May proved to be another enthusiastic month for U.S. dairy exports, with the year-over-year volume growth streak now reaching eight consecutive months as exports rose 14% in milk solids equivalent terms. All of this is despite low nonfat dry milk/skim milk powder (NDM/SMP) shipments – due to steep price comparison – reigning in what might have been a record month.
It’s the global demand of U.S. dairy products coupled with U.S. suppliers’ willingness to meet that demand that have paved the way for year-to-date exports to rise 12.6% in volume compared to the same time period of last year. In monetary terms, that’s a $447 million increase to $4.32 billion for 2026 to date. All of this is detailed in the U.S. Dairy Export Council’s (USDEC) May trade data analysis.
Cheese, butterfat carry U.S. dairy exports in May
Both U.S. cheese and butterfat shipments showed continued growth across geographies in May.
In the cheese category, year-over-year exports increased by 18% to 61,409 metric tons. While not a record month, it still impressed as exports surpassed 60,000 metric tons for the third month in a row.
There were two countries that recorded the highest volume gains. Both South Korea and Mexico proved their desire for the U.S. dairy product with exports to those countries rising 3,495 metric tons and 2,629 metric tons, respectively, solidifying their position as top destinations for U.S. cheese for another month. Year to date, U.S. cheese exports to South Korea are up 41% (12,234 metric tons) and Mexico are up 29% (22,393 metric tons) when comparing the first five months of 2025.
Butterfat also had an impressive month with much of the U.S. product making its way through the Middle East via Saudi Arabia, resulting in year-over-year butterfat exports more than doubling in May to reach 15,158 metric tons. With the Strait of Hormuz closed, butter exports to Bahrain – and other key butterfat buyers – have essentially fallen to zero, while shipments to Saudi Arabia have skyrocketed. This was first noticed in April and continued to be the case in May as shipments to Saudi Arabia grew nearly five times (1,458 metric tons) to that of May a year ago.
May’s success was saved by cheese and butterfat exports as the strong U.S. NDM/SMP prices finally deterred international buyers toward lower prices in the European Union (EU) and New Zealand. This shift resulted in year-over-year exports of NDM/SMP plunging 20% (12,451 metric tons) in May as top markets declined more than 10%. No. 1 Mexico dropped 13% (4,638 metric tons), and No. 2 Southeast Asia dropped 11% (1,665 metric tons). These dives brought May exports to 49,713 metric tons, the worst May performance of the U.S. dairy export product since 2012, according to Sara Dorland of Ceres.
The one bright spot was shipments to the Philippines, with volume up 20% (1,079 metric tons) from May 2025. However, this is likely due to previously made contracts as USDEC first noticed in April.
In the months ahead, USDEC anticipates exports to regain strength as the price of U.S. NDM/SMP has become more aligned with prices in the EU and New Zealand throughout June, “which [when coupled with improving production volume so far this year] provides a glimmer of export optimism for the latter months of 2026.”
NEXT sales reach 34.6 million pounds in June
The National Milk Producers Federation (NMPF) Export and Trade (NEXT) member cooperatives added 34.6 million pounds to 2026 sales throughout the month of June.
The program secured 74 contracts in the month with the products going to 20 country destinations across Asia, North America, Middle East-North Africa, Oceania, South America and Central America, which shipped in June and will continue to be shipped through February 2027.
To date, 633 contracts have been secured in 2026, the equivalent of nearly 177 million pounds.
U.S. dairy heifer replacements, embryo exports rebound
After April’s sharp decline in U.S. dairy heifer replacement exports, animal units rebounded in May to reach the second-highest volume of 2026. May exports were 340 dairy replacements, just shy of March’s 358 replacements. Trading partners to the north and south carried the month’s export performance. While Canada actually imported four less animal units at 25, Mexico increased imports by nearly threefold to 315 U.S. dairy heifer replacements, up from 80 in April.
May’s data brings the year-to-date total U.S. dairy replacement exports to 1,111 animal units, more than doubled from last year’s 596 animal units from January to May in 2025.
U.S. dairy embryo exports also picked up in May, resulting in 533 units exported, up from 146 units the month prior. After a month with minimal shipments, May’s data shows Germany, Australia and the Netherlands resumed purchases. Germany led the charge with 203 embryos; followed by Australia at 58 units, built on April’s 18; and the Netherlands were at 35 embryo units, their largest import of U.S. dairy embryos to date in 2026. New buyers in May included Spain (94), Kenya (68), Argentina (43) and Hungary (10).
May’s exports bring the total year-to-date U.S. dairy embryo exports to 1,706 units. Over the same number of months last year, U.S. dairy embryo exports sat at 2,006 units.
Dairy-quality alfalfa exports drop
U.S. dairy-quality alfalfa hay exports fell 9% in May to 138,608 metric tons. Asia remained the top destination, but all three countries in that region – China, Japan and South Korea – recorded less purchases of the U.S. forage. The No. 1 destination was China with 56,252 metric tons of U.S. dairy-quality alfalfa hay imported, albeit 20% less than in April. Japan and South Korea each imported 9% and 8% less forage, respectively, at 30,257 metric tons and 21,396 metric tons. One destination to note is Saudi Arabia, which saw 18,434 metric tons of U.S. dairy-quality alfalfa hay cross into its borders, a 95% increase from the month prior and the highest volume since February.
The year-to-date total U.S. dairy-quality alfalfa hay exports is at 741,234 metric tons.
Other U.S. hay exports also fell, down 7% from the month prior to 72,264 metric tons. Japan and South Korea remained the top destinations, purchasing 37,400 metric tons and 20,408 metric tons, respectively. Yet, both also saw a decline from April, and South Korea’s was the most substantial, down 15%. The year-to-date volume of exports of other U.S. hay is at 394,761 metric tons.
Trade deficit remains unchanged
May’s U.S. agricultural trade balance was a deficit of $2.8 billion, unchanged from the month prior. Exports for May were recorded at $15.1 billion and imports at $18 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 $12.8 million.
