All major product categories post export gains except for NFDM/SMP.

U.S. dairy exports started off the second half of the year with a bang as shipments in July soared 7% (+14,144 MT) year over year in milk solids equivalents (MSE) terms. Though down on an average daily basis from June’s pent-up-demand-infused numbers, July’s result was nevertheless very strong by historical standards, boasting the second-largest volume moved in any month since August 2022.

Notably, nearly every product category saw volumes rise during the month. Cheese continued its tear, blowing through prior records to hit a new all-time high of 52,105 MT (+29%, +11,818 MT) exported during the month. Year-to-date cheese exports have raced past prior-year levels (+14%, +42,663 MT) and appear well on track to handily deliver another annual record in 2025.

While all types of cheeses experienced gains, cheddar exports surged by 143% (+6,308 MT) as rising production combined with strong appetite from international buyers led to gains in nearly every key geography. Seemingly insatiable demand for cheese in Central America and the Caribbean (+49%, +2,878 MT), South Korea (+35%, +1,551 MT), and Japan (+105%, +2,612 MT) played the largest role in driving total cheese exports dramatically upward in July.

Cheese wasn’t the only product to post a strong July as exports of butterfat continued to boom, driven by affordability and availability compared to alternative global suppliers. Butter exports soared to 8,395 MT in July (+206%, +5,655 MT), the largest monthly volume shipped in more than a decade. A record large 1,599 MT of butter was sent to Australia during the month, more than 2.5 times greater than the prior record set in June. Butter exports also jumped to the Middle East and North Africa, reaching the strongest volume seen since late 2022.

U.S. butterfat also moved abroad in the form of anhydrous milkfat (AMF), with exports of AMF rising 91% (+1,810 MT) year over year. Although the gap has narrowed in recent weeks, U.S. butterfat continues to boast a significant price advantage, suggesting that strong exports should persist in the coming months.

Low-protein whey products built on June’s strong performance, rising 9% (+4,054 MT) year over year (YOY). Stronger exports to Mexico (+109%, +3,430 MT) and Southeast Asia (+25%, +2,275 MT) contributed to the gain, though volumes moving across the northern border to Canada slipped by 27% (-728 MT) and sales to China were virtually flat—although that is still a massive improvement compared to the tariff-induced collapse in April and May.

U.S. exports of high-protein whey improved by 9% (+522 MT) despite a 51% decrease in exports to China (-853 MT), after adjusting for misallocated product. However, an increase in Chinese appetite for U.S. lactose (+29%, +2,223 MT) underpinned a 9% (+3,092 MT) increase in total U.S. lactose exports.

The glaring exception to an otherwise overwhelmingly positive month of trade data was nonfat dry milk and skim milk powder (NFDM/SMP). U.S. exports of NFDM/SMP sank once more in July (-16%, -11,103 MT) as a dearth of domestically available product continued to limit export possibilities. Even though exports to Mexico rose by a modest 1% (+455 MT) in July, a 28% (-7,108 MT) drop in powder exports to Southeast Asia weighed heavily on the total figure.

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.

Latin America remains a reliable partner
Better-than-expected economic performance across Latin America and limited disruption from trade policy disputes have continued to galvanize the region’s role as a key destination for U.S. dairy exports.

U.S. dairy shipments to Mexico rose 5% (+2,695 MT MSE) in July, emboldened by stronger shipments of low-protein whey (+109%, +3,430 MT). An increased demand in milk powder delivered modestly higher exports of NFDM/SMP south of the border, while cheese eked out a 1% (+153 MT) increase. While the YOY gain in cheese was small, total July volume (17,626 MT) was the second strongest month of cheese shipments ever recorded to Mexico. Despite concerns at the start of the year, moderating inflation, a stronger peso, and a resilient tourism sector appear to be boosting demand for U.S. dairy products across the country.

Not to be left behind, Central America and the Caribbean are also providing a home for U.S. dairy products, as U.S. exports to the region jumped 34% (+5,230 MT MSE) in July. Cheese exports surged by 49% (+2,878 MT) with cheddar boasting a 260% (+1,281 MT) increase as demand across the region continued to climb. Gains were spread geographically, with cheese exports rising to Panama (+95%, +1,025 MT), Guatemala (+34%, +478 MT), and the Dominican Republic (+13%, +146 MT).

Exports to South America were mixed across products and geographies, but total U.S. dairy shipments to the region still grew 10% (+1,055 MT MSE) in July. Cheese rose 12% (+234 MT) due to stronger demand from Chile (+46%, +390 MT). After an encouraging increase in June, exports of NFDM/SMP stumbled to Colombia (-30%, -587 MT), weighing heavily on the regional figure. Exports of WPC80+ to Brazil slipped 12% (-92 MT) in July, but demand for U.S. lactose doubled (+101%, +445 MT).

Though economic and trade policy risks remain, geographic proximity, well-established commercial relationships, and—most importantly—growing demand are likely to keep Latin America central to the success of U.S. dairy exports in the coming months and years.

U.S. overcoming access hurdles in Europe
U.S. exports to Europe unexpectedly boomed in July, with shipments to the EU and UK climbing a combined 357% (+5,006 MT) on a milk solids basis and YTD shipments jumping an impressive 60% (+7,910 MT MSE). Given the steep tariffs and plentiful non-tariff barriers on exports to Europe, it is rare for the U.S. to ship significant volumes of dairy products to the EU or the UK. So why have we seen a change this summer?

A huge driver of the spike is butterfat trade. Historically, the U.S. sends very little butterfat to Europe, given our limited access to the EU27 and historically minimal export availability of butter out of the U.S. However, prices have diverged considerably, with U.S. 80% salted butter prices sitting roughly 40% below European benchmarks today. As such, even with the usually cost-prohibitive in-quota tariff of $0.50/lb., the U.S. is now in a position to move butter and AMF to Europe, which was starved for milkfat.

While U.S. exports of butter and AMF to the EU27 had been improving for several months, July was exceptional, as sales surged by more than 20,000%, a gain of 4,295 MT. While the increased volume is likely temporary and dependent on the price gap, it does highlight that U.S. fat prices are aligning to be competitive with other global dairy suppliers. While that could potentially create opportunity for greater U.S. fat-heavy dairy products to the region in the future, limited market access to the EU27 and expectations that global butter prices will converge remain significant hurdles to a consistently competitive U.S. presence.

Butter wasn’t the only U.S. dairy product that was attractive to European importers in July. U.S. exports of high-protein whey to the EU jumped 335% (+842 MT) for the month. Similar to butter, the bulk of trade between the U.S. and Europe appears to be price arbitrage, given the current price spread between the two markets. Based on the unit values, it appears most of the volume in June and July was WPC80, in contrast to prior months where large quantities of whey protein isolate were being shipped to the EU.

Even with the gains made over the summer in butterfat and proteins, the market access challenges in Europe should rightly temper expectations that this surge in exports is likely to continue. Instead, these volumes should be viewed as accelerating the convergence of global butter and protein prices.

Learn more about global dairy markets

• U.S. dairy exports surge in June

• U.S. exports slip 2% in May

• U.S. dairy trade falls 5% in April

• U.S. dairy exports rebound in March

   

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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.