LUBBOCK, TX – Strong export demand is helping absorb rising U.S. dairy production as domestic consumption remains uneven. The National Milk Producers Federation says international buyers are providing important support for cheese and butter markets as milk output continues to expand.
Cheese exports increased 24% in June, while butter exports were up roughly 90% through the first half of 2026. U.S. prices below competing European and New Zealand supplies helped attract foreign buyers.
That export demand is important because domestic cheese movement remains soft. Retail sales have shown little growth, while weaker restaurant traffic is limiting food-service demand and increasing pressure on cheese markets.
Butter demand has held up better, but production remains elevated. Greater milk supplies are allowing manufacturers to increase output even as exports absorb a larger share.
For dairy producers, continued export growth could help limit price pressure as milk production remains firm through the remainder of 2026.
Farm-Level Takeaway: Strong dairy exports are helping absorb additional production and support product prices despite uneven domestic demand.