U.S. dairy export volume reached an all-time high in February (on a daily-average basis), led by a rebound in ingredient sales to Southeast Asia, record lactose exports to China and broad-based increases in overseas sales of cheese.

Suppliers shipped 204,453 tons of milk powder, cheese, butterfat,whey and lactose during the month, up 26% from March 2017. U.S.exports were valued at $510 million, 8% greater than in March 2017and the highest total value since April 2015.

Ingredient sales drove much of the gains. Shipments of nonfat dry milk/skim milk powder (NDM/SMP) to Southeast Asia were nearly double the prior-year level and sales to Mexico were the second-mostever. Shipments of lactose to China increased by 57% during the month and were at a record high.

Overall NDM/SMP exports were 67,154 tons, up 38% from last year. Sales to Mexico increased 43% from the previous year. (Official U.S. Bureau of Census data continues to show an increase in WMP exports to Mexico. However, Mexican import data and trade sources don't corroborate this, and we believe this volume represents SMP sales that were misclassified at the port. Therefore, we've adjusted NDM/SMP and WMP trade data for June 2016 to March 2018 to account for this misclassification.)

Lactose exports were 37,966 tons in March, the most ever, and 19% greater than levels a year earlier. Shipments to China (9,282 tons) led the gains and were 57% greater than what they were in March 2017.

Cheese exports were 33,844 tons in March, the most in ten months,and up 9% from a year earlier. U.S. suppliers increased sales to China (+56%) and Japan (+30%), which continued to offset slower sales to Mexico. Shipments to Mexico decreased 16% in March.

Total whey exports were 53,079 tons in March, up 19% vs. the prior year. Shipments of whey protein concentrate were at an all-time high while exports of dry whey were at a nearly four-year high.

Butterfat exports totaled 3,714 tons in March, up 180% from the year before. Sales to Canada were up 129%. Shipments to the Middle East also firmed and rose 279% against low comparable figures one year ago.

On a total milk solids basis, U.S. exports were equivalent to 17.3% of U.S. milk production in March. Imports were equivalent to just 3.0%.