Executive Summary

U.S. dairy product production figures provided by the USDA were recently updated with values spanning through Feb ’21. Highlights from the updated report include:

• U.S. butter production finished 2.2% higher on a YOY basis throughout Feb ’21, remaining at a record high seasonal level for the eighth consecutive month.
• U.S. cheese production finished 4.7% higher on a YOY basis throughout Feb ’21, remaining at a record high seasonal level for the fourth consecutive month, while dry whey production finished higher on a YOY basis for the second time in the past three months, increasing 4.3%.
• Combined production of U.S. nonfat dry milk and skim milk powder increased 13.2% on a YOY basis throughout Feb ’21, remaining at a record high seasonal level for the seventh consecutive month. Nonfat dry milk production increased 21.2% YOY throughout the month, more than offsetting a 20.3% YOY decline in skim milk powder production.

Additional Report Details

Butter – Production Remains at a Record High Seasonal Level, Finishes up 2.2% YOY

According to the USDA, U.S. butter production finished 2.2% higher on a YOY basis throughout Feb ’21 when accounting for the previous year’s leap year, remaining at a record high seasonal level for the eighth consecutive month. The YOY increase in butter production was the 19^th experienced throughout the past 21 months. Higher butter production experienced throughout the Central U.S. (+4.3%) and Western U.S. (+1.4%) more than offset a reduction in Atlantic U.S. (-1.3%) production experienced throughout the month.

’19-’20 annual butter production increased 5.6% YOY, reaching the highest annual level on record for the third consecutive year. ’20-’21 YTD butter production has increased by an additional 6.0% on a YOY basis throughout the first five months of the production season.

Cheese – Production Remains at a Record High Seasonal Level, Finishes up 4.7% YOY

U.S. cheese production finished 4.7% higher on a YOY basis throughout Feb ’21 when accounting for the previous year’s leap year, remaining at a record high seasonal level for the fourth consecutive month and reaching a record high monthly level on a daily average basis. The YOY increase in cheese production was the seventh experienced throughout the past nine months and the largest experienced throughout the past 28 months on a percentage basis. YOY increases in cheese production were widespread regionally and led by the Atlantic U.S. (+11.4%), followed by the Central U.S. (+6.4%) and Western U.S. (+1.0%).

Cheddar cheese production increased 3.3% on a YOY basis throughout the month while other-than-cheddar cheese production finished 5.3% higher. The YOY increase in cheddar cheese production was the 12^th experienced throughout the past 13 months.

’19-’20 annual cheese production reached a record high annual level for the 19^th consecutive year, although the production growth rate of <0.1% was the smallest experienced over the 19 year period. Cheddar cheese production increased 1.1% throughout the year, more than offsetting a 0.4% YOY decline in other-than-cheddar cheese production. ’20-’21 YTD cheese production has increased by an additional 1.5% on a YOY basis throughout the first five months of the production season.

Dry Whey – Production Increases YOY for the Second Time in the Past Three Months, up 4.3%

U.S. dry whey production increased 4.3% on a YOY basis throughout Feb ’21 when accounting for the previous year’s leap year, finishing above previous year levels for the second time in the past three months. Higher dry whey production experienced throughout the Atlantic U.S. (+10.5%) and Central U.S. (+6.3%) more than offset lower Western U.S. (-3.7%) production experienced throughout the month.

Combined whey protein concentrate (WPC) and whey protein isolate (WPI) production finished higher on a YOY basis for the third consecutive month during Feb ’21, increasing by 12.6%. Combined WPC and WPI production had finished lower on a YOY basis over 17 of the 18 months through Nov ’20, prior to finishing higher on a YOY basis over the three most recent months of available data. The Feb ’21 YOY increase in combined WPC and WPI production was the largest experienced throughout the past 35 months on a percentage basis. Combined production of dry whey, WPC and WPI increased 7.3% on a YOY basis throughout the month, finishing higher for the third consecutive month.

’19-’20 annual dry whey production rebounded 1.1% YOY from the four year low level experienced throughout the previous production season. ’20-’21 YTD dry whey production has declined by 4.1% on a YOY basis throughout the first five months of the production season, however, despite the most recent increase, and is on pace to reach a six year low level.

NFDM/SMP – Combined Production Remains at a Record High Seasonal Level, up 13.2% YOY

U.S. nonfat dry milk (NFDM) production increased 21.2% on a YOY basis throughout Feb ’21 when accounting for the previous year’s leap year, finishing at a record high seasonal level for the fourth consecutive month and reaching the second highest monthly level on record on a daily average basis. The YOY increase in NFDM production was the seventh experienced in a row and the second largest experienced throughout the past six years on a percentage basis. Higher NFDM production experienced throughout the Western U.S. (+29.2%) and Central U.S. (+17.9%) more than offset lower Atlantic U.S. (-5.0%) production experienced throughout the month.

Production of skim milk powder (SMP), which is more suited to the requirements of most global markets, finished lower on a YOY basis for the third consecutive month during Feb ’21, declining by 20.3%. Combined production of NFDM and SMP finished 13.2% above previous year levels, remaining at a record high seasonal level for the seventh consecutive month, as the increase in NFDM production more than offset the reduction in SMP volumes. The YOY increase in combined production of NFDM and SMP was the seventh experienced in a row and the largest experienced throughout the past 14 months on a percentage basis.

’19-’20 annual combined production of NFDM and SMP increased 5.2% YOY, reaching a record high level for the fourth consecutive year. NFDM production increased 3.2% YOY but remained slightly below historical highs, while SMP increased 11.7%, reaching a record high annual level. ’20-’21 YTD combined production of NFDM and SMP has increased by an additional 9.8% on a YOY basis throughout the first five months of the production season as a 16.1% YOY increase in NFDM production has more than offset a 10.1% YOY decline in SMP production.

Overall, nonfat dry milk production remained most significantly higher YOY on a percentage basis throughout Feb ’21, while skim milk powder production declined most significantly on a percentage basis throughout the month.