Historically, China has been a vital part of the U.S. export demand for dairy products. They are ranked third among U.S. agricultural export markets according to USDA, and have been third in dairy — behind Mexico and Canada — in purchases from the U.S.
In 2024, China purchased $583.6 million in U.S. dairy products, over $30 million more than their 10-year average, with a total volume of 385,609 metric tons. They have grown their demand of U.S. dairy products 29% in the last 10 years.
When comparing 2024 to 2025, January to July purchases have been slightly higher in 2025 than 2024, solely on the back of whey, casein, and “other dairy products”, while cheese, non-fat dry milk and ice cream are all significantly behind last year.
While in line with the 10-year average, China has drastically reduced U.S. dairy product demand since the highs they imported in 2021 and 2022 — nearly $220 million less in 2024 than the high of $802.8 million reached in 2022. The growth from the Phase I Trade Deal can be tracked from 2020 through 2023, with many dry products, such as milk powder, peaking in 2021 then sharply falling off in 2024 due to an oversupply of product in China as well as tensions flaring between the two countries, eventually leading to tariffs and retaliatory tariffs announced in early 2025.
To put this in perspective, we exported $8.25 billion worth of dairy products in 2024 with a total volume of 2.66 million metric tons. To Mexico, $2.47 billion worth of dairy products was exported and Canada purchased $1.18 billion. So while China is ranked third, the demand there is overshadowed by our neighbors.
Still, with the bleak outlook dairy markets have been stuck in for the last several months, should China return to volumes seen just three or four years ago, it would certainly help support dairy prices. Especially with the increase in demand from the EU as seen more recently.
Unfortunately, the possibility of a trade deal with China isn’t the only foreign affairs to keep an eye on, as we took a major step back last week in discussions with Canada, our No. 2 importer of dairy products. For dairy specifically, the formal review of the United States-Mexico-Canada Agreement is expected to happen in 2026. One of the concerns President Trump has called out in the past is the quota system, which has been deemed as unfair to the American dairy producer. The tensions are high as Trump called off trade talks last week over an anti-tariff advertisement featuring a Reagan-era clip opposing tariffs. The Ronald Reagan Presidential Foundation and Institute had an official statement, claiming the ad misrepresents the presidential radio address used from 1987 and the Government of Ontario did not have permission to use or edit the remarks. For now, it’s one step forward and one step back as negotiation results are still to be determined.
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