Executive Summary

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

• U.S. butter production finished below previous year levels for the first time in the past three months throughout Jul ’21, declining by 0.8%.
• U.S. cheese production finished 3.5% higher on a YOY basis throughout Jul ’21, reaching a record high seasonal level for the eighth time in the past nine months, despite cheddar cheese production finishing below previous year levels for the first time in 13 months. Dry whey production remained lower on a YOY basis for the 11^th time in the past 13 months, however, finishing down 2.3% and reaching a seven year low seasonal level.
• Combined production of U.S. nonfat dry milk and skim milk powder declined 8.4% on a YOY basis throughout Jul ’21, reaching a three year low seasonal level. Nonfat dry milk production declined 5.3% on a YOY basis throughout the month while skim milk powder production finished 16.8% below previous year levels.

Additional Report Details

Butter – Production Finishes Lower on a YOY Basis for the First Time in Three Months, Down 0.8%

According to the USDA, U.S. butter production declined seasonally to an 11 month low level while finishing 0.8% lower on a YOY basis. The YOY decline in butter production was the first experienced throughout the past three months. YOY declines in butter production experienced throughout the Atlantic U.S. (-16.9%) and Western U.S. (-7.2%) more than offset a 13.3% YOY increase in Central U.S. production.

’19-’20 annual butter production increased 5.9% YOY, reaching the highest annual level on record for the third consecutive year. ’20-’21 YTD butter production has increased by an additional 1.8% on a YOY basis throughout the first ten months of the production season, despite the most recent decline.

Cheese – Production Reaches a Record High Seasonal Level, Finishes up 3.5% YOY

U.S. cheese production finished 3.5% higher on a YOY basis throughout Jul ’21, reaching a record high seasonal level for the eighth time in the past nine months. An 8.7% YOY increase in Central U.S. cheese production more than offset a 4.7% YOY decline in Atlantic U.S. cheese production. Western U.S. cheese production finished flat on a YOY basis throughout the month.

Other-than-cheddar cheese production increased 5.1% on a YOY basis throughout the month, more than offsetting a 0.3% YOY decline in cheddar cheese production. The YOY decline in cheddar cheese production was the first experienced throughout the past 13 months.

’19-’20 annual cheese production finished less than 0.1% above previous year levels, increasing on a YOY basis for the 19^th consecutive year. Cheddar cheese production increased 0.7% throughout the year, offsetting a 0.2% YOY decline in other-than-cheddar cheese production. ’20-’21 YTD cheese production has increased by an additional 2.9% on a YOY basis throughout the first ten months of the production season and is on pace to reach a record high annual level.

Dry Whey – Production Declines YOY for the 11^th Time in the Past 13 Months, Down 2.3%

U.S. dry whey production declined 2.3% on a YOY basis throughout Jul ’21, finishing below previous year levels for the 11^th time in the past 13 months and reaching a seven year low seasonal level. Lower dry whey production experienced throughout the Western U.S. (-21.6%) and Central U.S. (-6.4%) more than offset higher Atlantic U.S. (+9.3%) production experienced throughout the month. Previous month dry whey production volumes were revised 11.5% below levels previously stated.

Combined whey protein concentrate (WPC) and whey protein isolate (WPI) production finished higher on a YOY basis for the seventh time in the past eight months during Jul ’21, increasing by 0.9%. Combined production of dry whey, WPC and WPI remained 1.1% lower on a YOY basis throughout Jul ’21, however, finishing below previous year levels for the third consecutive month.

’19-’20 annual dry whey production rebounded 0.2% YOY from the four year low level experienced throughout the previous production season. ’20-’21 YTD dry whey production has declined by 5.2% on a YOY basis throughout the first ten months of the production season, however.

NFDM/SMP – Combined Production Declines to a Three Year Low Seasonal Level, Down 8.4% YOY

U.S. nonfat dry milk (NFDM) production declined 5.3% on a YOY basis throughout Jul ’21, reaching a three year low seasonal level. The YOY decline in NFDM production was just the second experienced throughout the past 12 months. Lower NFDM production experienced throughout the Western U.S. (-15.9%) more than offset higher Central U.S. (+15.9%) and Atlantic U.S. (+4.2%) production experienced throughout the month. Previous month NFDM production volumes were revised 11.5% below levels previously stated.

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 eighth consecutive month during Jul ’21, declining by 16.8%. Previous month SMP production volumes were revised 33.1% above levels previously stated, however, while previous year SMP production volumes were revised 19.8% higher. Combined production of NFDM and SMP production finished 8.4% below previous year levels, reaching a three year low seasonal level.

’19-’20 annual combined production of NFDM and SMP increased 7.8% YOY, reaching a record high level for the fourth consecutive year. ’20-’21 YTD combined production of NFDM and SMP has increased by an additional 5.5% on a YOY basis throughout the first ten months of the production season, despite the most recent decline, as a 12.9% YOY increase in NFDM production has more than offset a 17.3% YOY decline in SMP production.

Overall, other-than-cheddar cheese production finished most significantly higher YOY on a percentage basis throughout Jul ’21, while skim milk powder production declined most significantly on a percentage basis throughout the month.