U.S. dairy exports were filled with mixed signals in February. U.S. dairy exports fell 5% compared to a year ago after adjusting for leap day despite cheese setting an all-time record for the month of February.
The main culprit behind the decline was U.S. nonfat dry milk/skim milk powder (NFDM/SMP), which declined by 26%. NFDM/SMP volumes to Southeast Asia fell by an astonishing 53%, likely caused by U.S. milk powder prices sharply diverging from global levels late last year and into 2025. With February’s decline, U.S. NFDM/SMP exports are the lowest since 2019 on an annualized basis, even as it remains the United States’ No. 1 dairy product exported.
In contrast to milk powder’s sluggish performance, U.S. cheese exports maintained their growth trajectory, improving 7% year-over-year, led by a surge in volumes to Korea (+50%), Australia (+67%), MENA (+26%) and the Caribbean (+31%). Weaker sales to China (-58%), Japan (-28%) and Mexico (-6%) did little to dampen overall volumes.
The rest of the dairy complex saw similarly mixed results. Total whey exports declined by 5%, primarily driven by softer sales of protein. However, dry whey and modified whey (primarily whey permeate) both saw modest gains for the month, though lactose sales softened. Additionally, in a welcome development for cream markets, butter and AMF exports soared (+236%) with U.S. butterfat at a significant discount to product from Europe and Oceania.
Looking ahead, the outlook for U.S. exports remains murky given the uncertain policy environment. Yet despite the uncertainty, the U.S. still has significant opportunities to grow its exports abroad.
Source: USDEC
