U.S. dairy exports started 2026 much like they finished 2025: with year-over-year (YOY) double-digit growth. U.S. milk solids equivalent (MSE) volume increased 12% in January, just shy of December’s 13% gain. It was the biggest January on record in MSE volume terms, driven by ongoing growth in cheese and butterfat shipments and—an infrequent sight over the past couple years—double-digit growth in nonfat dry milk/skim milk powder (NFDM/SMP).
The results on the value front were not as stellar: +4% to $740.0 million, as falling prices for U.S. cheese and butter in the back half of the year began to catch up with shipments.
Cheese and butterfat lead
Cheese and butterfat, which set export records in 2025, remain the stars for U.S. dairy exports. U.S. cheese shipments rose 11% YOY to 51,688 MT, which was just above the 2025 monthly export average of 51,087 MT.
While Australia (+46%, +1,436 MT) remains a rising star for U.S. cheese, sales to Latin America remain the engine powering export growth (see below for a deeper dive on U.S. cheese exports to Latin America). The only notable surprise in January cheese results was Japan. YOY volume to Japan fell for the first time in nearly a year, dropping 24% (-1,375 MT) in January. The next couple months will tell whether that is a temporary blip or a more serious shift in purchasing.
U.S. butter sales posted their ninth straight month of triple-digit YOY increases. Volume rose 187% to 9,194 MT. The Middle East/North Africa was responsible for nearly half that gain, with January volume to the region rising by 2,511 MT, an exponential increase over the previous year.
U.S. shipments of anhydrous milkfat (AMF) grew 18% YOY (+685 MT) to 4,583 MT. That was one of the smallest gains for AMF over the past 18 months, although that was largely due to a very strong January 2025. U.S. suppliers shipped what was then a record volume of 3,897 MT AMF last January (a high that has since been surpassed in both November and December 2025). (For more on butterfat sales, with a focus on the latest developments in the Middle East, see below.)
The other big positive in January was NFDM/SMP, which increased 19% (+8,992 MT). It marked the second straight month of big gains for NFDM/SMP, with Southeast Asia leading the way. U.S. volume to Southeast Asia grew 62% (+6,450 MT) and was up 57% (+12,129 MT) over the past two months. That’s good news for U.S. suppliers, however, the gains come against very weak prior-year volumes. In fact, the two-month total for December 2025/January 2026 is the lowest December-January since 2018/19. U.S. suppliers will face a tougher milk powder growth challenge as prior-year NFDM/SMP export volume begins to pick up in March, particularly given the disconnect between U.S. prices and the rest of the world.
Challenges coming
And that’s not the only caution signal ahead. While 2025 ended well and 2026 started on a high note, U.S. suppliers are facing some significant impending headwinds, chief among them the conflict in the Middle East. Closure of the Strait of Hormuz near Iran will immediately curtail shipments to the region, particularly affecting U.S. cheese and butter. Depending on the duration of the conflict, the hostilities could drive global inflation via increased energy and other costs and weigh on world dairy demand.
Source: U.S. Dairy Export Council
