1968-D Kennedy

My complete guess is that it has something to do with a build up of metal dust and grease from the minting process and this particular coin got what was sticking to the die. Otherwise it might be one of those examples with an indent where they call them "grease on die" that sometimes causes missing lettering and such.

A " Cud" usually starts with a crack in the die near the rim, it does not build up. When the cracked portion of the die finally breaks off, there is a missing area on the die. When the planchet is squeezed between die hub and collar, the metal raises in the area that is missing to leave the Cud which naturally raises above the surface of the coin to some degree. I suppose that a die could break off a piece as soon as it cracked but usually there is a progression.
The Cud could also change and increase in shape and size, should more of the die break off. Cuds from the die pair leave a distinct shaped Cud on every coin they strike afterwards until they are caught and replaced unless they deteriorate further.