February Shows Uneven Trends in U.S. Dairy Exports

Cheese Excels Amid Milk Powder Decline

The U.S. dairy industry faced contrasting fortunes in February, with overall exports decreasing by 5%, equivalent to a drop of 9,587 metric tons in milk solids. Cheese, however, was a bright spot, achieving record sales for February and registering a 7% increase year-over-year.

The decline in exports was primarily due to a significant reduction in nonfat dry milk/skim milk powder (NFDM/SMP), which fell by 26%, losing 16,737 metric tons.

This was exacerbated by a dramatic 53% decrease in exports to Southeast Asia, influenced by sharp price differences between U.S. and global markets that began the previous year.

In contrast, cheese exports saw robust growth in several key markets, including a 50% increase to Korea and significant gains in Australia, MENA, and the Caribbean. This growth helped mitigate declines in other areas such as China, Japan, and Mexico.

Butter and anhydrous milk fat (AMF) exports also saw substantial increases, with total exports surging by 236%.

This growth was primarily due to the U.S.'s competitive pricing compared to European and Oceanian products, making U.S. butterfat products particularly attractive on the global market.

On the downside, the whey segment saw a decline of 5%, with high-protein whey exports notably weaker, marking the lowest February output since 2022. The drop in high-protein whey exports was driven by significantly lower demand from China and South America.

As the U.S. dairy industry navigates a complex international landscape, marked by both opportunities and challenges, its ability to adapt to market dynamics and policy changes will be key to sustaining and expanding its global footprint.

The uncertain policy environment adds another layer of complexity, but the industry's competitive pricing offers a potential pathway for continued growth in exports.