U.S. Dairy Exports Tighten Global Supply

Since the start of 2026, U.S. dairy exports have been tightening global skim milk powder balances despite strong milk production growth in the Northern Hemisphere. The United States is producing more milk than normal, yet less milk is reaching export channels in powder form. This shift is altering global trade flows at a time when buyers in Southeast Asia and Latin America remain highly sensitive to price volatility. The consequence is a global skim milk powder market that is more finely balanced than headline production data would suggest.

Nate Donnay, Director of Dairy Market Insight at StoneX, has spent years analyzing international dairy trade and monitoring skim milk powder flows across the United States, Europe, and Oceania. His focus on export competitiveness and product allocation gives him a direct view into how U.S. processing decisions translate into global supply availability in real time.

Key Themes from the Discussion

• About 70 percent of U.S. skim milk powder production is exported, magnifying the global impact of domestic supply shifts.
• U.S. shipments to Southeast Asia and Latin America could decline by roughly 50,000 metric tons in 2026.
• The projected reduction equals approximately 2 to 2.5 percent of the 2 million metric ton globally traded skim milk powder market.

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U.S. Skim Milk Powder Exports Reduce Global Availability

U.S. skim milk powder exports are declining in non-core destinations as domestic milk is diverted into cheese, yogurt, and high protein beverages. Donnay confirms that "the U.S. exports about 70% of our skim powder production", highlighting how central U.S. supply is to global trade. However, new cheese capacity and strong demand for alternative dairy products are keeping skim milk out of dryers, limiting surplus powder production. Consequently, even modest reductions in U.S. export volumes tighten global skim milk powder availability and shift demand toward European Union and New Zealand suppliers.

Global Skim Milk Powder Trade Adjusts to a 50,000 Ton Cut

Global skim milk powder trade has absorbed an estimated 50,000 metric ton decline in U.S. shipments since the start of 2026. Donnay explains that "the drop in shipments to those other destinations is going to be around 50,000 tons in 2026" and notes that this represents roughly 2 to 2.5 percent of the 2 million metric ton traded market. While not a structural deficit, this reduction is meaningful in a market that relies on steady export flows to maintain balance. As a result, growth in European and New Zealand skim milk powder production becomes critical in preventing further tightening and stabilizing international pricing relationships.

Frequently Asked Questions

How much US skim milk powder is exported?

Approximately 70 percent of U.S. skim milk powder production is exported, making global buyers highly sensitive to changes in US supply availability.

How large is the projected U.S. export reduction in 2026?

The expected decline is about 50,000 metric tons, equivalent to roughly 2 to 2.5 percent of the global traded skim milk powder market.

Will other exporters offset lower U.S. shipments?

Donnay indicates that increasing milk and skim milk powder production in Europe and New Zealand should help fill the gap, limiting the risk of a prolonged global shortage.

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--- Written by Lindo Xulu, StoneX TV Journalist

--- Expert: Nate Donnay, Director of Dairy Market Insight at StoneX