U.S. Dairy Exports Recovered, but Powdered Milk Lost Ground
August marked a partial reversal of the 4% combined contraction recorded in June and July, according to data released by the U.S. Dairy Export Council (USDEC). Export value rose 10% from August 2025, while the recovery varied substantially by product category.
Cheese shipments reached 59,007 tonnes, an annual increase of 9%, or about 5,113 tonnes. It was the first month since March in which exports fell below 60,000 tonnes. USDEC said the price advantage enjoyed by American cheese over international competitors had begun to narrow, after unusually strong growth through much of 2025 and the early months of 2026.
Latin America supplied much of the cheese growth. Shipments to Mexico increased by 19%, adding roughly 3,095 tonnes; exports to South America rose 35%, or 1,035 tonnes; and deliveries to Central America grew 17%, adding 1,009 tonnes. By contrast, sales to South Korea, the second-largest market for U.S. cheese according to USDEC, fell 12%. Australia declined 10%, while shipments to the Middle East and North Africa decreased 23%.
Total dairy-fat exports fell 6% year on year. Butter shipments dropped 12%, a reduction of 975 tonnes, while anhydrous milk fat rose 11% and recorded its 26th consecutive month of annual growth. European demand weakened as local supply improved and prices fell. Mexico was a notable exception: U.S. dairy-fat shipments there jumped 1,050% in August, an increase of 2,222 tonnes. For the year to date, exports to Mexico were up 126%, or 11,318 tonnes, from the same period in 2025.
Skimmed milk powder, also known as NFDM/SMP, remained the weakest major category. Exports fell 19%, with the reduction approaching 10,916 tonnes. USDEC attributed the result mainly to restricted export availability in the United States and less competitive prices. Southeast Asian buyers turned more heavily to New Zealand and the European Union: shipments to the Philippines fell 90%, those to Vietnam declined 85%, and deliveries to Malaysia dropped 78%.
Exports of whey protein concentrate containing at least 80% protein, or WPC80+, decreased 21%, equivalent to 1,422 tonnes. Brazil recorded a 79% decline, while Japan and Canada reduced purchases by 38% and 25% respectively. USDEC also cited limited export supply for this result. In contrast, milk-protein concentrate exports rose 36% to 5,225 tonnes, their highest monthly volume in almost four years. Shipments to Brazil increased 533%, adding 673 tonnes, and sales to Japan rose from 2 tonnes in August 2025 to 222 tonnes a year later. USDEC said some producers of protein-fortified foods may be using milk-protein concentrate as an alternative when WPC80+ is less available and more expensive.
Lower-protein whey products also performed strongly. Shipments increased 25%, or 11,487 tonnes, across powdered whey, lower-protein concentrates and modified whey. Canada raised purchases by 183%, while Southeast Asia increased them by 46%. The August figures therefore showed different outcomes within the protein market, with supply, relative prices and the ability to substitute one ingredient for another affecting the distribution of sales. The data covered U.S. exports in August 2026 and were sourced from USDEC.
