep up

America’s obsession with “maximizing protein” is straining the dairy industry.

Once considered an inexpensive byproduct of the cheese-making process, whey protein concentrate has become one of the most sought-after ingredients in the American diet. This increase is causing shortages across the country, with some suppliers running out in the second half of the year. a USDA report From the end of April. US whey protein month-end stocks dropped by about half Since 2023.

“The market remains extremely tight, product is largely unavailable, and buyers continue to report difficulty securing supply,” the USDA said in a June 25 report. As a result, whey protein isolate prices have reached ever-higher levels. $14 per pound.

With the explosion in the use of GLP-1 weight-loss drugs (which are poised to spread to many more Americans due to Medicare coverage), protein consumption is on the rise, at least in the short term. The use of these drugs requires users to increase protein consumption to prevent muscle loss. The continued expansion of weight-loss drugs comes at a time when protein in many consumable forms is already in high demand among Americans.

“This is a multi-dimensional supply effort,” said Ever.Ag dairy analyst Phil Plourd. “Supply has increased, but it is difficult to grow as fast as demand,” he said.

Because whey is a byproduct of cheesemaking, the dairy industry cannot build a whey plant on its own and has limited processing capacity to convert liquid whey into powder. Most existing facilities were built with the assumption of steady, predictable growth rather than a sharp increase. The additional specialized filtering infrastructure required for the process can take years to gain approval.

“We have plenty of milk in the U.S. right now. We’ve had decent milk growth for over a year and a half. The problem is not the milk coming from the farm,” Ploud said.

according to International Food Information CouncilNearly 70% of Americans say they are now trying to consume more protein; this rate was 59% four years ago.

“Protein is riding a wave of popularity fueled by weight management, fitness and healthy aging trends,” IFIC president and CEO Wendy Reinhardt Kapsak said in a press release. “Our data shows that it is the most sought-after nutrient, the most followed dietary pattern, and the most important attribute consumers use to define ‘healthy’ food.”

Chipotle recently released a “High Protein Menu.” Starbucks added a high-protein drink in 2025. Sweetgreen, “protein plates” Since 2023.

Protein is now found in almost every food category on grocery shelves. Chips, waffles, pancakes, ice cream, ready-to-drink coffee and other beverages are available. “We’re going to see an evolution in how food companies access protein,” said Plourd, pointing to Doritos Protein, which uses casein as its protein ingredient.

TikTok and Instagram’s “protein maximizing” trend is pushing people to maximize their daily protein intake; When cutting carbs to stay lean, he generally recommends one gram per kilogram of body weight. The niche fitness gimmick has contributed to a nationwide reshaping of the way Americans eat.

But GLP-1 weight loss drug users play a prominent role in these broader trends supporting protein demand. Healthcare providers are increasingly recommending increased protein intake to preserve lean muscle mass during weight loss, and whey protein is often the preferred option due to its amino acid profile and digestibility.

Four major medical societies published a publication common set of nutritional rules For patients with GLP-1 receptors, patients are advised to consume more protein to help prevent muscle loss, but exercise is also critical.

D., co-author of the guidelines and an obesity medicine physician scientist at Massachusetts General Hospital. “When you use GLP-1 and have the intervention, you see a decrease in the desire to eat or drink,” Fatima Cody Stanford said. “We see a decrease in lean muscle when patients are taking GLP-1, so we need to increase protein,” he said. This has contributed to the emergence of protein in categories such as beverages. “People may find it may be easier to drink their protein,” he said.

According to David Steven Jacoby, managing partner and supply chain and operations management practice leader at Boston Strategies, the lack of structural capacity in the protein supply chain is a function where suppliers must ensure “bankable demand” (signed contracts) before committing to financing, often loans, to build new infrastructure. At a time when demand is rising, these structural capacity shortfalls can arise where it is difficult for suppliers to establish new contract terms, he told CNBC via email.

Jacoby estimated that the cost of renovating a single facility was around $15 million, while large-scale industrial expansion would require hundreds of millions of dollars. There are two options for increasing the capacity of the protein supply chain in the current environment. The largest players may invest heavily in the market to increase supply, with the idea that this will also increase barriers to entry for potential competitors. But regional processors can also take what he calls calculated risk to build capacity to gain market share from dairy cooperatives.

In Jacoby’s view, Dairy Farmers of America, Saputo, Glanbia, Agropur and Leprino are the companies most likely to be first movers given their scale. “It would also make sense for smaller players like Foremost Farms or Hilmar Cheese to expand their capacity to capture market share from the cooperatives,” Jacoby wrote.

U.S. dairy producers announced $11 billion in new production capacity in 19 states last October. International Dairy AssociationIt plans to significantly increase U.S. milk production over the next five years.

Price increases based on current demand for whey protein should be moderate, Plourd said. “High prices cure high prices,” he said. But he added: “I don’t see it collapsing. I think we’ll see moderation rather than a collapse, but it could still take a few years.”