Cheese, Butter Exports Continue to Break Records; Commodity Markets Adjust to Iran War

We start out today with a look at dairy export results. Cheese and butter continue to dominate, and U.S. dairy exports have had positive YOY results for the past six months. In commodity markets, which direction the markets will go depends a lot on the war in Iran. Our financial news wrap up includes a positive outlook on the U.S. economy coming from the White House.

Transcript

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Hey everybody, welcome to Chapp E DC back with your three big stories across news and egg and financial markets. Today is Friday, May 8th, 2026. Today we're going to focus on dairy exports, commodities, and the war, and then a rather rosy outlook on the U.S. economy. So let's get to it. Start off with an update on dairy exports and all and all is good on that front. According to the U.S. Dairy Export Council, March 2026 represented the sixth straight month of year-over-year export growth. Year-over-year U.S. dairy products grew 8% in March, and milk solids equivalent as cheese and butterfat continue to drive volume. Exports have started the year out on a tear with volume raising nearly 11% in the first quarter. Cheese and butterfat exports each set new single-month records in March. Cheese shipments jumped 29% and combined exports of butter and anhydrous milk fat soared 110%. Gains were geographically widespread. Cheese shipments to our top two markets, which are Mexico and South Korea, rose an impressive 40 and 79%, respectively. On the butter side, shipments to the Middle East, North Africa rose 361%. Volume to South Korea increased 364%. Exports to Mexico gained 98%. Things weren't as rosy on the non-fat, dry milk, skim, milk powder front. Those exports fell to our top two customers in March, with Mexico down 7%, Southeast Asia falling 6%. While March volume was the highest of the past five months, the prior March was the biggest month of 2025. So after four straight year-over-year monthly gains, U.S. exports dropped back into the red in March with volume falling 8%. Ahead of the release of this latest data, the big question was how quickly the conflict with Iran and the closure of the Strait of Hormuz would impact U.S. exports to that area. March numbers suggest that it did take a toll on U.S. dairy trade. Most obvious example is Bahrain, which began ramping up U.S. butter purchasing in the last quarter of last year. U.S. exported 3,480 metric tons of butter there in the fourth quarter, then another 1,701 metric tons in the first two months of 2026, but in March that shipment total went to zero. By contrast, the U.S. shipped 1,893 metric tons of butter fat to Saudi Arabia in March, which was up 220% from the previous year. How much of that landed actually in the country is unknown. Year of a year U.S. cheese shipments to the Middle East fell 37% in March, but volume had already dropped 21% for January and February this year, so it remains unclear how much of March decline was actually attributed to the fighting. Switching gears to commodity markets, we turn to a report by Michelle Rook on agweb.com. She talked with Darren Newsom, senior market analyst for Bar Chart. He thinks the odds of a peace accord with Iran and reopening of that Strait of Hormuz are between slim and none. So while the funds are liquidating positions in the grains to shed some risk, it may not last, and that man, markets may need to adjust coming out of this weekend. Currently, the crude oil market is buying into the peace talks, and grains futures are falling as a result, especially corn and bean oil, which are biofuels derivatives. So how much lower will prices fall before finding chart support, especially as many contracts are nearing some key technical levels. But now these speculative traders are getting out. He says that the markets will have to come back to where there is some intrinsic value support and fundamental support. Newsom says that basically across the board, basis is weak. So the intrinsic value is weak in relation to where these futures markets have gone. That leaves a lot of room for liquidation. Leaves a lot of room for these markets to come down. He thinks there will be some buying coming out of the weekend in the energy sector sector, which will support soybean oil and soybeans, maybe even corn. So we'll have to wait and see how that comes out. Moving over to business news, White House National Economic Council Director Kevin Hassett says he believes the economy is entering a new growth phase, driven by capital spending, AI productivity gains, and tax policies aimed at accelerating domestic manufacturing. Comments come as companies pour billions into U.S.-based expansion projects tied to semiconductors, artificial intelligence infrastructure, and advanced manufacturing. Hassid pointed to major investments for multinational firms, including Novartis and Taiwan's semiconductor manufacturing company, has signs U.S. become the hot place to be right now. The administration's push to restore full expensing and bonus depreciation for factory construction and equipment has also sparked a rush to build projects before those incentives expire. Hassett also predicted strong economic growth through the rest of the year, arguing that recent import data reflects long-term investment in manufacturing equipment rather than weaker domestic demand. Well, that's all for now. As always, thanks for tuning in. If you found this news useful, please leave a comment, subscribe, share, and tell all your friends. Be back Monday with business news across Megan Financial Markets. Have a good weekend, everybody, and today we'll make an update and make a happy.