Record cheese shipments and booming butterfat exports negate ongoing weakness in NFDM/SMP. 

Year-over-year (YOY) U.S. dairy exports (milk solids equivalent or MSE) grew 3% in August. It was the third straight monthly increase and extended some of this year’s key storylines, including: 1) butterfat exports on pace to reach an all-time high; 2) cheese exports flirting with (and often setting) volume records month after month; and 3) nonfat dry milk/skim milk powder (NFDM/SMP) lagging significantly behind prior-year volumes.

The three-month growth streak slightly lifted year-to-date (YTD) U.S. dairy export growth to +2.2% MSE. On a value basis, YOY U.S. dairy exports rose 17% in August to $831.5 million and were up 16% year to date to $6.4 billion. While value is on pace to approach the annual record, the surge in milk production from major world suppliers and the subsequent weakening of commodity pricing could temper gains in the fourth quarter.

If it feels like it’s been a while since we’ve had new dairy export numbers, it has. The government temporarily halted most data releases on Oct. 1. But with Congress passing and the president signing a bill to reopen the government on Nov. 12, data reporting is starting to catch up. August trade data was released Nov. 19. The U.S. Census Bureau expects to release September data on Dec. 1 and October numbers on Dec. 4, putting the system back on its regular schedule.

Still trending
As for August, U.S. cheese exports continue to thrive. YOY volume jumped 28% to 54,110 MT (+11,879 MT)—the most the U.S. has ever shipped in a single month. In addition, August marked the fourth straight month in which U.S. volume exceeded 50,000 MT. To put that in perspective, prior to May 2025, U.S. monthly cheese exports topped 50,000 MT a total of zero times.

Butterfat also continued its winning streak, with YOY U.S. shipments nearly tripling in August to 10,916 MT. While U.S. butter prices have been falling since July and remain competitive in export markets, EU and New Zealand prices are starting to follow the U.S. price down (although they have a way to go before reaching U.S. prices). (For a deeper dive on cheese, butterfat and NFDM/SMP, see below.)

Whey shifts
U.S. low-protein whey’s performance is a tale of three subcategories. Overall, August volume was flat (+0%, +121 MT). But within that steady YOY total, the whey subcategories continued on divergent paths. (Note: USDEC has adjusted both high- and low-protein whey volumes to account for misclassified product.)

Whey protein concentrate (HS 04041005, generally, WPC with less than 80% protein) has been tempering export growth most of the year, in large part due to the run-up in WPC80+ pricing. That run-up tightened available lower-protein (less than 80% protein) whey supplies for export, as whey was pulled into higher value categories.

YOY WPC exports plunged 23% in August (-2,946 MT), with tighter supplies and reduced demand from China, Southeast Asia, Japan, and South and Central America. YTD, the HS Code was down 20% (-21,333 MT).

On the other hand, YOY dry whey (HS 04041040) rose 9% in August led by Chinese demand, while modified whey (HS 040410085) grew 11%, with Southeast Asia driving purchasing. YTD dry whey and modified whey together were up 6% (+17,093 MT) through August. That puts overall U.S. low-protein whey shipments down 1% YTD (-4,240 MT).

High-protein whey (WPC80+, HS 350220) continues to grow, as consumers around the world demonstrate their willingness to pay for sports beverages, bars and an expanding lineup of protein-fortified foods despite premium prices. YOY WPC80+ exports jumped 12% (+749 MT) in August, led by sales to Japan, and were up 9% (+4,233 MT) YTD.

All numbers have been adjusted for leap year. Whey volumes have been adjusted to account for misclassification of certain U.S. whey shipments to China.

For more detailed information, as well as interactive charts and data, visit USDEC's Data Hub.

Cheese sails to another record high
Cheese exports climbed to yet another record high in August, soaring above prior-year levels by 28% (+11,879 MT). Notably, shipments of cheddar bolted upward, climbing to 11,011 MT (+140%, +6,416 MT), with the category accounting for a fifth of total cheese exports during the month. The dramatic increase in cheddar exports likely reflects both the activation of new, long-awaited processing capacity as well as tepid domestic foodservice demand for processed cheese. Cheddar wasn’t the only category to get a boost, as fresh cheese also saw export volumes bound upward by 47% (+4,721 MT) in August.

