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America’s obsession with “maximizing protein” is putting stress on the dairy industry.
Whey protein concentrate, once considered an inexpensive byproduct of the cheese-making process, has now become one of the most sought-after ingredients in the American diet. The surge is causing shortages across the country, with some suppliers sold out for the second half of the year, according to a late April report from the Department of Agriculture. U.S. monthly whey protein inventories have been reduced by about half since 2023.
“The market remains extremely tight, with little product availability, and purchasers continue to report difficulty securing supply,” the USDA said in a June 25 report. As a result, the price of whey protein isolate has reached as much as $14 per pound.
While the use of GLP-1 weight loss drugs is booming and is set to expand to more Americans with Medicare coverage, protein consumption is on the rise, at least in the short term. These drugs require increased protein intake to avoid muscle loss. And the continued expansion of weight loss drug coverage comes at a time when protein is already in high demand among Americans in many consumable forms.
“This is a multi-dimensional supply exercise,” said Phil Prado, dairy analyst at Ever.Ag. “Supply is growing, but it’s difficult to grow as fast as demand,” he said.
Because whey is a byproduct of cheese production, the dairy industry cannot build whey plants on its own and has limited processing capacity to convert liquid whey into powder. Most existing facilities were built with steady, predictable growth in mind, rather than rapid growth. The additional specialized filtration infrastructure required for this process can take years to obtain approval.
“We have an abundance of milk in the United States right now. Milk has been growing steadily for over a year and a half. The problem is not milk coming from farms,” Proud said.
According to the International Food Information Council, about 70% of Americans now say they are trying to eat more protein, up from 59% four years ago.
“Protein is riding a wave of popularity following trends in weight management, fitness, and healthy aging,” Wendy Reinhard Kapsak, president and CEO of IFIC, said in a press release. “Our data shows that it is the most sought-after nutrient, the most commonly followed dietary pattern, and the most important characteristic consumers use to define ‘healthy’ foods.”
Chipotle recently launched a “High Protein Menu”. Starbucks added high-protein drinks in 2025, and Sweetgreen has been offering “protein plates” since 2023.
Protein can now be found on shelves in nearly every food category at grocery stores. They have chips, waffles, pancakes, ice cream, ready-to-drink coffee and other beverages. “The way food companies access protein will evolve,” Prado said, citing Doritos Protein as an example, which uses casein as its protein ingredient.
The “Protein Max” trend on TikTok and Instagram encourages people to maximize their daily protein intake, often advising people to eat 1 gram per pound of body weight while cutting out carbohydrates to lose weight. This niche fitness hack helped reshape the way Americans eat nationwide.
However, users of GLP-1 weight loss drugs figure prominently within these broader trends to support protein needs. Healthcare providers are increasingly recommending higher protein intake to maintain lean muscle mass during weight loss, and whey protein is often the preferred choice due to its amino acid profile and digestibility.
Four major medical societies jointly published nutritional guidelines for patients on the GLP-1 receptor, advising patients to eat more protein to avoid muscle weakness, although exercise is also important.
“When you take GLP-1 and you have responders, you see a decrease in the desire to eat and drink,” said guideline co-author Dr. Fatima Cody Stanford, a bariatric medicine physician at Massachusetts General Hospital. “When patients are taking GLP-1, they need to increase their protein intake because they see a decline in lean muscle strength,” she says. This has contributed to the emergence of protein in categories such as beverages. “People may find it might be easier to drink protein,” she says.
David Steven Jacoby, managing partner and supply chain and operations management practice leader at Boston Strategies, said the structural capacity gap in the protein supply chain is because suppliers need to see “bankable demand,” or signed contracts, before committing to financing, typically loans, to build new infrastructure. In an email to CNBC, he explained that these structural capacity shortages can occur during periods of high demand when it is difficult for suppliers to set new contract terms.
Mr. Jacoby estimates that the cost to renovate a single factory is in the $15 million range, but that a major industrial expansion would require hundreds of millions of dollars. In the current environment, there are two options for increasing production capacity in the protein supply chain. The largest companies can make large investments in the market to increase supply, believing that this will also raise the barrier to entry for potential competitors. But local processors can also take what he calls calculated risks to build their ability to capture market share from dairy cooperatives.
In Jacoby’s view, Dairy Farmers of America, Saputo, Glanbia, Agropur and Leprino are the most likely companies to move first given their size. “It also makes sense for smaller companies like Foremost Farms and Hilmar Cheese to add capacity with the goal of taking market share away from cooperatives,” Jacoby wrote.
Last October, U.S. dairy producers announced plans to significantly expand U.S. milk production over the next five years, adding $11 billion in new manufacturing capacity in 19 states, according to the International Dairy Products Association.
Prado said the current demand-driven whey protein price hikes should ease. “High prices cure high prices,” he said. But he added: “I don’t think we’ll see a crash. We’ll probably see a moderation rather than a crash, but it could still take a few years.”
