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

• Jun ’18 U.S. butter production increased 3.1% YOY, finishing higher on a YOY basis for the ninth consecutive month. Butter production volumes remained 0.1% below three year average volumes for the month of June, however.
• U.S. cheese production finished higher on a YOY basis for the 63^rd consecutive month during Jun ’18, increasing by 1.8% to a record seasonal high for the month of June. U.S. dry whey production declined on a YOY basis for the first time in the past eight months, however, declining 0.7%.
• Combined production of U.S. nonfat dry milk and skim milk powder increased 2.4% on a YOY basis, finishing higher for the first time in the past three months. A 49.2% YOY increase in U.S. skim milk powder production more than offset a 9.0% YOY decline in U.S. nonfat dry milk production experienced throughout the month.

Additional Report Details Butter – Production Remains Higher on a YOY Basis for the Ninth Consecutive Month, Finishes up 3.1% According to USDA, Jun ’18 U.S. butter production continued to decline seasonally but remained higher on a YOY basis for the ninth consecutive month, finishing up 3.1%. YOY increases in butter production experienced throughout the Central U.S. (+4.6%) and Western U.S. (+3.1%) more than offset a 3.4% decline in Atlantic U.S. butter production throughout the month. Despite remaining higher on a YOY basis, Jun ’18 butter production volumes finished 0.1% below three year seasonal volumes for the month of June, however. ’16-’17 annual butter production declined 1.9%, finishing at a six year low, however ’17-’18 YTD production figures have rebounded by 3.9% YOY throughout the first three quarters of the production season and are on pace to reach a record annual high. Cheese – Production Reaches a Record Seasonal High, Finishes up 1.8% YOY Jun ’18 total U.S. cheese production increased on a YOY basis for the 63^rd consecutive month, finishing up 1.8% to a record seasonal high for the month of June. Cheddar cheese production increased 4.0% on a YOY basis throughout the month while other-than-cheddar cheese production finished 0.9% higher. ’16-’17 annual cheese production increased 3.5% to a record annual high as cheddar cheese production finished 6.5% higher, while ’17-’18 YTD production figures are up an additional 2.8% throughout the first three quarters of the production season. Dry Whey – Production Declines YOY for the First Time in the Past Eight Months, Finishes Down 0.7% Jun ’18 U.S. dry whey production declined 0.7% YOY, finishing lower on a YOY basis for the first time in the past eight months. Combined whey protein concentrate (WPC) and whey protein isolate (WPI) production also declined on a YOY basis throughout Jun ’18, finishing down 1.8%. Overall, combined dry whey, WPC and WPI production declined 1.1% YOY throughout Jun ’18. Despite declining on a YOY basis, Jun ’18 dry whey production volumes remained 3.5% above three year average seasonal figures for the month of June, while combined dry whey, WPC and WPI production finished 3.2% 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 4.6%. ’17-’18 dry whey production remains up an additional 5.0% YOY throughout the first three quarters of the production season while combined production of dry whey, WPC and WPI is up 4.1%, despite the most recent declines. NFDM/SMP – Higher SMP Production More Than Offsets Lower NFDM Production, Total up 2.4% Jun ’18 U.S. nonfat dry milk (NFDM) production declined 9.0% YOY, finishing lower for the third consecutive month. Production of skim milk powder (SMP), which is more suited to the requirements of most global markets, increased significantly on a YOY basis throughout Jun ’18, however, finishing up 49.2% and more than offsetting the declines in NFDM production. The YOY increase in SMP production was the first experienced throughout the past 11 months. Combined production of NFDM and SMP increased 2.4% throughout the month, finishing higher for the first time in the past three 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 has increased an additional 0.4% throughout the first three quarters of the production season. Overall, SMP production increased most significantly YOY on a percentage basis during Jun ’18, followed by cheddar cheese production, while NFDM production experienced the largest YOY decline in production throughout the month, followed by dry whey production.