Executive Summary U.S. dairy product production figures provided by the USDA were recently updated with values spanning through Jul ’20. Highlights from the updated report include:

• Jul ’20 U.S. butter production continued to decline seasonally but finished 0.7% higher on a YOY basis, reaching a record high seasonal level.
• U.S. cheese production increased 1.8% YOY, reaching a record high seasonal level, while dry whey production increased on a YOY basis for the 11^th time in the past 12 months, finishing up 2.0%.
• Combined production of U.S. nonfat dry milk and skim milk powder declined 2.0% on a YOY basis during Jul ’20, finishing lower for the second consecutive month. Nonfat dry milk production declined 5.2% YOY throughout the month, more than offsetting a 9.7% YOY increase in skim milk powder production.

Additional Report Details Butter – Production Reaches a Record High Seasonal Level, Finishes up 0.7% According to the USDA, Jul ’20 U.S. butter production continued to decline seasonally from the previous month but finished 0.7% higher on a YOY basis, reaching a record high seasonal level. The YOY increase in butter production was the 12^th experienced throughout the past 14 months. YOY increases in production experienced throughout the Western U.S. (+7.6%) and Atlantic U.S. (+3.5%) more than offset lower production experienced throughout the Central U.S. (-9.6%). ’18-’19 annual butter production increased 1.3% YOY, reaching the highest annual level on record. ’19-’20 YTD butter production has increased an additional 5.4% on a YOY basis throughout the first ten months of the production season. Cheese – Production Reaches a Record High Seasonal Level, Finishes up 1.8% YOY U.S. cheese production declined sharply from the previous month but remained 1.8% higher on a YOY basis during Jul ’20, reaching a record high seasonal level for the second consecutive month. Cheese production had declined on a YOY basis over four of the past five months through May ’20 prior to reaching record high seasonal levels over each of the past two months. YOY increases in production were widespread and led by the Central U.S. (+3.7%), followed by the Atlantic U.S. (+0.3%) and the Western U.S. (+0.2%). Other-than-cheddar cheese production increased 0.5% on a YOY basis throughout the month while cheddar cheese production finished 5.0% above the previous year levels. The YOY increase in cheddar cheese production was the fifth experienced throughout the past six months. ’18-’19 annual cheese production increased 1.7% YOY, reaching the highest annual level on record, as a 2.6% YOY increase in other-than-cheddar cheese more than offset a 0.5% 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 increased by an additional 0.2% on a YOY basis throughout the first ten months of the production season. Dry Whey – Production Increases YOY for the 11^th Time in the Past 12 Months, Finishes up 2.0% U.S. dry whey production increased 2.0% on a YOY basis during Jul ’20, finishing higher on a YOY basis for the 11^th time in the past 12 months. Higher production experienced throughout the Central U.S. (+10.5%) and the Western U.S. (+0.2%) more than offset lower production experienced throughout the Atlantic U.S. (-8.8%). Despite finished higher on a YOY basis, dry whey production remained below three year average seasonal figures for the second consecutive month. Combined whey protein concentrate (WPC) and whey protein isolate (WPI) production remained lower on a YOY basis for the 14^th consecutive month during Jul ’20, finishing down 1.4%. The increase in dry whey production more than offset the decline in combined WPC and WPI production throughout Jul ’20, however, as combined production finished 0.7% higher YOY. ’18-’19 annual dry whey production declined 5.2% YOY, reaching a four year low level, while combined production of dry whey, WPC and WPI declined 4.0%, finishing at a three year low. ’19-’20 YTD dry whey production has rebounded by 4.1% on a YOY basis throughout the first ten months of the production season while combined production of dry whey, WPC and WPI has increased by 0.7%. NFDM/SMP – Combined Production Declines YOY for the Second Consecutive Month, Down 2.0% U.S. nonfat dry milk (NFDM) production declined on a YOY basis for the third consecutive month during Jul ’20, finishing down 5.2%. YOY declines in production were widespread and led by the Western U.S. (-5.9%), followed by the Central U.S. (-5.4%) and the Atlantic U.S. (-2.3%). 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 third consecutive month during Jul ’20, increasing by 9.7% and reaching a seven year high seasonal level. The reduction in NFDM production more than offset the increase in SMP production throughout the month, as combined production of NFDM and SMP declined by 2.0%. The YOY decline in combined production of NFDM and SMP was the second experienced in a row. Combined production of NFDM and SMP had finished higher on a YOY basis over ten consecutive months through May ’20 prior to declining over each of the past two months. ’18-’19 annual combined production of NFDM and SMP increased 0.1% YOY, reaching the highest annual level on record. SMP production increased 2.6% on a YOY basis throughout the period, more than offsetting a 0.7% YOY decline in NFDM production. ’19-’20 YTD combined production of NFDM and SMP has increased by an additional 4.4% on a YOY basis throughout the first ten months of the production season, despite the most recent decline. Overall, skim milk powder production remained most significantly YOY on a percentage basis for the third consecutive month during Jul ’20, while nonfat dry milk production declined most significantly on a percentage basis throughout the month.