Mexico Solidifies Position as Top U.S. Dairy Export Market
Source: DairyNews.today
Mexico continues to dominate as the leading importer of U.S. dairy products, accounting for more than 25% of all American dairy exports, according to the latest trade data. This robust relationship has strengthened significantly under the U.S.-Mexico-Canada Agreement (USMCA), driving substantial growth in exports, particularly for cheese and nonfat dry milk.
In 2023, Mexico purchased $2.32 billion in U.S. dairy products, representing one-fourth of all U.S. dairy exports. By September 2024, that share had risen to 29%, with Mexico sourcing over 80% of its imported dairy products from the U.S., USDA Foreign Agricultural Service data shows.
Cheese has emerged as a key growth driver. From January to September 2024, U.S. cheese exports to Mexico totaled 314 million pounds, marking a 32.4% year-over-year increase. This surge outpaced overall U.S. cheese export growth of 19% during the same period. Mexico now accounts for 37% of all U.S. cheese sold internationally.
“Cheese exports to Mexico have been a consistent growth story,” said Corey Geiger, lead dairy economist for CoBank. “This trend is not a flash in the pan—exports grew by 17.9% in 2022 and 15.4% in 2023 during the first nine months of each year.”
Nonfat dry milk and skim milk powder also remain critical export categories, with Mexico purchasing 51.5% of U.S. exports in this segment in 2023.
Strong Demand, Strong Potential
Mexico’s growing middle class and rising dairy consumption are driving demand. From 2011 to 2023, per-capita dairy consumption in Mexico rose by 50 pounds of milk equivalent, a 20% increase, compared to an 8.3% rise in the U.S. over the same period.
Despite this growth, the average Mexican consumer still consumes only 45% of the dairy products consumed by the average American, highlighting significant untapped potential in the Mexican market.
“Mexico faces a dairy product deficit of 25% to 30%, creating opportunities for U.S. exporters as Mexican consumers increasingly demand higher-quality proteins and fats,” Geiger said.
Challenges and Uncertainty Ahead
While the U.S. dairy industry anticipates growth, potential policy shifts following the 2024 election could impact trade dynamics. “Topics like tariffs, immigration, and deportation could shape future trade opportunities,” Geiger noted.
With nearly $8 billion in new dairy processing capacity coming online by 2026, including major cheese plants in the Central Plains and Southwest, the U.S. is well-positioned to meet global demand. However, the ability to navigate geopolitical and trade uncertainties will be critical.
“Exports are vital to U.S. dairy farmers and processors, with 16% of all milk produced now destined for international markets,” Geiger said. “Mexico’s continued role as a key customer will be central to the industry’s growth trajectory.”
Cheese has emerged as a key growth driver. From January to September 2024, U.S. cheese exports to Mexico totaled 314 million pounds, marking a 32.4% year-over-year increase. This surge outpaced overall U.S. cheese export growth of 19% during the same period. Mexico now accounts for 37% of all U.S. cheese sold internationally.
“Cheese exports to Mexico have been a consistent growth story,” said Corey Geiger, lead dairy economist for CoBank. “This trend is not a flash in the pan—exports grew by 17.9% in 2022 and 15.4% in 2023 during the first nine months of each year.”
Nonfat dry milk and skim milk powder also remain critical export categories, with Mexico purchasing 51.5% of U.S. exports in this segment in 2023.
Strong Demand, Strong Potential
Mexico’s growing middle class and rising dairy consumption are driving demand. From 2011 to 2023, per-capita dairy consumption in Mexico rose by 50 pounds of milk equivalent, a 20% increase, compared to an 8.3% rise in the U.S. over the same period.
Despite this growth, the average Mexican consumer still consumes only 45% of the dairy products consumed by the average American, highlighting significant untapped potential in the Mexican market.
“Mexico faces a dairy product deficit of 25% to 30%, creating opportunities for U.S. exporters as Mexican consumers increasingly demand higher-quality proteins and fats,” Geiger said.
Challenges and Uncertainty Ahead
While the U.S. dairy industry anticipates growth, potential policy shifts following the 2024 election could impact trade dynamics. “Topics like tariffs, immigration, and deportation could shape future trade opportunities,” Geiger noted.
With nearly $8 billion in new dairy processing capacity coming online by 2026, including major cheese plants in the Central Plains and Southwest, the U.S. is well-positioned to meet global demand. However, the ability to navigate geopolitical and trade uncertainties will be critical.
“Exports are vital to U.S. dairy farmers and processors, with 16% of all milk produced now destined for international markets,” Geiger said. “Mexico’s continued role as a key customer will be central to the industry’s growth trajectory.”
