Executive Summary

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

• U.S. butter production finished 1.4% below previous year levels throughout Feb ’22, reaching a three year low seasonal level. The YOY decline in butter production was the eighth experienced in a row.
• U.S. cheese production finished 6.3% above previous year levels throughout Feb ’22, remaining at a record high seasonal level for the 13^th time in the past 16 months. Dry whey production finished 0.4% below previous year levels, however, remaining lower on a YOY basis for the third consecutive month as processors continued to favor high-protein concentrates and isolates.
• Combined production of U.S. nonfat dry milk and skim milk powder declined 6.8% on a YOY basis throughout Feb ’22, finishing below previous year levels for the eighth consecutive month and remaining at a three year low seasonal level. Nonfat dry milk production declined 6.9% on a YOY basis throughout the month while skim milk powder production finished 6.4% below previous year levels.

Additional Report Details

Butter – Production Declines to a Three Year Low Seasonal Level, Down 1.4% YOY

According to the USDA, Feb ’22 U.S. butter production increased seasonally to a 12 month high level but remained 1.4% below previous year levels, reaching a three year low seasonal level. The YOY decline in butter production was the eighth experienced in a row. YOY declines in Central U.S. (-5.3%) and Atlantic U.S. (-1.9%) butter production more than offset higher production experienced throughout the Western U.S. (+1.7%).

’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 6.7% on a YOY basis throughout the first five months of the production season, however, and is on pace to reach a three year low level.

Cheese – Production Remains at a Record High Seasonal Level, up 6.3% YOY

U.S. cheese production finished 6.3% higher on a YOY basis throughout Feb ’22, remaining at a record high seasonal level for the 13^th time in the past 16 months. The YOY increase in cheese production was the largest experienced throughout the past ten months on a percentage basis. YOY increases in cheese production were widespread regionally and led by the Central U.S. (+8.1%), followed by the Atlantic U.S. (+5.2%) and Western U.S. (+4.6%).

Cheddar cheese production increased 3.9% on a YOY basis throughout the month while other-than-cheddar cheese production finished 7.3% above previous year levels. The YOY increase in cheddar cheese production was the first experienced throughout the past five months.

’20-’21 annual cheese production finished 3.1% 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 4.4% on a YOY basis throughout the year while other-than-cheddar cheese production finished 2.6% above previous year levels. ’21-’22 YTD cheese production has increased by an additional 2.4% on a YOY basis throughout the first five months of the production season.

Dry Whey – Production Remains Lower YOY for the Third Consecutive Month, Down 0.4%

U.S. dry whey production declined 0.4% on a YOY basis throughout Feb ’22, remaining below previous year levels for the third consecutive month. The YOY decline in dry whey production was the tenth experienced throughout the past 12 months. YOY declines in dry whey production experienced throughout the Atlantic U.S. (-4.7%) and Central U.S. (<-0.1%) more than offset higher Western U.S. (+2.6%) production.

Combined whey protein concentrate (WPC) and whey protein isolate (WPI) production volumes remained higher on a YOY basis for the fifth consecutive month throughout Feb ’22, however, increasing by 22.4%. The YOY increase in combined WPC and WPI production volumes was the largest experienced throughout the past 16 years on a percentage basis. Combined production of dry whey, WPC and WPI increased 8.4% on a YOY basis throughout Feb ’22, reaching a four year high seasonal level.

’20-’21 annual dry whey production finished 5.5% below previous year levels, reaching a seven year low annual level. ’20-’21 annual combined production of dry whey, WPC and WPI declined 2.4% on a YOY basis, reaching an eight year low annual level. ’21-’22 YTD dry whey production has rebounded by 1.4% on a YOY basis throughout the first five months of the production season, however, despite the recently experienced declines.

NFDM/SMP – Combined Production Remains at a Three Year Low Seasonal Level, Down 6.8% YOY

Feb ’22 U.S. nonfat dry milk (NFDM) production declined 6.9% on a YOY basis, finishing below previous year levels for the seventh time in the past eight months. YOY declines in NFDM production experienced throughout the Western U.S. (-11.7%) and Central U.S. (-1.2%) more than offset higher Atlantic U.S. (+10.0%) 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 13^th time in the past 15 months, declining by 6.4% and reaching a ten year low seasonal level. Combined production of NFDM and SMP production finished 6.8% below previous year levels, declining on a YOY basis for the eighth consecutive month and remaining at a three year low seasonal level.

’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 8.1% above previous year levels, more than offsetting a 13.2% YOY decline in SMP production volumes. ’21-’22 YTD combined production of NFDM and SMP production has declined by 10.2% on a YOY basis throughout the first five months of the production season, however, and is on pace to reach a three year low level.

Overall, nonfat dry milk production finished most significantly lower YOY on a percentage basis throughout Feb ’22, while other-than-cheddar cheese production increased most significantly on a percentage basis throughout the month.