Things could not have ended better for dairy product exports than they did in 2025. Following a roller-coaster first half, the export scene found steady momentum in the last six months of 2025, with December delivering favorable year-end results. The month brought a 13% rise in exports on a milk solids equivalent (MSE) volume basis from December 2024, lifting annual growth to 4% for the year to 2.32 million metric tons, just shy of 2022’s record 2.41 million metric tons. On a monetary basis, dairy product exports concluded the year at $9.63 billion, up 15% from the year prior.
The U.S. Dairy Export Council (USDEC) reviews the month and which dairy products bolstered the win in their latest report.
Cheese, butterfat deliver with standout years
Two dairy products shined in December 2025 – cheese and butterfat – and not by coincidence. The two products have more than pulled their weight throughout the year.
In December, year-over-year cheese exports rose 24% with record volume moving to Mexico (nearly 20,000 metric tons), a 15% year-over-year gain. South Korea and Australia also posted respectable growth, up 59% and 68%, respectively. Looking at the data for the entire year, all records were smashed. Year-over-year shipments surged 20% to 613,045 metric tons with every month except for March surpassing 50,000 metric tons of product moved; March was down just 1% to a respectable 49,287 metric tons. New capacity, economic growth in key export markets and consumer demand were all factors in cheese’s unequivocal success.
December was also good for butterfat. The product recorded its greatest month of 2025 with 15,706 metric tons shipped outside of U.S. borders. That’s reflected in a 260% year-over-year increase on a MSE basis for butterfat, pushed by both butter and anhydrous milkfat up similarly within their categories. The year concluded with exports at 122,085 metric tons, up 167% and surpassing the previous record set in 2013 by 31,655 metric tons. USDEC attributes ample supply and competitive pricing to the banner year for U.S. butterfat.
Exports in 2026
The U.S. dairy industry thrived under the global market conditions of 2025. Ample supply, consistent demand and favorable price points, all despite trembling geopolitical factors, positioned the U.S. as a strong exporter of dairy products. Will 2026 play off the momentum built in the year prior? That is the question.
In a recent report, USDEC points to key questions that the organization’s economics team believes will influence the export scene this year. They include:
- Will U.S. milk continue to abound?
- How much milk is in store worldwide?
- Can Southeast Asia rebound?
- Will Mexico remain an engine of growth for U.S. dairy exports?
- Will the U.S. continue to export butterfat?
U.S. milk production grew 2.8% in 2025, the largest annual jump in 20 years, according to USDEC, but milk production in the five major dairy suppliers has also grown and is expected to do so more in 2026. It’s anticipated that global demand will grow moderately to absorb elevated production with key regions and specific products coming into play.
Mixed performance of dairy replacements, embryos in December
The year ended with a lackluster performance of U.S. dairy replacement exports in December. From November to December, exports of dairy heifers fell 22% to 233 animal units, but up 20% from the same month a year ago. However, December concludes a year of remarkably low U.S. dairy replacement exports. In total, only 1,626 animal units were shipped outside of U.S. borders, a stark 88% difference from last year’s 13,345 animal units. North and South America were the preferred destinations, with a majority of replacement heifers traveling to Brazil, Mexico and Canada in 2025.
The exact opposite was true in the U.S. dairy embryo export market. Sales in December rose 19% from the month prior to 602 units and 43% above December 2024’s 421 units. On an annual basis, exports of U.S. dairy embryos were down 7% from the year prior with a total of 5,280 units sold. Germany and Japan were the biggest trading partners, each purchasing more than 1,000 dairy embryos in 2025.
December forage exports grew humbly
Dairy-quality alfalfa hay exports grew by a modest 6% in December. In total, 160,718 metric tons of product were shipped to China, Saudi Arabia, Japan and South Korea, namely, throughout the month. December values bring the year-end totals of U.S. dairy-quality alfalfa hay to 1.75 million metric tons, with China being the largest purchaser at 730,239 metric tons. However, 2025 exports were down 20% from 2024, with China purchasing 22% less product than the year prior.
Similarly, other hay exports rose 2% from November to December for a total of 85,430 metric tons of product exported. The month’s value contributed to an annual total of 952,663 metric tons sold to international buyers. However, the year-to-date value is down 10% from 2024. Both Japan and South Korea remained leading trade partners, surpassing purchases of more than 250,000 metric tons of other hay in 2025.
Monthly trade deficit widens to cap year
December’s U.S. agricultural trade balance deficit was $1.13 billion. Exports for the month were $15.26 billion and imports were $16.39 billion, according to the USDA Foreign Agricultural Service. However, data used to determine the year-end trade balance and fiscal year-to-date trade balance from the Department of Commerce/Census Bureau was not yet available at the time of this writing. Those will be available in the March report, said to include both December 2025 and January 2026 data.
