February cemented the speed at which U.S. dairy exports are moving in today’s global marketplace. During the month, export volume not only grew 13% compared to February 2025, but also contributed to a year-to-date 12% volume increase in 2026. As all major dairy products saw favorable export conditions during February, it was once again U.S. cheese exports that led the charge, as explained in the U.S. Dairy Export Council’s (USDEC) latest report.
A short month with big wins
U.S. dairy product export performance in February was nothing short of spectacular. In the cheese category, booming sales toppled record performance for any month despite the shortened number of days. The volume of cheese exported grew 30% year over year to reach a record 58,406 metric tons, and USDEC noted that volume would have surpassed 60,000 metric tons if February were a 30-day month. The last time cheese exports were this strong in a single month was last November at 55,061 metric tons, a 6% difference.
Latin America remains the main driver of cheese exports, with Mexico, Central America and the Caribbean, and South America all having increased shipments by 35% or more year over year in February. But it’s the product’s diversified geographical reach and variety that helps each month become more robust than the last. In February, cheese exports were up to Japan and Australia by 67% and 35%, respectively, compared to the same month last year. From the standpoint of product type, shipments of fresh cheese grew 36%, but so did shredded cheese and other cheese, like Gouda, up 26% and 22%, respectively.
As the spring flush gets underway and increased processing capacity is still available, milk output should remain strong throughout the year and meet the ever-growing global demand for U.S. cheese.
Butterfat exports also had a strong month with year-over-year volumes rising 77% or 6,646 metric tons, a majority of that being butter. The Middle East/North Africa (MENA) was the leading destination as shipments to the region were up seven times that of February 2025. The month also brought positive news for U.S. nonfat dry milk/skim milk powder (NFDM/SMP) exports as those sales grew 8% year over year.
February was no doubt a continuation to an irrefutably strong start to 2026 for U.S. dairy exports, but the biggest headwinds may be on the horizon. In the report, USDEC notes that March data should reflect supply chain hiccups with the closure of the Strait of Hormuz, and the momentum of 2025 really picked up in June, giving this year’s export market strong competition in the months ahead.
NEXT-assisted sales surge in February, March
The National Milk Producers Federation (NMPF) Export and Trade (NEXT) member cooperatives saw sales swell in the last two months.
In February, 246 contracts were secured – the equivalent of 54.3 million pounds of dairy products – to NEXT-assisted sales in 2026. The products will go to 28 destinations in Asia, Europe, North America, Oceania, MENA, Eurasia, South America, Central America and the Caribbean, and sub-Saharan Africa through July.
The program secured 30.4 million pounds in 77 contracts from March 1-27. Products will be shipped to 23 country destinations through October.
Steady exports of replacement heifers, embryos
U.S. dairy replacement heifers were in greater demand in February as the month’s exports reflected quantities shipped in previous Februarys. In total, 223 animal units were exported with 186 of those going south to Mexico and another 11 to Brazil. Canada also contributed to the month’s lot with 26 animal units moved north. February’s exports were a stark difference from the month prior, up from a slim 35 U.S. dairy replacement heifers sold in January to international trading partners.
For dairy cattle embryos, the export quantity was down 1% in February from January. Last month, 200 units were exported to Germany and Switzerland, while February’s 198 exported units of U.S. dairy cattle embryos were shipped to a more diverse group. Most of the exports went to Nigeria (158), followed by the United Kingdom (18), the Netherlands (10), Australia (7) and Germany (5). The month’s exports were down 72% from February 2025 when Japan, China and Germany made large purchases.
Hay sales mixed
February’s exports of dairy-quality alfalfa hay were down 13% from the month prior at 138,775 metric tons. China purchased the most at 54,078 metric tons (up 13%), but it was not a great enough quantity to offset the fewer metric tons shipped to other strong trading partners like Saudi Arabia and Japan, both down 39% and 15%, respectively. February’s exports were more than 8% less than February 2025, bringing the year-to-date total of U.S. dairy-quality alfalfa hay exports to 298,642 metric tons for 2026.
Conversely, other hay sales were up a mere 1% from January at 80,280 metric tons. Major purchasers included Japan and South Korea, although both imported less other hay in February than in January. Japan bought 35,666 metric tons, down 8%, and South Korea bought 25,767 metric tons, down 9%. The rise in exports was supported by more metric tons shipped to Taiwan and the United Arab Emirates. February’s exports bring year-to-date sales of other hay to 159,795 metric tons.
Trade deficit shrinks in February
February’s U.S. agricultural trade balance was a deficit of $967 million, down from $1.75 billion the month prior. Exports for the month were $14.73 billion, and imports were $15.7 billion, according to the Department of Commerce/Census Bureau.
The fiscal year-to-date (Oct. 1, 2025, to Sept. 30, 2026) balance is a deficit of $4.84 billion.
