Executive Summary U.S. dairy product production figures provided by USDA were recently updated with values spanning through Dec ’19. Highlights from the updated report include:

• Dec ’19 U.S. butter production increased on a YOY basis for the seventh consecutive month, finishing up 4.0% and reaching a record high seasonal level.
• Dec ’19 U.S. cheese production increased 0.2% YOY, reaching a record high seasonal level, while dry whey production remained higher on a YOY basis for the fifth consecutive month, finishing up 7.1%.
• Dec ’19 combined production of U.S. nonfat dry milk and skim milk powder increased 12.5% on a YOY basis, finishing higher for the sixth consecutive month. Nonfat dry milk production increased 15.3% YOY throughout the month while skim milk powder production finished 4.8% higher YOY.

Additional Report Details Butter – Production Remains at a Record High Seasonal Level, Finishes up 4.0% YOY According to USDA, Dec ’19 U.S. butter production remained higher on a YOY basis for the seventh consecutive month, increasing by 4.0% and reaching a record high seasonal level. YOY increases in butter production experienced throughout the Atlanta U.S. (+16.5%) and Western U.S. (+11.7%) more than offset a 6.9% YOY decline in production experienced throughout the Central U.S. ’18-’19 annual butter production declined 0.2% from the record high level experienced throughout the previous production season but remained at the second highest annual level on record. ’19-’20 YTD butter production has rebounded by 4.5% on a YOY basis throughout the first quarter of the production season and is on pace to reach a record high annual level. Cheese – Production Remains at a Record High Seasonal Level, Finishes up 0.2% YOY Dec ’19 total U.S. cheese production declined to a five month low level but remained 0.2% higher on a YOY basis, finishing higher for the ninth time in the past ten months and reaching a record high seasonal level. YOY increases in cheese production experienced throughout the Atlanta U.S. (+4.4%) and Central U.S. (+2.5%) more than offset a 3.4% YOY decline in production experienced throughout the Western U.S. Cheddar cheese production increased 1.7% on a YOY basis throughout the month, more than offsetting a 0.4% YOY decline in other-than-cheddar cheese production. The YOY increase in cheddar cheese production was the first experienced throughout the past four months. ’18-’19 annual cheese production increased 1.7% YOY to a record annual high as a 2.8% YOY increase in other-than-cheddar cheese more than offset a 1.1% YOY decline in cheddar cheese production. Cheddar cheese production remained at the second highest annual level on record, however. ’19-’20 YTD cheese production has declined by 0.3% on a YOY basis throughout the first quarter of the production season, however. Dry Whey – Production Increases YOY for the Fifth Consecutive Month, Finishes up 7.1% Dec ’19 U.S. dry whey production increased 7.1% YOY, finishing higher on a YOY basis for the fifth consecutive month. A 21.0% YOY increase in Central U.S. dry whey production more than offset lower Atlantic U.S. (-0.7%) and Western U.S. (-7.2%) production experienced throughout the month. Combined whey protein concentrate (WPC) and whey protein isolate (WPI) production remained lower on a YOY basis for the 11^th consecutive month during Dec ’19, however, finishing down 5.3%. The YOY increase in dry whey production more than offset the YOY declines in WPC and WPI production experienced throughout Dec ’19, resulting in combined production increasing by 1.9%. ’18-’19 annual dry whey production declined 5.6% YOY, reaching a four year low level, while combined production of dry whey, WPC and WPI declined 4.5%, finishing at a three year low. ’19-’20 YTD dry whey production has rebounded by 6.5% on a YOY basis throughout the first quarter of the production season while combined production of dry whey, WPC and WPI has increased 2.1%. NFDM/SMP – Combined Production Higher YOY for the Sixth Consecutive Month, Finishes up 12.5% Dec ’19 U.S. nonfat dry milk (NFDM) production remained higher on a YOY basis for the eighth consecutive month, finishing up 15.3%. YOY increases in NFDM production experienced throughout the Western U.S. (+22.1%) and Atlantic U.S. (+24.4%) more than offset a 10.1% YOY decline in production experienced throughout the Central U.S. Production of skim milk powder (SMP), which is more suited to the requirements of most global markets, finished higher on a YOY basis for the fourth time in the past five months during Dec ’19, increasing by 4.8%. Dec ’19 combined production of NFDM and SMP increased 12.5% on a YOY basis, finishing higher for sixth consecutive month. The YOY increase in combined production of NFDM and SMP was the largest experienced throughout the past two years. ’18-’19 annual combined production of NFDM and SMP declined 2.0% from the record high level experienced throughout the previous production season. Production of NFDM and SMP declined by 1.2% and 4.4%, respectively, throughout the 12 month period. ’19-’20 YTD combined production of NFDM and SMP has rebounded by 7.8% on a YOY basis throughout the first quarter of the production season as a 10.6% YOY increase in NFDM production has more than offset a 0.3% YOY decline in SMP. Overall, nonfat dry milk production increased most significantly YOY on a percentage basis during Dec ’19, while other-than-cheddar cheese production declined most significantly on a percentage basis throughout the month.