Mexico is the U.S. dairy’s most dependable export market, with consumer demand in Mexico outpacing the country’s production. Mexico purchases 4.5% of U.S. milk production and there is room for long-term growth.

Mexico faces an annual dairy shortage of 25% to 30%, with the U.S. supplying over 80% of that shortfall. CoBank Lead Dairy Economist Corey Geiger stated that there is potential for growth in dairy sales as consumers enter the middle class, seeking higher-quality proteins and fats.

U.S. dairy is well positioned for increasing demand as production will increase over teh next two years due to a $8 billion investment in new processing plants. Nearly 20 million pounds of additional milk will enter production by mid-2025. This will result in more cheese, whey, and dairy proteins for export.

Currently, milk from one in six U.S. tanker trucks is processed into dairy products for international markets. Trade agreements have played a critical role in this growth. Before NAFTA in 1994, U.S. dairy exports to Mexico were only $211 million. By 2011, Mexico became the first $1 billion U.S. dairy market. Exports exceeded $2 billion in 2022 under the USMCA.

The USDA reports exports reached 1.38 billion pounds in 2023, with a 10-year growth rate of 42%. Industry leaders anticipate Mexico will continue absorbing a significant share of U.S. dairy production.

Read more on dairy exports to Mexico here.