Executive Summary

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

• Dec ’21 U.S. butter production declined 13.2% on a YOY basis, remaining at a three year low seasonal level for the fourth consecutive month.
• U.S. cheese production finished 0.1% above previous year levels throughout Dec ’21, remaining at a record high seasonal level for the 13^th time in the past 14 months. Dry whey production finished 5.0% below previous year levels, however, reaching a three year low seasonal level.
• Combined production of U.S. nonfat dry milk and skim milk powder declined 21.0% on a YOY basis throughout Dec ’21, finishing below previous year levels for the sixth consecutive month and remaining at a three year low seasonal level. Nonfat dry milk production declined 20.1% on a YOY basis throughout the month while skim milk powder production finished 24.9% below previous year levels.

Additional Report Details

Butter – Production Remains at a Three Year Low Seasonal Level, Down 13.2% YOY

According to the USDA, U.S. butter production increased seasonally to a seven month high level but finished 13.2% below previous year levels, remaining at a three year low seasonal level for the fourth consecutive month. The YOY decline in butter production was the largest experienced throughout the past eight months on a percentage basis. YOY declines in butter production were widespread regionally and led by the Atlantic U.S. (-19.4%), followed by the Central U.S. (-13.8%) and the Western U.S. (-11.6%).

’20-’21 annual butter production finished 0.9% above previous year levels, reaching the highest annual level on record for the fourth consecutive year. ’21-’22 YTD butter production has declined by 8.3% on a YOY basis throughout the first quarter 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, Finishes up 0.1% YOY

U.S. cheese production finished 0.1% higher on a YOY basis throughout Dec ’21, remaining at a record high seasonal level for the 13^th time in the past 14 months. A 3.0% YOY increase in Central U.S. cheese production more than offset lower production experienced throughout the Western U.S. (-1.4%) and the Atlantic U.S. (-6.1%).

Other-than-cheddar cheese production increased 2.0% on a YOY basis throughout the month, more than offsetting a 4.2% YOY decline in cheddar cheese production. The YOY decline in cheddar cheese production was the third experienced in a row and the largest experienced throughout the past 23 months on a percentage basis. Cheddar cheese production had finished above previous year levels over 14 of 15 months through Sep ’21, prior to declining throughout the three most recent months of available data. Previous year cheddar cheese production volumes were revised 3.6% above previously stated levels, contributing to the YOY decline.

’20-’21 annual cheese production finished 3.2% 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 4.3% on a YOY basis throughout the year while other-than-cheddar cheese production finished 2.8% above previous year levels. ’21-’22 YTD cheese production has increased by an additional 1.1% on a YOY basis throughout the first quarter of the production season.

Dry Whey – Production Declines to a Three Year Low Seasonal Level, Down 5.0% YOY

U.S. dry whey production declined 5.0% on a YOY basis throughout Dec ’21, reaching a three year low seasonal level. The YOY decline in dry whey production was the first experienced throughout the past three months. YOY increases in dry whey production were widespread regionally and led by the Atlantic U.S. (+12.2%), followed by the Central U.S. (+9.8%) and the Western U.S. (+2.3%).

Combined whey protein concentrate (WPC) and whey protein isolate (WPI) production volumes also finished below previous year levels throughout Dec ’21, declining by 0.8%. Combined production of dry whey, WPC and WPI declined 3.4% on a YOY basis throughout Dec ’21, reaching a three year low seasonal level.

’20-’21 annual dry whey production finished 5.3% below previous year levels, reaching a seven year low annual level. ’20-’21 annual combined production of dry whey, WPC and WPI declined 2.3% on a YOY basis, reaching an eight year low annual level. ’21-’22 YTD dry whey production has rebounded by 3.9% on a YOY basis throughout the first quarter of the production season, however, despite the most recent decline.

NFDM/SMP – Combined Production Remains at a Three Year Low Seasonal Level, Down 21.0% YOY

Dec ’21 U.S. nonfat dry milk (NFDM) production finished 20.1% below previous year levels, finishing below previous year levels for the fifth time in the past six months. YOY declines in NFDM production were widespread regionally and led by the Central U.S. (-37.0%), followed by the Atlantic U.S. (-22.4%) and the Western U.S. (-13.4%).

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 12^th time in the past 13 months during Dec ’21, declining by 24.9%. Previous year SMP production volumes were revised 23.0% above levels previously stated, contributing to the YOY decline. Combined production of NFDM and SMP production finished 21.0% below previous year levels, declining on a YOY basis for the sixth consecutive month and reaching a three year low seasonal level. The YOY decline in combined production of NFDM and SMP was the largest experienced throughout the past 12 years on a percentage basis.

’20-’21 annual combined production of NFDM and SMP increased 3.5% YOY, reaching a record high annual level for the fifth consecutive year. Annual NFDM production volumes finished 9.4% above previous year levels, more than offsetting a 13.1% YOY decline in SMP production volumes. ’21-’22 YTD combined production of NFDM and SMP production has declined by 12.0% on a YOY basis throughout the first quarter of the production season, however.

Overall, skim milk powder production finished most significantly lower YOY on a percentage basis throughout Dec ’21, while other-than-cheddar cheese production increased most significantly on a percentage basis throughout the month.