Mexico Remains Top U.S. Dairy Export Market 🌎

MARKET NEWS

Mexico Remains Top U.S. Dairy Export Market 🌎

Daily Dairy Report | September 4, 2026

Mexico has been the largest export destination for U.S. dairy products by far, accounting for 27% and 14% of export value, respectively. U.S. dairy shipments to Mexico have surged in recent years, climbing 84% from $1.4 billion in 2020 to $2.575 billion in 2025. Nonfat dry milk (NDM) and cheese made up 41% and 38% of the value of U.S. dairy exports to Mexico in 2025.

On a volume basis, Mexico retained the top position as an export destination, accounting for 27% of U.S. dairy export volume in 2025. NDM and cheese represented nearly 50% and 27% of Mexico’s dairy imports. The country’s purchases of NDM and cheese from the U.S. represented 38% and 3% of annual U.S. production of those products in 2025.

Because of its proximity, the Mexican market is often viewed as an extension of the U.S. dairy market. For some exporters in the West and Southwest, shipping to Mexico is closer than shipping to the East Coast. Mexico’s dairy sector generally treats U.S. imports as part of its domestic supply chain, using NDM in rehydrated form to manufacture fluid beverages, soft dairy products and cheese.

Mexico’s large and growing dairy market continues to attract interest from other exporting regions. A trade agreement is pending between Mexico and the European Union, whichwould expand EU access to Mexico’s dairy market. The agreement, signed May 22, 2026, is awaiting ratification by Mexico’s Congress. It would reduce Mexican duties from 45% to zero on 5,000 metric tons (11 million pounds) of fresh or processed cheese and 20,000 metric tons (44 million pounds) of other cheeses. It also grants European suppliers a 55,000 metric ton duty free quota for skim milk powder, equal to roughly 13% of U.S. NDM exports to Mexico.

The United States is accustomed to unfettered access to Mexico’s dairy market under free trade agreements dating back to the 1990s and, more recently, the USMCA. U.S. officials are objecting to provisions in the Mexico EU agreement that grant Europe special protections for 336 traditional product names, including Parmigiano Reggiano, Feta, Fontina and Gorgonzola. The EU argues these names should be reserved for products made in their regions of origin, while the U.S. maintains they are generic. As a result, the U.S. is pressuring Mexico to amend the agreement, while the European Commission says revisions are not possible. If the EU position prevails, U.S. exporters could be forced to label their products as “imitation” or “style.”

At stake is more than the 25,000 metric tons (55 million pounds) of cheese covered by the agreement—about 12% of U.S. cheese exports to Mexico. The outcome could set a precedent in one of the world’s largest cheese import markets for future trade agreements and further restrict access to other markets for specialty cheeses produced outside Europe.

CME spot dairy product prices closed the week mixed. Most noteable was the large volume of product exchanging hands, 82 loads of butter, 51 loads of block Cheddar, and 29 loads of NDM.

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