Executive Summary

U.S. dairy product production figures provided by the USDA were recently updated with values spanning through Mar ’22. Highlights from the updated report include:

• U.S. butter production finished 1.5% above previous year levels throughout Mar ’22, reaching a record high seasonal level. The YOY increase in butter production was the first experienced throughout the past nine months.
• U.S. cheese production finished 1.1% above previous year levels throughout Mar ’22, remaining at a record high seasonal level for the 14^th time in the past 17 months. Dry whey production finished 6.6% above previous year levels, increasing on a YOY basis for the first time in the past four months.
• Combined production of U.S. nonfat dry milk and skim milk powder declined 10.9% on a YOY basis throughout Mar ’22, finishing below previous year levels for the ninth consecutive month and remaining at a three year low seasonal level. Nonfat dry milk production declined 3.9% on a YOY basis throughout the month while skim milk powder production finished 37.2% below previous year levels.

Additional Report Details

Butter – Production Reaches a Record High Seasonal Level, up 1.5% YOY

According to the USDA, Mar ’22 U.S. butter production declined slightly from the 12 month high level experienced throughout the previous month but remained 1.5% above previous year levels, reaching a record high seasonal level. The YOY increase in butter production was the first experienced throughout the past nine months. YOY increases in Western U.S. (+5.0%) and Atlantic U.S. (+1.1%) butter production more than offset lower production experienced throughout the Central U.S. (-3.1%).

’20-’21 annual butter production finished 0.1% above previous year levels, reaching the highest annual level on record for the fourth consecutive year. ’21-’22 YTD butter production has declined by 5.3% on a YOY basis throughout the first half of the production season, however, despite the most recent increase, and is on pace to reach a three year low level.

Cheese – Production Remains at a Record High Seasonal Level, up 1.1% YOY

Mar ’22 U.S. cheese production declined from the record high monthly level experienced throughout the previous month but remained 1.1% above previous year levels, reaching a record high seasonal level for the 14^th time in the past 17 months. The YOY increase in cheese production was the third experienced in a row. YOY increases in Central U.S. (+2.0%) and Western U.S. (+1.7%) cheese production more than offset lower production experienced throughout the Atlantic U.S. (-4.5%).

Other-than-cheddar cheese production increased 2.7% on a YOY basis throughout the month, more than offsetting a 2.9% YOY decline in cheddar cheese production. The YOY decline in cheddar cheese production was the fifth experienced throughout the past six months.

’20-’21 annual cheese production finished 3.2% 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 4.5% on a YOY basis throughout the year while other-than-cheddar cheese production finished 2.7% above previous year levels. ’21-’22 YTD cheese production has increased by an additional 2.1% on a YOY basis throughout the first half of the production season.

Dry Whey – Production Increases YOY for the First Time in Four Months, up 6.6%

U.S. dry whey production increased 6.6% on a YOY basis throughout Mar ’22, finishing above previous year levels for the first time in the past four months. YOY increases in dry whey production were widespread regionally and led by the Western U.S. (+13.4%), followed by the Atlantic U.S. (+5.3%) and Central U.S. (+3.4%).

Combined whey protein concentrate (WPC) and whey protein isolate (WPI) production volumes remained higher on a YOY basis for the sixth consecutive month throughout Mar ’22, increasing by 2.6%. Combined WPC and WPI production volumes reached a four year high seasonal level. Combined production of dry whey, WPC and WPI increased 5.0% on a YOY basis throughout Mar ’22, also reaching a four year high seasonal level.

’20-’21 annual dry whey production finished 5.7% below previous year levels, reaching a seven year low annual level. ’20-’21 annual combined production of dry whey, WPC and WPI declined 2.7% on a YOY basis, reaching an eight year low annual level. ’21-’22 YTD dry whey production has rebounded by 1.1% on a YOY basis throughout the first half of the production season.

NFDM/SMP – Combined Production Remains at a Three Year Low Seasonal Level, Down 10.9% YOY

Mar ’22 U.S. nonfat dry milk (NFDM) production declined 3.9% on a YOY basis, finishing below previous year levels for the eighth time in the past nine months. NFDM production remained at the second highest seasonal level on record, however. YOY declines in NFDM production experienced throughout the Central U.S. (-9.0%) and Western U.S. (-4.3%) more than offset higher Atlantic U.S. (+4.2%) production.

Production of skim milk powder (SMP), which is more suited to the requirements of most global markets, finished below previous year levels for the 14^th time in the past 16 months, declining by 37.2% and reaching a ten year low seasonal level. Combined production of NFDM and SMP production finished 10.9% below previous year levels, declining on a YOY basis for the ninth consecutive month and remaining at a three year low seasonal level.

’20-’21 annual combined production of NFDM and SMP increased 3.0% YOY, reaching a record high annual level for the fifth consecutive year. Annual NFDM production volumes finished 8.0% above previous year levels, more than offsetting an 11.4% YOY decline in SMP production volumes. ’21-’22 YTD combined production of NFDM and SMP production has declined by 10.3% on a YOY basis throughout the first half of the production season, however, and is on pace to reach a three year low level.

Overall, skim milk powder production finished most significantly lower YOY on a percentage basis throughout Mar ’22, while dry whey production increased most significantly on a percentage basis throughout the month.