The U.S. dairy export market noted gains in most major product categories, a trend that was apparent as 2024 came to a close. Cheese exports saw year-over-year volume gains for the 13th consecutive month and low-protein whey shipments rose 6%, contributing to an impressive 20% rise in year-over-year U.S. export value. Yet, there are plenty of uncertainties that will shape exports in 2025. Here’s Progressive Dairy’s 30,000-foot look at dairy-related export categories.
Growth in most dairy product export categories offset other shortfalls
U.S. dairy product exports in January began the new year with notable gains in cheese, low- and high-protein whey, and butterfat as nonfat dry milk/skim milk powder (NFDM/SMP) and lactose stumbled. This resulted in an overall volume increase of 0.4% in milk solids equivalent compared to this time last year.
However, the strong growth in most categories lead to a year-over-year U.S. export value of $714 million – a 20% increase and a record for the month of January, as explained in the U.S. Dairy Export Council’s (USDEC) monthly market update.
U.S. cheese shipments grew 22% to 46,680 metric tons in January, another record for the month. As Mexico continues to be the U.S.’s top cheese importer, January’s purchases only grew a modest 1%, or 70 metric tons. The remaining growth for the month came from Asia as cheese exports to Japan soared by 59%, South Korea by 34% and Southeast Asia by 67%. Demand also surged in the Middle East North Africa region, notably Bahrain, as well as Central America and the Caribbean.
Low-protein whey shipments rebounded in January, rising 6% compared to December 2024. Robust demand came from China with sales to the country improving by 63%, after adjusting for the misclassification of some Chinese shipments of low-protein whey as high-protein whey (WPC80+). Additionally, low-protein whey exports to South America rose 151% (1,357 metric tons) in January.
While Japan’s purchases of low-protein whey declined 69% in January, the country made significant purchases of WPC80+ (2,009 metric tons), marking the largest single-month purchase of high-protein whey since September 2023. It’s estimated that total WPC80+ exports rose 19% after adjusting for the product misclassification in China.
Despite growth in most U.S. dairy product exports, declines in sales of NFDM/SMP and lactose restrained total export growth. Total January NFDM/SMP exports dropped by 20%, becoming the second straight month volume has been less than 50,000 metric tons. The product’s poor month was largely a result of high U.S. prices.
Looming tariffs continue to threaten markets
President Donald Trump once again levied new tariffs March 4 on imports from Canada, Mexico and China, only to grant a temporary extension for Canadian and Mexican goods set to expire April 2. In 2024, these three countries purchased over half of U.S. dairy exports, which is the equivalent to approximately 9% of milk produced in the U.S. (Read: Economic Update: Tariffs imposed on U.S. dairy’s top three export markets, then delayed again)
USDEC evaluated factors that will shape international dairy supply and demand in 2025 in an analysis of the top five markers for growth or reduction. The report states, “… we’ve done our best to outline the current state of affairs, the potential outcomes and where we think these signs might ultimately point – with a heavy dose of humility given the uncertain economic and policy landscape.”
Those five signposts include U.S. dairy imports to China, growth in Mexico and Latin America, an improving global economy, Southeast Asia’s appetite for international dairy imports and U.S. milk production. (Read: Five dairy export signposts to watch in 2025)
Dairy heifer, embryo exports fall from December 2024
January U.S. dairy heifer replacement exports were drastically different from this time last year. In total, 113 animal units were exported during January to Mexico (90) and Canada (23), a 55% year-over-year drop from 4,097 U.S. dairy replacements in January 2024. A majority of the monthly sales last year went to Saudi Arabia. U.S. dairy heifer replacements exports in January 2025 were also down 66 units from the month prior.
Exports of dairy embryos sunk lower with January sales at 408, down 3% from December 2024. Year-over-year exports were down 18% in January 2025 compared to the same month a year prior. Leading purchasers were Japan (173) and Germany (111), as the United Kingdom (70), Thailand, (17), Australia (16), Brazil (12), the Netherlands (6) and France (3) also contributed to the month’s sales.
Hay exports are mixed at start of 2025
Sales of U.S. dairy-quality alfalfa hay were down in January 2025 compared to the same time a year ago. In total, 155,286 metric tons of the forage was exported, down 3% from December 2024 and down 9% from January 2024. A majority of the hay was delivered to China (75,728 metric tons) and Japan (28,946 metric tons).
Other U.S. hay exports in January were at 85,737 metric tons, down 2% from the month prior, but up nearly 6% from January 2024. Japan carried the sales at 44,693 metric tons, followed by Taiwan at 23,173 metric tons.
Trade balance shows widening deficit
January’s U.S. agricultural trade balance grew significantly from the month prior. The Department of Commerce/Census Bureau estimated January exports at $14.4 billion and imports at $20.7 for a trade balance deficit of $6.25 billion, more than $4 billion more than December 2024’s deficit.
The fiscal year-to-date (Oct. 1, 2024, to Sept. 30, 2025) balance was not updated by the USDA Economic Research Service at the time of this publishing.
CWT suspends intake until March
Cooperatives Working Together (CWT) provides a means to move domestic products overseas by helping overcome trade disadvantages. The program suspended intake of new bids beginning in January pending program renewal with a vote in March.
