Executive Summary

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

• U.S. butter production declined seasonally to a two year low level throughout Aug ’21, finishing 1.7% below previous year levels.
• U.S. cheese production finished 4.4% higher on a YOY basis throughout Aug ’21, remaining at a record high seasonal level for the ninth time in the past ten months, despite cheddar cheese production finishing below previous year levels for the first time in 14 months. Dry whey production remained lower on a YOY basis for the 13^th time in the past 15 months, however, finishing down 3.3% and reaching a seven year low seasonal level.
• Combined production of U.S. nonfat dry milk and skim milk powder declined 15.6% on a YOY basis throughout Aug ’21, remaining at a three year low seasonal level. Nonfat dry milk production declined 17.0% on a YOY basis throughout the month while skim milk powder production finished 12.7% below previous year levels.

Additional Report Details

Butter – Production Declines Seasonally to a Two Year Low Level, Down 1.7% YOY

According to the USDA, U.S. butter production declined seasonally to a two year low level while finishing 1.7% below previous year levels. The YOY decline in butter production was the second experienced in a row. YOY declines in butter production experienced throughout the Atlantic U.S. (-7.7%) and Western U.S. (-3.1%) more than offset a 1.8% 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 1.5% on a YOY basis heading into the final month of the production season, despite the most recent decline.

Cheese – Production Remains at a Record High Seasonal Level, Finishes up 4.4% YOY

U.S. cheese production finished 4.4% higher on a YOY basis throughout Aug ’21, remaining at a record high seasonal level for the ninth time in the past ten months. YOY increases in cheese production experienced throughout the Central U.S. (+7.8%) and Western U.S. (+2.0%) more than offset a 0.3% YOY decline in Atlantic U.S. production.

Other-than-cheddar cheese production increased 6.9% on a YOY basis throughout the month, more than offsetting a 1.5% YOY decline in cheddar cheese production. The YOY decline in cheddar cheese production was the first experienced throughout the past 14 months. Previous month cheddar cheese production volumes were revised 0.8% above levels previously stated.

’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, more than offsetting a 0.2% YOY decline in other-than-cheddar cheese production. ’20-’21 YTD cheese production has increased by an additional 3.0% on a YOY basis heading into the final month of the production season and is on pace to reach a record high annual level.

Dry Whey – Production Declines YOY for the 13^th Time in the Past 15 Months, Down 3.3%

U.S. dry whey production declined 3.3% on a YOY basis throughout Aug ’21, finishing below previous year levels for the 13^th time in the past 15 months and reaching a seven year low seasonal level. Lower dry whey production experienced throughout the Western U.S. (-22.5%) and more than offset higher Central U.S. (+6.8%) and Atlantic U.S. (+3.4%) production experienced throughout the month.

Combined whey protein concentrate (WPC) and whey protein isolate (WPI) production finished lower on a YOY basis for the second time in the past three months during Aug ’21, declining by 2.3%. The YOY decline occurred despite previous year WPI production volumes being revised 7.8% below levels previously stated. Combined production of dry whey, WPC and WPI finished 2.9% lower on a YOY basis throughout Aug ’21, remaining below previous year levels for the fourth 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 5.0% on a YOY basis heading into the final month of the production season, however.

NFDM/SMP – Combined Production Remains at a Three Year Low Seasonal Level, Down 15.6% YOY

Aug ’21 U.S. nonfat dry milk (NFDM) production declined seasonally to a 23 month low level while finishing 17.0% below previous year levels, reaching a five year low seasonal level. The YOY decline in NFDM production was just the second experienced in a row and the largest experienced throughout the past five and a half years on a percentage basis. YOY declines in NFDM production were widespread regionally and led by the Western U.S. (-21.5%), followed by the Central U.S. (-18.5%) and the Atlantic U.S. (-0.4%). Previous year NFDM production volumes were revised 2.1% above 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 ninth consecutive month during Aug ’21, declining by 12.7%. Previous year SMP production volumes were revised 13.1% above levels previously stated, resulting in the YOY decline in production levels. Combined production of NFDM and SMP production finished 15.6% below previous year levels, remaining at a three year low seasonal level.

’19-’20 annual combined production of NFDM and SMP increased 8.2% 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 3.7% on a YOY basis heading into the final month of the production season, despite the most recent decline, as a 10.5% YOY increase in NFDM production has more than offset a 16.7% YOY decline in SMP production.

Overall, nonfat dry milk production finished most significantly lower YOY on a percentage basis throughout Aug ’21, while other-than-cheddar cheese production increased most significantly on a percentage basis throughout the month.