Executive Summary U.S. dairy product production figures provided by USDA were recently updated with values spanning through Feb ’18. Highlights from the updated report include:

• Feb ’18 U.S. butter production increased 4.7% YOY, finishing higher on a YOY basis for the fifth consecutive month.
• U.S. cheese production finished higher on a YOY basis for the 59^th consecutive month during Feb ’18, increasing by 4.2% to a record seasonal high for the month of February. U.S. dry whey production increased on a YOY basis for the 12^th time in the past 13 months, finishing up 14.6%.
• Combined production of U.S. nonfat dry milk and skim milk powder increased 7.5% on a YOY basis, finishing higher for the third time in the past four months. U.S. nonfat dry milk production increased 12.1% YOY throughout the month, more than offsetting an 8.9% decline in skim milk powder production.

Additional Report Details Butter – Production Increases YOY for the Fifth Consecutive Month, Finishes up 4.7% According to USDA, Feb ’18 U.S. butter production increased 4.7% YOY, finishing higher for the fifth consecutive month. Butter production finished at the second highest seasonal figure on record, trailing only the Feb ’13 production volumes. YOY increases in butter production experienced throughout the Central U.S. (+8.3%) and Western U.S. (+6.7%) more than offset a decline in Atlantic U.S. butter production (-14.3%) experienced throughout the month. ’16-’17 annual butter production declined 1.9%, finishing at a six year low, however ’17-’18 YTD production figures have rebounded by 3.4% YOY throughout the first five months of the production season. Cheese – Production Reaches a Record Seasonal High, Finishes up 4.2% YOY Feb ’18 total U.S. cheese production finished higher on a YOY basis for the 59^th consecutive month, finishing up 4.2% to a record seasonal high for the month of February. Cheddar cheese production increased 5.7% on a YOY basis throughout the month while other-than-cheddar cheese production finished 3.5% above the previous year production volumes. ’16-’17 annual cheese production increased 3.0% to a record annual high as cheddar cheese production finished 4.9% higher, while ’17-’18 YTD production figures are up an additional 3.5% throughout the first five months of the production season. Dry Whey – Production Increases YOY for the 12^th Time in the Past 13 Months, Finishes up 14.6% Feb ’18 U.S. dry whey production increased 14.6% YOY, finishing higher for the 12^th time in the past 13 months and reaching an 11 year seasonal high for the month of February. Combined whey protein concentrate (WPC) and whey protein isolate (WPI) production also remained higher on a YOY basis throughout Feb ’18, increasing by 6.0%. Combined WPC and WPI production had declined on a YOY basis over 20 of the past 25 months through the end of 2016, prior to finishing higher throughout the past 12 months. Combined dry whey, WPC and WPI production remained strong throughout Feb ’18, finishing up 11.4%. ’16-’17 annual dry whey production increased 1.3% YOY while combined production of dry whey, WPC and WPI finished up 4.6%. ’17-’18 dry whey production is up an additional 7.7% YOY throughout the first five months of the production season while combined production of dry whey, WPC and WPI is up 6.4%. NFDM/SMP – Higher NFDM Production Offsets Lower SMP Production, Total Production up 7.5% Feb ’18 U.S. nonfat dry milk (NFDM) production increased 12.1% YOY, finishing higher for the seventh consecutive month and reaching a six year seasonal high for the month of February. 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 seventh consecutive month, however, as production declined 8.9%. The increase in NFDM production more than offset the decline in SMP production, resulting in combined production finishing 7.5% higher YOY. The YOY increase in combined NFDM and SMP production was the third experienced throughout the past four months. ’16-’17 annual combined production of NFDM and SMP increased 4.1% to a record annual high as production of both products finished higher. ’17-’18 YTD combined production of NFDM and SMP has increased an additional 1.4% throughout the first five months of the production season. Overall, dry whey production increased most significantly YOY on a percentage basis during Feb ’18, followed by nonfat dry milk, while skim milk powder production experienced the largest YOY decline in production throughout the month.