Prices continue to support the ample flow of milk in the U.S. as the global marketplace wants more. In March, not only were U.S. dairy product exports up 8% from the same month a year ago, but it was the highest milk solid equivalent volume in four years.
Looking at the quarterly data, volume rose nearly 11% in the first quarter of 2026, indicating there is hot demand for U.S. dairy product exports.
The U.S. Dairy Export Council (USDEC) explains the current market dynamics in their latest report.
Single-month records set for cheese, butterfat
March came in like a lion and left just the same for U.S. cheese and butterfat exports.
Shipments of cheese rose nearly 30% to surpass 60,000 metric tons and reach a never-before-seen level of 63,435 metric tons exported in a single month. Geographically, cheese sales remain diverse, but it’s the top markets – Mexico and South Korea – that continue to drive performance. In March, Mexico imported 40% more U.S. cheese than the same month a year prior. Similarly, South Korea imported 79% more of the product.
Cheese exports soared in the first quarter, up 23% or 32,655 metric tons, from the same period in 2025. USDEC notes the rise in volume is supported by diverse destinations, including Latin America – Mexico, Central America and the Caribbean – and Asia, namely South Korea. At the time of this writing, U.S. cheese is poised to remain a competitively priced dairy product for international buyers as U.S. production and processing capacity remain robust.
Butterfat demand was reflected in volume shipments more than three times that of March 2025 for the Middle East/North Africa (MENA) region and South Korea, up 2,672 metric tons and 1,691 metric tons, respectively. Exports to Mexico were up 1,533 metric tons or 98% compared to the same month a year ago.
The MENA region was a key proponent of U.S. butterfat exports in the first quarter. Yet other trading partners helped boost performance. In March alone, the Latin American demand – particularly in Mexico, Central America and the Caribbean – helped surpass year ago volumes by 8,940 metric tons. USDEC warns that there will be headwinds for the remainder of 2026 unless the U.S. can grow alternative butter markets in Korea and Oceania in addition to the Latin America region.
Speaking of headwinds, March showed the first real impact on U.S. dairy exports due to the closure of the Strait of Hormuz. Most notably, shipments of butter to Bahrain – a country in between Qatar and Saudi Arabia – went from 1,701 metric tons in the first two months of the year to zero in March. The true toll from the conflict should be evident in April’s data.
NEXT-assisted sales in April total 16 million pounds
The National Milk Producers Federation (NMPF) Export and Trade (NEXT) member cooperatives added 16 million pounds to 2026 sales in April.
The program secured 58 contracts in the month with the products going to 18 country destinations across Asia, North America, Oceania, MENA, South America, Central America and the Caribbean, which will be shipped from now through November.
To date, 471 contracts have been secured in 2026, the equivalent of more than 121 million pounds.
Robust month for dairy replacement, embryo exports
March was a robust month for exports of U.S. dairy replacement heifers. Up 61% from the month prior, March saw sales grow in North and South America with key destinations including Argentina, Mexico and Canada. Of those countries, Argentina made its first purchase of U.S. dairy replacement heifers in 2026 with 132 animal units, and Canada purchased 105 animal units, up from 26 animal units in February. Mexico was the lone country to import less U.S. dairy replacement heifers than the month prior, 121 animal units down from 186 in the previous month.
The month’s shipments bring the annual total of exported U.S. dairy replacement heifers to 616 animal units. Last year at this time, that volume was at 368 animal units.
A similar story was evident in U.S. dairy cattle embryo exports in March with exports up more than twofold from February. In total, 629 units were exported, up from 198 units in the previous month. Japan and Bangladesh led the charge with their first U.S. dairy cattle embryo imports for 2026 at 212 and 175 units, respectively. Another critical trading partner was Germany, having purchased 144 animal units, up for five in February.
At 629 units of U.S. dairy cattle embryo exports in March, it brings the year-to-date total to 1,027 units, behind the first quarter of 2025 when exports were recorded at 1,359 units.
U.S. forages move overseas
March’s exports of dairy-quality alfalfa hay were up 9% with the top three importers by volume all increasing purchases from the previous month. China was the largest importer, bringing in 67,685 metric tons of U.S. dairy-quality alfalfa hay, up 25% from February. More of the forage was also sent to Japan and South Korea, up 14% and 20%, respectively. Saudi Arabia, which has traditionally been a reliable trading partner for U.S. dairy-quality alfalfa hay, cut their imports by 45%, only bringing in 12,032 metric tons in March.
Year-to-date totals of U.S. dairy-quality alfalfa hay exports after the first quarter are at 449,914 metric tons.
Other U.S. hay exports also grew, up 5% in March for a total of 84,633 metric tons. Major purchasers included Japan, up 17% to 41,770 metric tons and South Korea, up 13% to 29,189 metric tons. The volume of exports of the forage sit at 244,428 metric tons at the end of the first quarter.
Trade deficit deepens
March’s U.S. agricultural trade balance was a deficit of $1.95 billion, up from $967 million in February. Exports for the month were recorded at $16.8 billion and imports $18.75 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 $6.79 billion.