The increase in cheese exports is especially compelling because the rising volume has been shouldered by a broad range of destinations. In fact, with the sole exception of Canada (-18%, -325 MT), every major region we track saw a YOY gain in August. South Korea put up a particularly impressive performance for the month, with export volumes rising 84% (+3,649 MT). Australia and Japan also contributed, with cheese exports increasing 64% (+1,680 MT) and 42% (+1,455 MT), respectively. Not to be left behind, Latin America continued to demonstrate a voracious appetite for U.S. cheese, with exports to Central America and the Caribbean rising 25% (+1,700 MT) while Mexico gained 6% (+1,017 MT) over last year’s impressively high figures.

While record-high cheese exports have been one of the great success stories of the year—driven primarily by rising demand for cheese around the world—the future looks more challenging. The significant price advantage that U.S. product has carried relative to other global suppliers has melted away, as cheese prices in Europe and Oceania have declined dramatically. Milk production in these regions remains robust, and we are increasingly hearing of aggressively priced cheese showing up in key U.S. export markets. As the landscape gets ever more competitive, lower U.S. prices may be necessary to keep generating interest and booking export sales.

The butterfat boom persists
Once again in August, affordable prices positioned the U.S. as the supplier of choice for global butterfat buyers. Exports of both butter and anhydrous milkfat (AMF) have capitalized on the dynamic, rising by 190% (+5,261 MT) and 198% (+1,922 MT) compared to the same month last year. In an echo of the cheese markets, butter prices are falling in other corners of the globe. However, the U.S. butter price has also tumbled and with cream supplies poised to remain abundant for the foreseeable future, the export market will likely continue to be a critical tool for clearing U.S. butterfat in the coming weeks and months.

U.S. butterfat exports have risen to most destinations, but a few geographies stand out. Butter shipments to the Middle East and North Africa grew by 2,049 MT compared to the same month last year and marked the largest volume to the region in a single month since March 2021. Butterfat exports to Canada rose 73% (+4,328 MT) due to heftier shipments of both butter (+60%, +1,100 MT) and AMF (+277%, +313 MT). Europe also continued to import strong volumes despite high tariffs, as U.S. butterfat exports across the Atlantic reached 1,986 MT – much lower than the July figure but still immense by historical standards.

YTD, while several traditional non-buyers of U.S. butter and AMF (including the EU and Australia) have been much more active this year, North America has been the top destination for U.S. butterfat. YTD, Mexico was the No. 1 outlet for AMF, with U.S. shipments up nearly 600% to 7,585 MT through August. While an impressive jump from 2024 volume, Mexico has been a sporadic heavy buyer of U.S. AMF in the past, with U.S. exports to the country nearing 15,000 MT in 2018.

Canada is the dominant U.S. butter buyer, with YTD volume up 53% to 21,000 MT through August. When September data comes out, U.S. butter shipments to Canada will set a calendar-year record, exceeding the previous annual high of 21,364 MT in only nine months.

NFDM/SMP exports slip further
While cheese, butterfat, and several other commodity exports have provided much to celebrate this year, the mood from milk powder exports is decidedly more downbeat. U.S. exports of NFDM/SMP fell 18% year over year in August, sliding to just 56,434 MT, and resulting in the lowest volume YTD since 2019.

After an encouraging bump earlier in the year, milk powder shipments to Mexico tumbled (-21%, -7,865 MT) in August as importers worked through available stocks. Further gloom came from Southeast Asia, where volumes were down 15% (-3,386 MT) due primarily to lower demand from the Philippines (-28%, -3,826 MT) and Indonesia (-37%, -1,972 MT). Volumes were up slightly to the Dominican Republic and South Asia, but these gains were insufficient to undo the losses seen in other regions.

Indeed, milk powder supplies remain tight as U.S. skim solids are being redirected toward other, value-added ingredients. Over the first seven months of the year, U.S. production of NFDM/SMP fell 5.7%, extending the trend of declining output that has manifested in recent years as products like MPCs are increasingly favored. While stronger U.S. milk production could result in some additional condensed skim headed to dryers, it is unlikely that U.S. milk powder production will experience a dramatic resurgence in the near future, limiting the downside in price even as demand remains tepid.

Learn more about global dairy markets

• July marks second straight month of strong U.S. dairy exports

• U.S. dairy exports surge in June

• U.S. exports slip 2% in May

• U.S. dairy trade falls 5% in April

   

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The U.S. Dairy Export Council fosters collaborative industry partnerships with processors, trading companies and others to enhance global demand for U.S. dairy products and ingredients. USDEC is primarily supported by Dairy Management Inc. through the dairy farmer checkoff. How to republish this post.