2024 September Board Book

CALIFORNIA MILK ADVISORY BOARD

Board of Directors Meeting

September 11 – September 12, 2024

CALIFORNIA MILK ADVISORY BOARD 2156 W Grant Line Road, Suite 100 Tracy, California 95377 (209) 883-6455 RealCaliforniaMilk.com BOARD MEETING AGENDA Wednesday, September 11, 2024 at 7:30 am and Thursday, September 12, 2024 at 8:00 am

DoubleTree by Hilton Hotel Modesto 1150 Ninth Street Modesto, CA 95354 (209) 526-6000

All matters noticed on this agenda may be considered for action. Items listed on the agenda may be considered in any order at the discretion of the Board Chair. Any item not so noticed will not be considered or discussed. All meeting agendas and notices are available on the California Department of Food and Agricultural website at: https://www.cdfa.ca.gov/mkt/mkt/. (select meeting notices) Each of the agenda items below will include discussion and possible action by the Board. Time will be allowed for members of the public to make comments on each agenda item. Comment time may be limited based on the number of agenda items and/or number of commenters.

1. Call to Order – Chairman Tony Louters

2. Roll Call – Secretary Corey Scheenstra

3. Introduction of Guests

4. Financial Report – Treasurer Travis Kamper

5. Report from Chairman

6. Individual District Reports

7. Marketing Branch Report

8. Report from Chief Executive Officer – John Talbot

9. Situation Assessment

10. Program Review and Proposals a. Advertising b. Communications

c. Business Development d. Processor Partnerships

e. CDIC f. CDRF g. Producer Relations and Dairy Princess Program (Thursday morning)

11. Committee/Industry Meetings Update

12. National Dairy Board Update

13. Minutes of Last Board and Executive Committee Meetings – Secretary Corey Scheenstra a. Public comments on agenda items 14. Other Business a. Previously discussed or tabled agenda item(s) for this meeting b. Items to be discussed at next board meeting

15. Public comment on non-agendized items

16. Adjournment

Americans With Disabilities Act Persons with disabilities needing special accommodation or modification in order to attend or participate in any Board or Committee meeting or other Board activity may request assistance by contacting John Talbot, C.E.O., California Milk Advisory Board at 209-883-6455.

B AGLEY -K EENE O PEN M EETING A CT S ECTIONS 11120 THROUGH 11132 OF THE C ALIFORNIA G OVERNMENT C ODE

Objective of the Act

When the Legislature enacted the Bagley-Keene Open Meeting Act (Act), it imposed a “ value judgment ” on the Governmental process. In effect, the Legislature said that when a State body sits down to develop its consensus, there needs to be a seat at the table reserved for the public. By reserving this place for the public, the Legislature provided the public with the ability to monitor and participate in the decision-making process. If the State body were permitted to meet in secret, the public’s role in the decision-making process would be negated. Therefore, absent a specific reason to keep the public out of the meeting the public should be allowed to monitor and participate in the decision-making process. If one accepts the philosophy behind the reservation of a seat at the table for the public, many of the particular rules that exist in the Act become much easier to accept and understand. Simply put, some efficiency is sacrificed for the benefit of greater public participation in government. A State body is every state board, council, commission or similar multimember body that is created by statute or by executive order including committees appointed by a State body (if the committee consists of three or more members). A meeting occurs when a majority of a body convenes, either serially (not permitted) or, together in one place, to address issues under the body’s jurisdiction. This includes meetings solely for the purpose of presenting information to a body. Even if no actions or decisions are contemplated, a gathering of a majority of a body to discuss issues under the body’s jurisdiction is considered a meeting under the Act. Serial Meetings occur when a member or staff of a State body communicates by telephone or email individually with a sufficient number of other members to constitute a quorum in order to discuss issues to come before the body. Such serial communications are prohibited by the Act. Social gatherings of a State body are not considered meetings covered by the Act so long as official business is not discussed. Teleconference meetings are permitted provided that information necessary to access the teleconference electronically and a primary physical location are included on the meeting notice, the location is accessible to the public and at least one member is present. Members planning to participate electronically must notify the Board office at least 24 hours in advance. The meeting minutes must reflect those members participating electronically. A Meeting Notice must be published at least ten (10) days prior to the date of the meeting. To avoid issues, issue notice 11 days before meeting at the latest. Meeting Notice must be mailed (or emailed) to anyone requesting a copy and must be posted on the Board’s website. The Meeting Notice must also be posted on CDFA’s website.

What is a State Body?

