Almost 4.4 billion pounds of U.S. dairy products have been exported year-to-date through October, according to the United States Dairy Export Council. That’s up 2% or 83 million pounds over the same period for 2023. The sale of U.S. dairy products to our foreign customers is critical for the U.S. dairy industry and can happen at this accelerating pace with price competitive products.

Competition among the top three exporters

U.S. butter and cheese are selling well below prices from the other top two dairy export players, New Zealand and the European Union (EU). All the while, U.S. whey proteins are selling at prices higher than whey produced in those regions. This makes for a unique market situation.

In 2024, only from mid-August through early September were U.S. cheese prices higher than the EU and New Zealand. The price spread between the U.S. and the EU and New Zealand prices sat between 40 cents and 50 cents per pound in January and March. That spread has widened through November and December to between 45 cents and 60 cents per pound. Because cheese from New Zealand and the EU is more expensive, the U.S. is well-positioned with a competitive advantage in the cheese export market.

European butter became increasingly more expensive than U.S. butter over the last year. The one caveat of comparing U.S. and EU and New Zealand butter products is that U.S. butter is based on an 80% butterfat content while the EU and New Zealand export butter with 82% butterfat. Back in January, EU butter was only $2.53 per pound, compared to $2.65 per pound in the U.S. and $2.47 per pound in New Zealand. However, EU butter prices rose more than $1 to hit $3.62 per pound in early December. After trading for nearly $3 per pound during a six-month window, U.S. butter slipped to $2.53 per pound and New Zealand climbed higher but stalled at $3 per pound. This means the U.S. is currently enjoying a $1.09 per pound price spread advantage over the EU for butter.

Whey protein prices in the EU have remained roughly flat in 2024, hovering between 29 cents and 40 cents per pound. Meanwhile, U.S. whey protein prices skyrocketed from a 35-cent per pound low in April to a 71-cent per pound high in early December. So, unlike the cheese and butter export markets, the U.S. does not have the price competitive advantage in the whey protein market.

Dairy exports are moving on up

Exports of U.S. cheese have been a highlight for the dairy industry in 2024. Through October, over 941 million pounds of U.S. cheese have been shipped to international customers. With two months of data left to collect this year, the one billion pound record that has yet to be reached in a one-year time frame should be surpassed once the November data comes in. U.S. butterfat exports are up 18.6% or 13 million pounds at 80 million pounds year-to-date in October 2024 versus the prior year. Although whey protein prices are not in favor of the U.S., we have still exported 951 million pounds so far in 2024, up 6% or 53 million pounds from last year.

Time and markets will tell how much consumers are willing to fork over for their dairy products. But for now, the U.S. is providing favorably priced and high-quality proteins and fats that consumers across the globe are demanding.