Halfway through 2025, and the markets are favoring U.S. dairy product exports in part to continued price advantages on the global scene but also improved trade relations with China, which suppressed sales earlier in the year. In June, U.S. dairy product exports saw a 15% year-over-year gain in volume on a milk solid equivalent basis (MSE), pushing total U.S. dairy export volume up 1.2% year to date and the year-to-date value to $4.72 billion.
China helps bolster dairy product export gains
All dairy product export categories – except for nonfat dry milk/skim milk powder (NFDM/SMP) – showed considerable gains in June’s export performance. While the cheese and butterfat markets have been consistently strong for U.S. suppliers in 2025, it was sales of low-protein whey and lactose to China that propelled results during the month of June as described in the U.S. Dairy Export Council’s (USDEC) monthly market update.
During the month of June, year-over-year exports of low-protein whey to China grew 33% (up 6,462 metric tons), while lactose shipments to the country rose 42% (up 4,235 metric tons). Both of these volumes supported overall U.S. sales of low-protein whey and lactose for year-over-year gains of 16% and 14%, respectively. Remember, in May, year-over-year volumes of low-protein whey to China stumbled 70% (down 11,873) and 59% (down 4,717 metric tons) for lactose.
Cheese, once again, remained the prominent leader of dairy product exports. Following May’s record shipment, June sales surpassed that by 641 metric tons for a total export volume of 52,191 metric tons. The month’s record sales were 34% greater (up 13,347 metric tons) than June of 2024, as growth was seen in most major markets. These volumes have been driven by an impressively strong appetite for cheese, and particularly U.S. cheese as prices have been about 20% cheaper than European and New Zealand-sourced product this year. Demand for product has been notable in Japan and South Korea, and Central America and the Caribbean, which are beneficial destinations for U.S. suppliers considering location and positive trade relations, according to USDEC.
Butterfat exports also had a strong month in June. Year-over-year volume of butter doubled through the month (up 3,016 metric tons) as anhydrous milkfat volume improved 34% (up 598 metric tons) year over year. Year-to-date butterfat exports climbed to 48,630 metric tons, which is 151% more (up 29,259 metric tons) compared to the same time period in 2024. This volume is the most in recent years but comes short of record shipments during the first half of 2010, which was at 51,164 metric tons. While U.S. supply has been healthy, the growth is mostly due to competitive pricing on the global market and has led to strong shipments to Canada (up 69% year to date), Mexico (up 356%) and the Middle East North Africa (up 469%).
While there was a lot to applaud in June, U.S. exports of NFDM/SMP fell short to most major destinations. Southeast Asia had the largest year-over-year decline of 9% (down 1,796 metric tons), followed by additional shortfalls to the Caribbean (down 22%, 1,192 metric tons) and Central America (down 23%, 660 metric tons).
The outlook is favorable for U.S. dairy exports in 2025, but such success will hinge on improved whey markets and trade relationships and continued competitive pricing in the global marketplace.
NEXT-assisted sales near 38 million pounds
Following the National Milk Producers Federation (NMPF) board of directors meeting in June, the newly created member-funded export assistance program, NMPF Export and Trade (NEXT), was approved to begin assisting sales July 3.
During the program’s first month, NEXT member cooperatives secured 223 contracts which totaled 37.7 million pounds of U.S. dairy product sales in 2025. These products will go to 23 countries in Asia, Oceania, Middle East North Africa, Central America, the Caribbean and South America sometime between July and December of this year. It’s important to note that the volume reflects current contracts for delivery, not completed export volumes.
NEXT succeeds the previous export-assistance program Cooperatives Working Together (CWT), with expanded services to dairy producers for an effective means to build U.S. dairy’s share in the global marketplace.
Dairy heifers, embryos fall in June
U.S. dairy replacement heifers for exports were down 55% from May to June and about the same year over year. Canada remained the top importer, purchasing 47 U.S. dairy replacement heifers while both the United Arab Emirates and the Bahamas also collectively purchased 14 animal units. The largest decline in purchases came from Mexico (buying zero in June from 66 in May), but to no surprise with the New World screwworm present in Mexico and the U.S. closing borders for animal sales to reduce the spread of the pest.
Year-to-date exports of U.S. dairy replacement heifers is at 656 animal units. This time in 2024, the volume was recorded at 11,743 animal units, as large quantities were purchased by Saudi Arabia, Turkey and Vietnam during the first quarter, and mainstay trade partners Canada and Mexico were making larger monthly purchases of U.S. dairy replacement heifers.
The same was true for U.S. dairy embryos in June but not to the severe degree that U.S. dairy replacement heifers saw. Month-over-month sales of embryos were down 11% from May to June (387 units to 343 units). Japan, Australia and Germany were trade partners that had the largest month-over-month declines, down 62% to 72 units, down 71% to 16 units and down 90% to 12 units, respectively. At the same time, Colombia made its first purchase of the year in June and led the category with 158 U.S. dairy cattle embryo units.
Year-to-date sales are at 2,349 units, down 574 units (20%) from the first half of 2024. The same period in 2024 saw 2,923 U.S. dairy embryos exported.
Gains in dairy-quality alfalfa exports, other hay shows small loss
Total sales of U.S. dairy-quality alfalfa hay exports grew 10% in June to 141,323 metric tons, even as many countries decreased purchases throughout the month. Like what was noted in U.S. dairy product exports, China returned to the market with an interest in U.S. product and more than doubled their May imports of U.S. dairy-quality alfalfa hay in June. The 217% increase moved 76,585 metric tons across seas to the mega-country. Other monthly gains came from the United Arab Emirates (up 23% to 8,837 metric tons) and Oman (up 119% to 570 metric tons). The noticeable gains were met with losses from Japan (down 13% to 24,995 metric tons), South Korea (down 24% to 13,831 metric tons) and Saudi Arabia (down 82% to 6,766 metric tons).
Year-to-date exports of U.S. dairy-quality alfalfa is at 904,308 metric tons compared to last year’s 1,180,023 metric tons with much of those additional tons going to China.
Other hay sales recorded a 1% loss from May to June with 73,695 metric tons going outside of U.S. borders. China bolstered the sales, increasing imports from a measly 280 metric tons in May to 2,161 metric tons during the month of June. South Korea also increased sales by 4% to 16,757 metric tons, while Japan and Taiwan retreated 6% to 41,501 metric tons and 18% to 7,772 metric tons, respectively.
In total, the U.S. has exported 490,349 metric tons of other hay during the first half of 2025. That’s down from 542,329 metric tons over the same time period a year ago.
Trade balance deficit sees slight improvement
June’s U.S. agricultural trade balance deficit settles at $4.132 billion as exports reached $13.309 billion and imports reached $17.441 billion throughout the month, according to the Department of Commerce/Census Bureau’s latest report. While still an unprecedentedly large deficit, June’s value is $75 million less than what was recorded for May and the smallest of 2025.
The fiscal year-to-date (Oct. 1, 2024 to Sept. 30, 2025) balance has grown to a deficit of $33.755 billion.
