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

• Jul ’18 U.S. butter production increased 0.5% YOY, finishing higher on a YOY basis for the tenth consecutive month and reaching a four year seasonal high for the month of July.
• U.S. cheese production finished higher on a YOY basis for the 64^th consecutive month during Jul ’18, increasing by 3.7% to a record seasonal high for the month of July. U.S. dry whey production declined on a YOY basis for the second consecutive month, however, finishing down 9.0%.
• Jul ’18 combined production of U.S. nonfat dry milk and skim milk powder declined 2.7% on a YOY basis, finishing lower for the third time in the past four months. Nonfat dry milk production declined 3.4% on a YOY basis throughout the month while skim milk powder production finished down 0.5%.

Additional Report Details Butter – Production Remains Higher YOY for the Tenth Consecutive Month, Finishes up 0.5% According to USDA, Jul ’18 U.S. butter production continued to decline seasonally but remained higher on a YOY basis for the tenth consecutive month, finishing up 0.5%. Overall, butter production reached a four year seasonal high for the month of July. A 6.7% YOY increase in butter production experienced throughout the Western U.S. more than offset declines in butter production experienced throughout the Central U.S. (-4.3%) and Atlantic U.S. (-10.3%). ’16-’17 annual butter production declined 1.9%, finishing at a six year low, however ’17-’18 YTD production figures have rebounded by 3.6% YOY throughout the first ten months of the production season and are on pace to reach a record annual high. Cheese – Production Reaches a Record Seasonal High, Finishes up 3.7% YOY Jul ’18 total U.S. cheese production increased on a YOY basis for the 64^th consecutive month, finishing up 3.7% to a record seasonal high for the month of July. The YOY increase in cheese production was in addition to a 1.7% upward revision to previous year production volumes. Cheddar cheese production increased 9.4% on a YOY basis throughout the month while other-than-cheddar cheese production finished 1.5% higher. ’16-’17 annual cheese production increased 3.7% to a record annual high as cheddar cheese production finished 6.9% higher, while ’17-’18 YTD production figures are up an additional 2.9% throughout the first ten months of the production season. Dry Whey – Production Declines YOY for the Second Consecutive Month, Finishes Down 9.0% Jul ’18 U.S. dry whey production declined 9.0% YOY, finishing lower on a YOY basis for the second consecutive month. Combined whey protein concentrate (WPC) and whey protein isolate (WPI) production also declined on a YOY basis throughout Jul ’18, finishing down 1.1%. Overall, combined dry whey, WPC and WPI production declined 6.3% YOY throughout Jul ’18. Despite declining on a YOY basis, Jul ’18 dry whey production volumes remained 4.0% above three year average seasonal figures for the month of July, while combined dry whey, WPC and WPI production finished 3.3% above three year average figures. ’16-’17 annual dry whey production increased 5.6% YOY while combined production of dry whey, WPC and WPI finished up 4.5%. ’17-’18 dry whey production remains up an additional 3.4% YOY throughout the first ten months of the production season while combined production of dry whey, WPC and WPI is up 3.0%, despite the recently experienced declines. NFDM/SMP – NFDM and SMP Production Both Finish Lower YOY, Total Down 2.7% Jul ’18 U.S. nonfat dry milk (NFDM) production declined 3.4% YOY, finishing lower for the fourth consecutive month. Production of skim milk powder (SMP), which is more suited to the requirements of most global markets, also declined on a YOY basis throughout Jul ’18, finishing down 0.5%. The YOY decline in SMP production was the 13^th experienced throughout the past 14 months. Combined production of NFDM and SMP declined 2.7% throughout the month, finishing lower for the third time in 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 remains up an additional 0.1% throughout the first ten months of the production season, despite the recently experienced declines. Overall, cheddar cheese production increased most significantly YOY on a percentage basis during Jul ’18 while dry whey production experienced the largest YOY decline in production throughout the month.