Executive Summary U.S. dairy product production figures provided by USDA were recently updated with values spanning through Aug ’16. Highlights from the updated report include: • Aug ’16 U.S. butter production reached a seasonal low but finished higher on a YOY basis for the eighth consecutive month, finishing up 0.7%. • U.S. cheese production remained strong during Aug ’16, increasing on a YOY basis for the 41st consecutive month and finishing at a record high volume for the month of August. • Combined production of U.S. nonfat dry milk and skim milk powder declined on a YOY basis for the first time in four months during Aug ’16, finishing down 0.2%. Additional Report Details Butter – Production Finishes Higher YOY for the Eighth Consecutive Month, Finishes up 0.7% According to USDA, Aug ’16 U.S. butter production of 129.0 million pounds declined 10.4% MOM on a daily average basis, reaching a seasonal low, but finished 0.7% higher on a YOY basis. Butter production has increased on a YOY basis over eight consecutive months through August however the seasonal decline in butter production was significantly greater than the ten year average July – August decline of 4.4%. YOY increases in butter production were led by the Western U.S., which increased production by 1.8% YOY, followed by a 1.0% YOY increase in butter production within the Central U.S. The YOY increases in production within the Western and Central U.S. more than offset an 8.6% YOY decline in production experienced throughout the Atlantic U.S. ’14-’15 annual butter production increased 0.3% YOY while ’15-’16 YTD butter production is up an additional 3.5% YOY throughout the first 11 months of the production season. Cheese – Production Reaches New Record High for the Month of August, Finishes up 1.2% YOY Aug ’16 total U.S. cheese production of 990.0 million pounds increased on a YOY basis for the 41st consecutive month, finishing 1.2% above the previous year and reaching a new record high production level for the month of August. Cheddar cheese production of 279.4 million pounds was flat YOY however other-than-cheddar cheese production increased 1.7% YOY throughout the month. ’14-’15 annual total cheese production finished up 3.2% YOY while cheddar cheese production finished up 3.8%. ’15-’16 YTD cheese production is up an additional 1.9% YOY throughout the first 11 months of the production season despite cheddar cheese production remaining flat throughout the period. Dry Whey – Production Declines Sharply, Finishes Down 8.4% YOY Aug ’16 U.S. dry whey production of 75.8 million pounds declined 8.0% MOM on a daily average basis while also finishing 8.4% lower YOY. The seasonal decline in dry whey production was significantly greater than the ten year average July – August decline in production of 3.8%. Combined whey protein concentrate (WPC) and whey protein isolate (WPI) production also remained lower on a YOY basis, declining by 12.5% throughout the month. Combined WPC and WPI production has declined on a YOY basis for 21 consecutive months through August. Combined dry whey, WPC and WPI production declined 9.1% YOY during Aug ’16, finishing lower for the seventh consecutive month. ’15-’16 YTD dry whey production is up 3.8% YOY throughout the first 11 months of the production season, however combined production of dry whey, WPC and WPI is down 0.8% over the same period. NFDM/SMP – Combined Production Declines YOY for the First Time in Four Months Aug ’16 U.S. nonfat dry milk (NFDM) production of 116.7 million pounds declined on a YOY basis for the 11th consecutive month, finishing 5.8% below the previous year. Skim milk powder (SMP), which is more suited to the requirements of most global markets, increased YOY for the tenth consecutive month, as production of 46.1 million pounds finished 17.2% above the previous year. Overall, Aug ’16 combined production of NFDM and SMP declined on a YOY basis for the first time in four months, finishing down 0.2% YOY. Combined production of NFDM and SMP is down 3.3% YOY throughout the first 11 months of the ’15-’16 production season. Overall, SMP production continued to increase most significantly YOY on a percentage basis during Aug ’16 while dry whey and NFDM production declined most significantly on a percentage basis throughout the month.