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U.S. dairy exports reached a record-high volume in 2018, increasing 9 percent over the prior year despite retaliatory tariffs from Mexico and China, weak commodity markets and a fourth-quarter slowdown.

Suppliers shipped 2.188 million tons of milk powders, cheese, butterfat, whey products and lactose in 2018, and total dairy exports added up to 1.993 million tons (4.394 billion lbs.) of total milk solids. The value of U.S. exports was $5.59 billion, 2 percent more than the prior year. 

Exports rose to the equivalent of 15.8 percent of U.S. milk solids production in 2018, the highest percentage ever in a calendar year.

Over the previous three years, exports were equivalent to 14.2 percent of production.

U.S. export gains were led by record shipments of dry ingredients: nonfat dry milk/skim milk powder (NDM/SMP), high-protein whey products and lactose. However, performance was dimmed by a fourth-quarter slump, during which volume declined 11 percent year-over-year, after posting a 16 percent increase in the first three quarters.

In addition, the U.S. reclaimed the title of the world’s largest single-country cheese exporter.

Loss of sales to China—America’s third-largest single-country market—followed mid-year retaliatory tariffs, playing a role in the year-end decline. U.S. sales to China were up 17 percent in the first half of the year but fell 33 percent in the second half—a drop of more than 10,400 tons of product per month. Exports to Southeast Asia also faded toward year-end, sliding 18 percent in November-December, while shipments to Japan were down 10 percent throughout the second half.

Mexico and Southeast Asia remained the top two overseas destinations for U.S. dairy products in 2018, accounting for 39 percent of total export value. Canada, China and South Korea rounded out the top five markets. Among other markets, U.S. suppliers posted increased sales last year to the Middle East/North Africa (MENA) region and the Caribbean.

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