Low-protein whey and lactose declines offset an otherwise solid month for U.S. suppliers. 

Most U.S. dairy product categories performed well in May, with cheese, butterfat, milk powder and high-protein whey all posting year-over-year (YOY) gains. Cheese volume even set a record. But total YOY milk solids equivalent (MSE) exports for the month fell 2%, as ongoing tariff tensions with China dragged down shipments of low-protein whey (mostly whey permeate) and lactose, overwhelming the other gains.

With May’s results, total U.S. year-to-date (YTD) MSE volume was down 1.6%. U.S. export value in May increased 13% to $803 million, on target with the YTD gain of 13% to $3.873 billion.

Cheese leads again
May U.S. cheese exports set a record for volume in a single month, topping 50,000 MT for the first time. It was previously reported that U.S. cheese exports topped 50,000 MT for the first and only time in March 2024, but with the release of adjusted trade numbers this month (going back up to five years), the March 2024 total came down to 49,976 MT.

YOY U.S. cheese volume rose 7% despite a decline in YOY volume to our biggest customer: Mexico (for more on Mexico, see the deep dive below). U.S. cheese shipments to Mexico fell 12% (-2,207 MT), but just about every other significant market saw gains. Some of the YOY highlights include: Japan +24% (+1,148 MT), South Korea +20% (+1,102 MT), Central America +23% (+1,054 MT), South America +47% (+1,020 MT) … and the list goes on. Global cheese demand remains strong and U.S. suppliers have been enjoying a price advantage since late 2024—factors that bode well for exporting more cheese this year.

YOY U.S. nonfat dry milk/skim milk powder (NFDM/SMP) volume increased for the second time this year, rising 2% (+1,059 MT) to 61,953 MT. Modest gains to most major markets helped offset a 79% decline (-1,178 MT) to China. On the plus side, YOY U.S. shipments to our No. 2 buyer—Southeast Asia—increased for the first time since last September, rising 2% (+290 MT). On the downside, May NFDM/SMP volume to Southeast Asia totaled only 14,459 MT and only recorded a gain because of poor volume the previous year. U.S. suppliers may have more of a challenge June-August, when prior-year volumes to Southeast Asia averaged more than 22,000 MT per month.

U.S. butterfat exports (butter and anhydrous milkfat (AMF)) remained on record pace, as YOY volume rose 151% (+4,506 MT) in May to 7,486 MT. Global demand for butterfat continues to ride high despite still-elevated prices. Even if New Zealand and EU prices soften a bit (as recent indicators suggest), U.S. suppliers still remain at a significant advantage and short-term prospects appear bright.

Not all positive
The downside of the May numbers, and what ultimately dragged down U.S. MSE volume for the month, stems primarily from China and the ongoing tariff challenges. (see deep dive on China below). Total YOY U.S. low-protein whey exports sank 25% in May (-11,873 MT). U.S. shipments to China for the month plummeted 70% (-15,649 MT). Notably, U.S. suppliers are finding some alternative buyers (such as Vietnam, Malaysia and South America), but volumes so far are not enough to make up for the losses to our top low-protein whey buyer, China.

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.

Dip in cheese demand weighs on trade to Mexico
Mexico is the single largest destination for U.S. dairy exports, accounting for 29% of trade in 2024 in MSE terms. May 2025, however, was a down month.

U.S. dairy exports to Mexico in May fell 6% (-3,651 MT MSE) year over year, with weaker cheese exports (-12%, -2,207 MT) weighing heavily on the total figure. Shredded cheese and fresh cheese performed particularly poorly, with volumes down 20% (-1,444 MT) and 30% (-500 MT), respectively, suggesting that mozzarella demand has been especially weak.

While May’s cheese exports to Mexico were disappointing, it’s important to keep them in perspective. The YOY comparison was up against the strongest month of cheese exports to Mexico ever. May 2025’s exports to Mexico were still the sixth highest of any month and robust by historical standards.

The decline in cheese volume also obscures some important gains across other products. Exports of NFDM/SMP to Mexico rose by 1% (+367 MT), reaching the highest volume seen in six months. Mexico also remains a critical destination for U.S. butterfat, with YOY butter exports up 32% (+43 MT) and AMF shipments up 416% (+576 MT).

Despite the YOY loss for cheese exports in May, Mexico continues to be a critical destination for a wide variety of U.S. dairy products.

Exports to China plummet amid trade tensions
As trade tensions between the U.S. and China continued, U.S. dairy exports took a hit in May. In milk solids terms, exports to China plummeted to 10,472 MT, representing the weakest performance in a single month since July 2010. It marked a 68% decline (-22,225 MT MSE) compared to the same month last year.

Not surprisingly, the largest impact was seen for low-protein whey. U.S. exports of whey to China under HS code 0404.10 (consisting largely of whey permeate) tumbled by 70% (-15,649 MT), with big losses seen across all subcategories, including dry whey, whey permeate, and whey protein concentrates with protein levels under 80%.

The evaporation of Chinese demand weighed heavily on total U.S. exports. Across 2024, 16% of all U.S. exports in milk solids terms—and 43% of low-protein whey products—went to China. Consequently, the decline in Chinese demand in May led total U.S. exports of low-protein whey to stumble by 25% (-11,873 MT).

Losses weren’t limited to low-protein whey products, however. YOY shipments of WPC80+ to China fell 83% (-822 MT), while exports of NFDM/SMP slumped by 75% (-1,159 MT). Lactose exports fell 59% (-4,727 MT) and cheese exports dropped 81% (-988 MT) for the month. Although these declines are significant, U.S. exports to China primarily consist of whey permeate, lactose and WPC80+ which overall drove the decline in exports to China.

Canadian demand remains robust 
Despite rising tensions, U.S. dairy products continued to find traction in Canada. In milk solids terms, Canada is the third largest single-country destination for U.S. exports. U.S. dairy exports to Canada were up 6% (+600 MT MSE) year over year in May, though performance was mixed across products. 

Competitive prices continued to bolster U.S. exports of both butter (+53%, +666 MT) and AMF (+92%, +270 MT), though total butterfat volumes were the lowest seen in any month this year. A persistent price gap between U.S. and international suppliers, combined with a logistical advantage suggests butterfat exports to Canada are likely to remain upbeat. 

Whey exports were mixed. While shipments of WPC80+ (+13%, +110 MT) and lower protein WPCs (+11%, +109 MT) were up, exports of dry whey slipped by 2% (-40 MT). Meanwhile, total cheese exports were also down 2% (-42 MT), due to weaker demand for shredded cheese and other cheese varieties despite fresh cheese and cheddar seeing growth.

Learn more about global dairy markets

• U.S. dairy trade falls 5% in April

• U.S. dairy exports rebound in March

• Weaker milk powder sales weigh on otherwise positive dairy exports

• U.S. dairy exports inch up to start 2025

Subscribe to the U.S. Dairy Exporter Blog    

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.