The U.S. dairy industry has been on an exhilarating upswing, driven by robust exports in key categories such as cheese and butterfat. This remarkable performance was highlighted in June when year-over-year milk solids equivalent volume surged by 15%, elevating total U.S. dairy exports by 1.2% on a year-to-date basis. The surge in exports has also been mirrored in export value, which increased by 15% to reach $4.72 billion, underscoring the strong international demand for U.S. dairy products.
Monica Ganley, senior director of global trade analysis with the U.S. Dairy Export Council, attributes the uptick to improved U.S. milk production alongside tepid domestic demand, which has kept U.S. product prices affordable for global buyers. In particular, cheese has stood out, with international markets showing a voracious appetite for U.S. offerings.
“This combination has resulted in plentiful supply as well as very competitive prices for U.S. products compared to other international suppliers. In some cases, especially cheese, international demand has also been robust, which has further helped to drive export sales to a record high in June in the case of cheese,” she says.
The China Factor
A significant component of this export boost has been the pause in tariff tensions between the U.S. and China, which rejuvenated Chinese purchasing.
“I would remiss if I did not mention that in June, we also saw a recovery of certain products (low protein whey, lactose) for which volumes had tumbled in April and May during the trade conflict between the U.S. and China,” Ganley shares. “After a tumultuous start to the year, these products rebounded sharply in June with year-over-year growth, propelling overall export figures.”
Consistently Strong Performers
Cheese continues to be the star of the show, with June setting another record for U.S. cheese exports. This success is fueled by strong global cheese demand, allowing the U.S. to leverage logistical advantages and favorable trade relationships to meet global needs. With cheese production increasing by 2.2% in the first half of the year, the U.S. has remained competitive as an affordable supplier.
Ben Laine, Terrain dairy analyst believes that we’re going to continue to see high component levels at the farm level.
“There’s still really strong demand overall for dairy fat,” he shared with Dairy Herd Management. “I don’t think that’s changing.”
In fact, butterfat exports have echoed cheese’s ascent, with a dramatic rise of 151% in the first half of 2025 compared to the previous year. This growth is attributed to competitive pricing and increased global share, especially against European suppliers.
Facing the Challenges
Despite these successes, the year has not been without its hurdles. Low-protein whey, for instance, has faced volatility due to trade tensions with China, although a midyear rebound has been encouraging. However, some regions like Japan and Mexico saw significant drops in their whey imports earlier in the year, posing potential challenges to maintaining export momentum.
Looking ahead, while the outlook for U.S. dairy exports appears promising, significant risks remain, particularly from trade policies and economic uncertainties. Nevertheless, with a strong foundation laid in the first half of the year, 2025 is shaping up to be a banner year for U.S. dairy products on the global stage.
“We are optimistic that strong milk production and competitive prices will continue to drive exports over the balance of the year, but we do recognize that there are significant risks to the outlook,” Ganley says. “Uncertainty is pervasive and has the potential to upend global demand and negatively impact some of the dynamics that have made the U.S. the supplier of choice up to now.”
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