Executive Summary

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

• U.S. butter production declined on a YOY basis for the first time in the past nine months throughout Mar ’21, finishing 0.6% below previous year levels.
• U.S. cheese production finished 4.8% higher on a YOY basis throughout Mar ’21, remaining at a record high seasonal level for the fifth consecutive month, while dry whey production finished higher on a YOY basis for the third time in the past four months, increasing 0.9%.
• Combined production of U.S. nonfat dry milk and skim milk powder increased 3.1% on a YOY basis throughout Mar ’21, remaining at a record high seasonal level for the eighth consecutive month. Nonfat dry milk production increased 14.1% YOY throughout the month, more than offsetting a 31.4% YOY decline in skim milk powder production.

Additional Report Details

Butter – Production Declines YOY for the First Time in Nine Months, Finishes Down 0.6%

According to the USDA, U.S. butter production declined on a YOY basis for the first time in the past nine months throughout Mar ’21, finishing 0.6% below previous year levels. Butter production had reached record high seasonal levels over eight consecutive months through Feb ’21, prior to declining on a YOY basis throughout the month of March. Lower butter production experienced throughout the Atlantic U.S. (-14.3%) and Central U.S. (-0.7%) more than offset higher Western U.S. (+2.5%) production experienced throughout the month.

’19-’20 annual butter production increased 5.8% YOY, reaching the highest annual level on record for the third consecutive year. ’20-’21 YTD butter production has increased by an additional 4.9% on a YOY basis throughout the first half of the production season, despite the most recent decline.

Cheese – Production Remains at a Record High Seasonal Level, Finishes up 4.8% YOY

U.S. cheese production finished 4.8% higher on a YOY basis throughout Mar ’21, remaining at a record high seasonal level for the fifth consecutive month and reaching a record high monthly level on a daily average basis for the second consecutive month. The YOY increase in cheese production was the eighth experienced throughout the past ten months and the largest experienced throughout the past 29 months on a percentage basis. YOY increases in cheese production were widespread regionally and led by the Central U.S. (+7.8%), followed by the Atlantic U.S. (+3.8%) and Western U.S. (+1.8%).

Cheddar cheese production increased 7.8% on a YOY basis throughout the month while other-than-cheddar cheese production finished 3.6% higher. The YOY increase in cheddar cheese production was the 11^th experienced throughout the past 12 months.

’19-’20 annual cheese production reached a record high annual level for the 19^th consecutive year, although the production growth rate of <0.1% was the smallest experienced over the 19 year period. Cheddar cheese production increased 1.0% throughout the year, more than offsetting a 0.4% YOY decline in other-than-cheddar cheese production. ’20-’21 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 Third Time in the Past Four Months, up 0.9%

U.S. dry whey production increased 0.9% on a YOY basis throughout Mar ’21, finishing above previous year levels for the third time in the past four months. Higher dry whey production experienced throughout the Central U.S. (+9.8%) and Atlantic U.S. (+4.7%) more than offset lower Western U.S. (-19.6%) production experienced throughout the month.

Combined whey protein concentrate (WPC) and whey protein isolate (WPI) production finished higher on a YOY basis for the fourth consecutive month during Mar ’21, increasing by 17.8%. Combined WPC and WPI production had finished lower on a YOY basis over 17 of the 18 months through Nov ’20, prior to finishing higher on a YOY basis over the four most recent months of available data. The Mar ’21 YOY increase in combined WPC and WPI production was the largest experienced throughout the past seven years on a percentage basis. Combined production of dry whey, WPC and WPI increased 7.3% on a YOY basis throughout the month, finishing higher for the fourth consecutive month.

’19-’20 annual dry whey production rebounded 1.2% YOY from the four year low level experienced throughout the previous production season. ’20-’21 YTD dry whey production has declined by 3.6% on a YOY basis throughout the first half of the production season, however, despite the most recent increase.

NFDM/SMP – Combined Production Remains at a Record High Seasonal Level, up 3.1% YOY

U.S. nonfat dry milk (NFDM) production increased 14.1% on a YOY basis throughout Mar ’21, finishing at a record high seasonal level for the fifth consecutive month. The YOY increase in NFDM production was the eighth experienced in a row. YOY increases in NFDM production were widespread regionally and led by the Western U.S. (+18.0%), followed by the Atlantic U.S. (+11.0%) and Central U.S. (+4.9%).

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 fourth consecutive month during Mar ’21, declining by 31.4%. Combined production of NFDM and SMP finished 3.1% above previous year levels, remaining at a record high seasonal level for the eighth consecutive month, as the increase in NFDM production more than offset the reduction in SMP volumes.

’19-’20 annual combined production of NFDM and SMP increased 5.8% YOY, reaching a record high level for the fourth consecutive year. NFDM production increased 3.3% YOY but remained slightly below historical highs, while SMP increased 14.3%, reaching a record high annual level. ’20-’21 YTD combined production of NFDM and SMP has increased by an additional 8.5% on a YOY basis throughout the first half of the production season as a 15.4% YOY increase in NFDM production has more than offset a 13.3% YOY decline in SMP production.

Overall, nonfat dry milk production remained most significantly higher YOY on a percentage basis throughout Mar ’21, while skim milk powder production declined most significantly on a percentage basis throughout the month.