US Dairy Industry Expands Exports, School Milk Access and Processing Capacity
US dairy exports reached $9.5 billion in 2025, the second-highest annual value on record, according to the reported update. The sector’s international expansion has been supported by 20 bilateral trade frameworks and market agreements, which reportedly helped halve the projected agricultural trade deficit.
Export values increased by another 12% in 2026, alongside double-digit volume growth in emerging markets in Asia and Latin America. International sales include American cheese, nonfat dry milk, whey isolates and butterfat. These products allow processors to market separate milk components as ingredients and consumer goods.
Export access gives cooperatives and private processors additional sales channels beyond the domestic market. The reported update said that the effect on farmgate milk prices would depend on production costs, market conditions and product pricing.
Federal policy has also changed the options available in school food programmes. The Whole Milk for Healthy Kids Act restored flexibility for local school districts to purchase and serve whole milk, alongside reduced-fat dairy products supported by updated Dietary Guidelines. The USDA’s “Harvest to Hallways” initiative is intended to connect regional dairy producers with institutional cafeterias through direct procurement arrangements.
School meal programmes provide an outlet for fluid milk and could affect the use of Class I milk, which is designated for drinking milk. The practical effect of the policy changes will depend on district participation, purchasing arrangements, student demand and implementation. The measures add whole-milk varieties to the choices available to schools but do not require every district to serve them.
The industry has reportedly committed more than $14 billion to building, expanding and modernising processing facilities across the United States. Projects include automated cheese plants, aseptic bottling operations and whey-fractionation facilities. Cheese manufacturing uses substantial milk volumes, while whey processing produces specialised ingredients for food and nutrition applications; aseptic bottling is used for products requiring extended shelf life and wider distribution.
The USDA’s Dairy Business Innovation Initiatives continue to offer matching funds to eligible small and medium-sized dairy companies. The programmes support value-added products, advanced packaging and regional marketing. Together with export activity, school procurement changes and private investment, the initiatives cover trade, fluid-milk consumption and processing infrastructure across the dairy supply chain.
