Executive Summary

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

• Sep ’21 U.S. butter production declined 4.9% on a YOY basis, remaining below previous year levels for the third consecutive month and reaching a three year low seasonal level.
• U.S. cheese production finished 3.3% above previous year levels throughout Sep ’21, remaining at a record high seasonal level for the tenth time in the past 11 months. Dry whey production remained lower on a YOY basis for the 14^th time in the past 16 months, however, finishing down 1.6% and reaching a three year low seasonal level.
• Combined production of U.S. nonfat dry milk and skim milk powder declined 10.7% on a YOY basis throughout Sep ’21 but remained at the second highest seasonal level on record. Nonfat dry milk production declined 3.1% on a YOY basis throughout the month while skim milk powder production finished 22.5% below previous year levels.

Additional Report Details

Butter – Production Declines to a Three Year Low Seasonal Level, Down 4.9% YOY

According to the USDA, U.S. butter production increased slightly from the two year low level experienced throughout the previous month but remained 4.9% below previous year levels, reaching a three year low seasonal level. The YOY decline in butter production was the third experienced in a row. YOY declines in butter production were widespread regionally and led by the Atlantic U.S. (-15.8%), followed by the Central U.S. (-5.9%) and the Western U.S. (-2.5%).

’20-’21 annual butter production finished 1.0% above previous year levels, reaching the highest annual level on record for the fourth consecutive year, despite the recently experienced declines.

Cheese – Production Remains at a Record High Seasonal Level, Finishes up 3.3% YOY

U.S. cheese production finished 3.3% higher on a YOY basis throughout Sep ’21, remaining at a record high seasonal level for the tenth time in the past 11 months. YOY increases in cheese production experienced throughout the Central U.S. (+7.1%) and Western U.S. (+0.9%) more than offset a 2.4% YOY decline in Atlantic U.S. production.

Cheddar cheese production increased 3.2% on a YOY basis throughout the month while other-than-cheddar cheese production finished 3.4% above previous year levels. The YOY increase in cheddar cheese production was the 14^th experienced throughout the past 15 months.

’20-’21 annual cheese production finished 3.0% above previous year levels, increasing on a YOY basis for the 20^th consecutive year and reaching a record high annual level. Cheddar cheese production increased 4.2% on a YOY basis throughout the year while other-than-cheddar cheese production finished 2.6% above previous year levels.

Dry Whey – Production Declines YOY for the 14^th Time in the Past 16 Months, Down 1.6%

U.S. dry whey production declined 1.6% on a YOY basis throughout Sep ’21, finishing below previous year levels for the 14^th time in the past 16 months and reaching a three year low seasonal level. Lower dry whey production experienced throughout the Atlantic U.S. (-4.5%) and Western U.S. (-3.3%) more than offset a 1.2% YOY increase in Central U.S. production.

The reduction in dry whey production volumes was more than offset by increases in combined whey protein concentrate (WPC) and whey protein isolate (WPI) production volumes experienced throughout the month. Combined WPC and WPI production remained above previous year levels for the ninth time in the past ten months during Sep ’21, increasing by 8.9%. Combined production of dry whey, WPC and WPI increased 2.5% on a YOY basis throughout Sep ’21, finishing above previous year levels for the first time in the past five months.

’20-’21 annual dry whey production finished 4.6% below previous year levels, reaching a seven year low annual level. ’20-’21 annual combined production of dry whey, WPC and WPI declined 1.5% on a YOY basis, also reaching a seven year low annual level.

NFDM/SMP – Combined Production Remains Lower YOY, Down 10.7%

Sep ’21 U.S. nonfat dry milk (NFDM) production increased contraseasonally from the 23 month low level experienced throughout the previous month but remained 3.1% below previous year levels. The YOY decline in NFDM production was the third experienced in a row. Lower NFDM production experienced throughout the Central U.S. (-14.3%) and Atlantic U.S. (-12.7%) more than offset a 5.0% YOY increase in Western U.S. production.

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 tenth consecutive month during Sep ’21, declining by 22.5%. Previous year SMP production volumes were revised 11.9% above levels previously stated, contributing to the YOY decline in production levels. Combined production of NFDM and SMP production finished 10.7% below previous year levels but remained at the second highest seasonal level on record.

’20-’21 annual combined production of NFDM and SMP increased 2.5% YOY, reaching a record high annual level for the fifth consecutive year. Annual NFDM production volumes finished 9.6% above previous year levels, more than offsetting a 17.3% YOY decline in SMP production volumes.

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