How high can whey prices go?

KANSAS CITY –Whey, once a cheesemaking byproduct that was discarded into wastewater, has been on a historic three-year run, with prices soaring to unprecedented levels.

Much of the rally has been driven by consumers’ growing appetite for convenient protein.

“Whey protein is not something you just see at GNC or in the sports nutrition aisle now,” said Joshua White, vice president of dairy ingredients at T.C. Jacoby & Co. “It can be found in nearly every aisle of the grocery store.”

Amid the surge in demand, expanding cheese production has given processors a larger whey stream to work with, while investments in filtration and processing capacity have scaled the industry’s ability to extract more value from that stream. Whey can be processed into products, including whey protein concentrate (WPC) 34% or further concentrated into higher-protein WPC 80% and whey protein isolate (WPI). As values for those higher-protein products have risen, processors have at times prioritized their production, reducing WPC 34% output and contributing to tight supplies across the whey protein complex.

After climbing almost continuously since mid-2023, whey protein prices are beginning to test what buyers are willing to pay. White estimated spot WPC 80% surged from about $2.50 per lb in mid-2023 to $13.50 per lb today.

The underlying demand behind the numbers is expected to remain strong. Custom Market Insights, a market researcher, projected the global whey protein market will grow from $13.52 billion in 2025 to $26.04 billion by 2034, a compound annual growth rate of 7.56%. The report identified ready-to-drink beverages and functional foods as major growth areas.

GLP-1 weight-loss drugs also have accelerated the trend, but White cautioned against giving them all the credit. Health and wellness demand extends beyond GLP-1 users and across international markets. European whey protein prices have surpassed those in the United States, and export interest has increased.

However, at current levels, some WPC buyers have resisted adding coverage, with recent reports of customers staying on the sidelines in hopes of securing better values.

White characterized the hesitancy to commit as a possible sign the market is moving beyond its “parabolic” phase and into a more mature period. Supplies are still tight, but high prices are beginning to reshape who can justify whey.

WPC 80% once served several tiers of demand, from calf milk replacer to sports nutrition and functional foods. Rising prices have pushed lower value, such as its use in feed, out of the market, while health and wellness customers have been willing to pay a premium.

Now, some food manufacturers may be next to reconsider. Those seeking higher protein content may have more flexibility than customers that specifically need whey’s nutritional or functional characteristics, making milk protein concentrate, casein and caseinates increasingly attractive alternatives in some formulations.

Photo: USDA

But not all WPC alternatives are created equal.

“They don’t all perform the same and don’t share the same nutritional profile,” White said.

Still, substantially cheaper milk proteins could offer reformulation opportunities where whey is desirable rather than indispensable.

Buying strategy, White said, depends largely on how much flexibility a customer has. Those who are reliant on whey may be better served maintaining coverage rather than betting on a substantial price break while supplies are still tight. Buyers with more flexibility can afford to wait, adding spot loads opportunistically if better values emerge later in the year.

Heading into 2027, food manufacturers may have to reset their expectations for what whey will cost.

“If you budgeted $5 (per lb) or $6 (per lb) whey protein last year, you may have to budget $10 or $12 whey protein this year,” White said.

It remains to be seen how much of those higher ingredient costs manufacturers can absorb before passing along to consumers, and how that could shape demand in the year ahead.

White is watching a couple signals that may offer clues to end users as they build buying strategies for the remainder of this year and into next year. One is promotional activity and price reductions in online sports nutrition, where consumers are particularly price sensitive. The other is whether food manufacturers increase reformulation activity toward milk proteins.

He also recommended that buyers keep a close eye on the spot market. If contracted customers begin taking less than forecast, processors may find themselves with extra loads to sell. The residual loads often become the transactions that move dairy protein prices.

For now, the whey complex remains tight, and the broader demand story appears intact. The key will be how buyers and consumers respond as lofty prices work their way through the market, and whether that response is enough to bring demand closer in line with available supplies.