Read the latest issue of Dairy Market Drivers, a bi-weekly report from IDFA partner Ever.Ag. Dairy Market Drivers features spotlight data, key policy updates, and a one-minute video that covers timely topics for the dairy industry.
Dairy Market Drivers: U.S. Agricultural Exports to China; Butter Supply and Demand; and Pizza in a Minute!
Quick Bites: Butter on the Move
- Butter trading has been unusually active at the CME this year. Since the start of 2026, 1,424 loads of butter have changed hands. That’s far above the 582 lots traded by this time last year and is chasing down the 1,654 loads traded in all of 2025. Sellers have product available, and buyers seem eager to snap it up.
- International demand is providing an outlet for growing butter supplies. According to March’s trade data, U.S. butter and butterfat exports totaled 25.0 million pounds, up 85.2% (+11.5 million pounds). Year-to-date shipments topped 67.5 million pounds, well ahead of 32.1 million at this time last year.
- Ample cream availability has kept butter churns running aggressively, but stocks are not building as quickly. In USDA’s most recent Cold Storage report, butter stocks totaled 308 million pounds in April, up 18 million pounds (+6.3%) from March but below the five-year average build of +27 million pounds between March and April.
- Still, there’s plenty of milk – and butterfat – to go around. U.S. milk production was up 2.7% year-over-year in April. And to close 2025, the average U.S. farm fat test climbed above 4.5% for the first time. As producers breed and feed for higher-component milk, they’re generating more protein and more butterfat, adding to cream availability and butter supplies.
- Last week alone, another 118 loads of butter were traded at the CME– the biggest weekly volume since the week ending March 27. With ample supply and falling prices, trading remains active as we head into Summer.
Today’s Special
- China is a major export destination for U.S. agricultural products. However, U.S. shipments to China slowed over the past two years following trade tension and on-again, off-again tariff threats between the two countries.
- But earlier this month, China reportedly committed to buying $17 billion worth of U.S. agricultural products in 2026, 2027 and 2028. This followed President Trump’s meeting with China’s President Xi to discuss trade opportunities. The $17 billion figure does not include a previous commitment to buy 25 million metric tons of U.S. soybeans over the next three years.
- In all, that would bring U.S. farm exports to China to around $28 to $30 billion annually. That’s below the peak of $38 billion in 2022 but higher than the $24 billion shipped in 2024. And in 2025, just $8 billion of agricultural exports headed to China, according to USDA. This opens windows for U.S. farmers, especially soybean growers who have been missing their biggest buyer.
- The White House also shared that China will restore market access for U.S. beef by renewing expired listings of more than 400 U.S. beef facilities. New listings will be added as well. This is positive news for dairy producers in terms of beef demand.
- What about dairy products? The White House fact sheet did not call out dairy exports specifically, but other press statements did, creating a pathway for China to regain its status as the third largest U.S. dairy export market after it dropped in 2025 China had traditionally been a big importer of milk powder, though more recently, powder purchases dropped off due to falling demand and greater domestic production. Year-to-date through April, China’s skim milk powder exports are down 24% from 2025. However, farmgate prices near breakeven levels are not likely to promote domestic milk production growth.
- New Zealand and the European Union are still China’s top dairy trade partners. But with a commitment to purchase additional U.S. goods, more competitively priced U.S. product may find its way on ships to China.