First-quarter dairy product exports ended on a positive note, with volume growing 3% in March. As the first three months of 2025 trailed just 0.5% behind 2024 volume, the value over the same period grew 14%, marking a first-quarter record at $2.3 billion. Here’s Progressive Dairy’s 30,000-foot look at dairy-related export categories.
Most U.S. dairy products record gains in March
The uncertainties related to tariffs, global demand and world prices that cast a shadow over the U.S. dairy export market seemed to have little influence on dairy product export volume in March. As reported in the U.S. Dairy Export Council’s (USDEC) monthly market update, exports grew 3% in milk solids equivalents (MSE), becoming the highest monthly export volume since February 2023.
Additionally, the craving for U.S. dairy products brought first-quarter export values to a remarkable $2.3 billion, up 14% from the same period a year ago and a record for first-quarter values.
Contributing to the growth was nearly every dairy product category.
Nonfat dry milk/skim milk powder (NFDM/SMP) exports in March grew just 1% year over year, but the first positive movement in six months as prices have become more competitive against other global suppliers. Mexico was largely to thank as imports to the country improved 27% (7,213 metric tons).
Following a 14-month consecutive streak of year-over-year gains, U.S. cheese exports declined by 1% in March. Despite the slight fall, it remained a striking month of sales with 49,287 metric tons exported on the global market – the second-highest volume in history – but not enough to compete with March 2024’s historic performance when the U.S. shipped out a record 50,022 metric tons. Continued growth was due in part to a diverse customer base with purchase gains noted in Japan (up 32%, 1,614 metric tons), Southeast Asia (up 90%, 1,080 metric tons), the Caribbean (up 19%, 417 metric tons) and Central America (up 7%, 344 metric tons). Mexico – as the U.S. cheese’s leading importer – purchased 1% (121 metric tons) more product to its greatest volume to-date in 2025 at 15,405 metric tons.
Shipments of low-protein whey grew 3% (1,351 metric tons) compared to March 2024, with China being the primary buyer ahead of the tariffs that went into effect in April.
While March was a successful month for U.S. dairy product exports, the upcoming months face headwinds against current trade wars and the strong performances seen in April and May 2024.
Dairy heifer, embryo exports down drastically from month prior
U.S. dairy heifer replacement exports dropped significantly in March, falling 74% from 203 in February to 52 in March. While quantity was lower – and the lowest since January 2009 – purchasers were also fewer from the month prior. Canada imported 36 U.S. dairy heifer replacements and the Dominican Republic purchased 16 animal units. In comparing year-over-year export sales, there were 5,236 U.S. dairy heifer replacements sold outside the U.S. in March 2024, albeit 4,836 of those animal units went to Turkey and Vietnam in out-of-the-ordinary purchases.
A similar story was written for U.S. dairy cattle embryo exports in March. The month posted a 66% decline in embryo sales, with China, Germany and Japan all limiting imports. China remained the largest purchaser of embryos at 136 units in March but down 22 from the month prior. Germany was the second-largest purchaser at 46 units, down 116 from February. The remaining U.S. dairy cattle embryo exports were sent to the Netherlands (22), Switzerland (22) and Australia (15). Year-over-year exports were also down when comparing March 2024 to March 2025, but the spread was much tighter. Last year, the U.S. shipped 265 dairy cattle embryos to other countries.
Hay exports show strong improvement
Sales of U.S. dairy-quality alfalfa hay were up 22% in March after falling for two consecutive months. In total,185,1890 metric tons of dairy-quality alfalfa hay was exported with China, Japan, Saudi Arabia and South Korea, the leading purchasers of the product. All four countries contributed to the larger export volume in March, but South Korea posted an 8% decrease in imports of the forage compared to the other countries, which increased imports by 12%-67%. Year-over-year exports of U.S. dairy-quality alfalfa hay were down, with March 2024 posting 231,545 metric tons of the forage sold outside of the U.S.
Similarly, other U.S. hay exports grew by 18% in March. In total, 94,750 metric tons were sold, with Japan leading the purchases at 53,574 metric tons (up 42% from February). Other major purchasers included South Korea at 22,464 metric tons and Taiwan at 10,427 metric tons; both countries remained relatively stable in month-over-month purchases.
Overall trade balance is still in deficit
March’s U.S. agricultural trade balance grew ever so slightly compared to February. The Department of Commerce/Census Bureau estimated March exports at $16.06 billion and imports at $20.616 billion for a trade balance deficit of $4.557 billion.
The fiscal year-to-date (Oct. 1, 2024, to Sept. 30, 2025) balance is a deficit of $20.771 billion.
