Year-on-year (YOY) US dairy exports fell for the second straight month in July in a mixed bag of category-by-category results, the US Dairy Export Council (US DEC) reports. While products such as cheese and butterfat extended their growth streaks, tight exportable supplies of dairy proteins continued to limit US participation in whey protein concentrate (low- and high-protein WPC) and nonfat dry milk/skim milk powder (NFDM/SMP) markets.

Total US exports fell 5% in milk solids equivalent (MSE) terms compared to the previous July, while YOY export value jumped 16% to $984 million (€846.6m). The July numbers put year-to-date MSE export volume up 9% and value up 12%.

US cheese shipments continued to soar. July exports rose 25% to 65,256 metric tons (MT), a new monthly high. All major destinations posted double-digit gains: Mexico +28% (+4,914 MT); South Korea +34% (+2,052 MT); Australia +59% (+2,006 MT); South America +70% (+1,553 MT). Smaller markets expanded similarly.

Exports to the UAE recorded the largest YOY decline in July (-86%, -427 MT), but US suppliers continue to find alternative paths to market, primarily through Saudi Arabia. A YOY 89% increase (+713 MT) to Saudi Arabia helped lift cheese exports to the Middle East by 19% (+327 MT).

Overall US butterfat exports (butter and anhydrous milkfat or AMF) rose for the 26th straight month, but growth sharply slowed to just +1% (+166 MT). The increase was solely due to AMF gains (+23%, +873 MT). Year-on-year, butter exports fell for the first time since May 2024: -8% (-706 MT).

One reason for the slowdown is that we are starting to lap stronger prior-year performances. Of greater weight, global butter supplies have been rising for some months, and the US price advantage has eased. In 2025, elevated prices and extremely tight butter markets in Europe drove the atypical movement of US volume to the EU, for example, with the Netherlands buying nearly 6,000 MT over the course of the year, including 1,245 MT in July 2025. By contrast, the Netherlands averaged less than 80 MT per year in US butter purchases for the decade prior to 2025 and imported zero butter in July 2026. A repeat of 2025’s performance in Europe is unlikely under current market conditions.

Even though many key potential butterfat growth markets continued to show promise in July (including the Middle East/North Africa and Mexico), YOY butterfat growth is likely to be more challenging through the year-end.

YOY low-protein whey exports increased 19% (+8,419 MT), as dry whey shipments remained strong. The low-protein whey category comprises three HS Codes: dry whey, low-protein WPC, and modified whey. US low-protein WPC exports have struggled all year as processors opted to make higher protein products (WPC80+) to satisfy US and global demand. YOY low-protein WPC exports fell 28% in July (-3,719 MT). (And even with manufacturers prioritizing high-protein whey production, increased domestic demand is similarly limiting US WPC80+ exports, which fell by 11% (-774 MT) in July and were down 19% year to date.)

Dry whey, however, remains on track to surpass a 15-year-old annual record. YOY shipments of dry whey soared 76% in July (+12,328 MT), and year-to-date shipments were up by more than 50% (greater than 120,000 MT). In July, YOY exports to China doubled (+6,042 MT); shipments to Canada rose 353% (+4,171 MT); and exports to Japan jumped 508% (+971 MT)