After delays during the six-week government shutdown last fall, reports summarizing 2025 and fiscal year 2026 dairy export data are flowing again. The October 2025 report from the U.S. Dairy Export Council (USDEC) provided good news, although dairy exports remain down since peaking in July.
After a dip in September, U.S. dairy exports moved back into growth mode. On a milk solids equivalent (MSE) basis, October 2025 exports were up 7% compared to the same month the previous year. That growth was powered by increased shipments of cheese, which set a new monthly record of 55,060 metric tons (MT), and butter, which more than doubled the same month a year earlier for a sixth consecutive month. Sizable gains from whole milk powder, milk protein concentrate and nonfat dry milk/skim milk powder (NFDM/SMP) showed some signs of life in October.
Year to date, U.S. dairy exports through October were estimated at about 1.9 million MT, up 2.3% compared to a year earlier, with volumes up in four of the previous five months. In value terms, year-over-year U.S. dairy exports jumped 17% to $837.1 million for October, lifting year-to-date value to more than $8 billion.
Cheese exports have set new monthly volume records in four of the first 10 months in 2025, led by cheddar varieties. Mexico continues to be the leading destination.
It’s still early, but recent U.S. and global data provide some optimism on global demand, according to USDEC. However, competition in the world market will also increase as milk production continues to surge in the U.S., European Union and New Zealand. With that brings the need for more aggressive pricing.
Looking at specific products, one area of concern is the market for NFDM/SMP to the largest market, Mexico. Compared to a year earlier, sales there have plunged for three consecutive months.
With October’s numbers, which vary slightly from USDEC data, the Department of Commerce/Bureau of the Census estimated calendar year 2025 (January-October 2025) dairy product exports at about $7.94 billion, up 15% from the same period in 2024. Calendar year 2025 dairy imports were estimated at $4.34 billion, down 8% with cheese imports down 13% at $1.36 billion.
Ag trade deficit grows
October’s overall U.S. ag trade balance was negative. The U.S. Department of Commerce/Census Bureau estimated the value of October agricultural exports at $15.62 billion and the value of ag imports at $16.05 billion, yielding a trade balance of -$424 million for the month.
Through October, the calendar year 2025 agricultural trade deficit was about $39 billion, with exports at $141.1 billion and imports at $180.1 billion.
In late December, the Economic Research Service and Foreign Agricultural Service released its latest Outlook for U.S. Agriculture Trade, and the numbers aren’t great. That report forecast a total U.S. ag trade balance of -$43.7 billion, a three-year high.
One bright spot, dairy product exports were forecast at about $9.2 billion, up from $8 billion in 2024. Dairy product imports were forecast at $5.5 billion, up slightly from a year earlier. Cheese imports were forecast at $1.7 billion, down from $1.9 billion in 2024.
The next outlook report is scheduled for Feb. 27.
Dairy heifer, embryo sales low
The USDA’s Foreign Agricultural Service (FAS) estimated export sales of U.S. dairy replacement heifers remain extremely low. October sales totaled 117 head, with 65 to Mexico and 52 to Canada. January-October dairy heifer exports now total 1,096 head, far below the 13,345 in 2024 and 18,775 in 2023.
Exports of dairy cattle embryos also are lower. Through October, dairy embryo exports totaled 4,170, with Germany (1,015) and Japan (874) serving as the major markets. Exports totaled 5,687 in 2024 and 10,090 in 2023.
Hay exports steady
U.S. hay exports have remained mostly steady throughout the year.
October exports of alfalfa hay were estimated at 161,261 MT, the highest monthly total since March. That brought the year-to-date total to 1.435 million MT. October export volume to China, the largest market, remained consistent at about 54,000 MT in October and bringing the year-to-date total to 615,000 MT.
October exports of other hay hit a six-month high at 77,077 MT, bringing the year-to-date total to 783,504 MT. Those exports are primarily supported by sales to longtime market leaders Japan and South Korea, which combined took 80% of the total.
