Hoard's Dairyman:
U.S. dairy exports hit second all-time high
March 2, 2026
By Stephen Cain, Vice President, Economic Policy and Market Analysis
U.S. dairy exports finished the year at near-record volumes — up 4% year-over-year (YOY) on a milk solids equivalent (MSE). Last year’s volume was the second highest ever at 2.3 million metric tons (MT) MSE and valued at $9.6 billion. While the year started off slowly with U.S. dairy exports down 1.6% through the first five months, shipments exploded in the back half of the year, up 8% YOY between June and December. The tremendous growth in U.S. exports this past year can be largely attributed to two key drivers: rebounding global demand for dairy products, and U.S. price competitiveness.
Global demand for dairy products over the past few years has been somewhat challenged. From 2022 to 2024, global dairy trade was effectively flat (+0.4%). China, which had been driving growth, pulled back from the market at the same time that many countries around the world struggled with inflation. Fast forward to 2025 (specifically the back half of the year), and we see global trade rebounding significantly — up 3% for the year and up nearly 5% in just the last six months of 2025. What is particularly encouraging about this demand improvement is that it was driven by many countries and not only one or two key importers. Thankfully, global inflation continues to ease and economies around the world are in better shape, which is supporting global dairy trade.
Growing demand wasn’t the only factor boosting U.S. exports. A prolonged period of price competitiveness made the U.S. the most attractive supplier for many dairy products, particularly for cheese and butter. Over the past year, on a spot basis, U.S. cheese prices sat at a 24% (53 cents per pound) discount to other suppliers on average, with butter at a 33% ($1.05 per pound) discount. While that price advantage helped the U.S. grow export sales and capture market share from competitors, U.S. dairy farms are challenged when prices get this low. Positively, on the profitability front, the gap has closed considerably in recent weeks. During that time, U.S. market share of global butter trade grew significantly from 5% in 2024 to 12% in 2025. Similarly on cheese, U.S. market share has risen from 18% to 20% in 2025. Overall, the U.S. grew dairy exports more than any other supplier and surged to become the third-largest agricultural commodity exported.
As a result, U.S. exports improved significantly (+4%), with cheese (+20%) and butterfat (+167%) driving overall volume growth. Conversely, total U.S. nonfat dry milk and skim milk powder exports were down 9% last year. The key driver for the decline is the U.S. simply had very little product available for export, driven by lower production and reallocation of skim solids. As a result, exports slipped to the historically three largest markets for the U.S. — Mexico -1%; Southeast Asia -8%; China -5%, leaving space for growth in traditionally smaller markets. Outside of these top regions, U.S. exports grew substantially — up 17% in total with growth across most products.
Altogether, the U.S. had a tremendous year for exports last year driven by both growing global demand and a favorable price advantage. While the U.S. won’t hold this large of a price advantage forever, the expansion in market share and higher sales to new markets seen in 2025 has helped U.S. suppliers gain a foothold that can serve as a foundation for future growth, even when global prices move closer to alignment.
This column originally appeared in Hoard’s Dairyman Intel on March 2, 2026.