What Constitutes a Meeting?

What are Serial Meetings?

Social Gatherings

Teleconference Calls

Regular Meeting Notice Requirements

Required Posting

Special Meetings

In order to provide State bodies with a means of holding a meeting on short notice because of the occurrence of an unforeseen event, the Act allows for “Special Meetings” with a 48 -hour notice with copies to all national wire services. The purposes for which a body can call a special meeting are quite limited. Examples include pending litigation, legislation and certain personnel actions.

Notice Content

The Meeting Notice must include: ▪ Date, time and place meeting is to be held ▪ A specific agenda for the meeting ▪

If there will be a Closed Session, must be on the agenda and must cite Code Section and Subsection providing legal authority for Close Session. ▪ Notice that for every agenda item there will be discussion including public comment, and that board action may occur. ▪ Must list a contact person for questions concerning the agenda or for needed special accommodations. ▪ See example notice and agenda attached. The Agenda should allow opportunity for public comment on each agenda item . Members of the Public should also have opportunity to offer comments on subjects not listed on the agenda (reasonable time limits can be applied) A state body must record in the meeting minutes any action taken by the body and the vote or abstention of each member present for the action. In most cases, there are only two authorized reasons for Closed Sessions for our programs: ▪ Personnel Issues [Government Code Section 11126(a)(1)] ▪ Pending Litigation – Attorney should be present with memo prepared for the board of directors. [Government Code Section 11126(e)(1)] ▪ Chair must announce in open session that the Board is entering into closed session and state the (general) purpose of the closed session ▪ Only board members and people necessary to conduct the business of the closed session should be present ▪ When closed session adjourns, open session must be reconvened and the general nature of any actions taken in closed session must be reported ▪ Minutes of the closed session must be prepared and kept in confidential file

Comments from Public

Minutes Must Indicate Each Member’s Vote on Motions

Closed Sessions

Closed Session Process

Rights of the Public:

▪ To attend meetings free from conditions ▪ To tape, record or broadcast meetings ▪ To comment on any agenda item (may post a time limit) ▪ To make comments regarding non-agenda items (may impose time limit) ▪ To have access to documents provided to board members ▪ To receive notice to all meetings of the board or its committees including agenda ▪ Assurance that the meeting will not begin before the time stated on the notice

California Milk Advisory Board 2156 W Grant Line Road, Suite 100 Tracy, CA 95377 Telephone: 209-883-6455

I. Required Continuation Hearing – A public hearing must be held every five years to consider the CMAB’s continuation. The last continuation hearing was September 16, 2020. The next required continuation hearing will likely occur in the summer of 2025.

II. Fiscal Year – The CMAB’s fiscal year is January 1 to December 31.

III. Board Composition – The Board shall consist of 18 producer members and 18 producer alternates. There may also be a public member and public alternate who may not have a financial interest in the milk industry. There may not be more than 1 vote from any one production entity. Board seats are generally allocated in accordance with the number of milk producers within each district. The district allocation of Board seats is reviewed every three years.

IV. Role of Alternates – When a producer member is unable to attend a meeting, he or she may designate any alternate member from their district to serve in their place.

V. Interim Filling of Vacancies – When a producer member position becomes vacant, the Chairman may designate any alternate from the same district to serve as an interim member until the next round of district nominations and preference voting during which CDFA will seek a replacement. When an alternate producer position becomes vacant, the Board may recommend and the Department may consider appointment of a producer to fill the vacancy or the position may remain vacant until the next round of district nominations and preference voting during which CDFA will seek a replacement. VI. Term of Office – The term of office for all members and alternates is 3 years. Terms are staggered so that one-third of the Board positions are filled each year. Terms begin March 1 and run through February 28 three years later. VIII. Selection /Appointment Process – All members and alternates are appointed by CDFA. Recommendations for producer appointments for each district are generated through a two-step mail process conducted each fall consisting of a self-nomination procedure followed by preference voting. Recommendations for the public positions are generated by a vote of the producer Board members. IX. Executive Committee – Each March the Board shall select an Executive Committee consisting of a Chairman, Vice Chairman, Secretary, Treasurer and three additional Board members. The Chairman is limited to three consecutive terms. X. Board Quorum and Board Voting Procedures – A quorum of the Board shall consist of 10 members. Except as provided in the two exceptions below, actions of the Board shall be valid if approved by a majority of the members present, provided there is a quorum of the Board present. • Any action recommending a minor amendment to the CMAB Marketing Order must be approved by not less than 75% of the producer members of the full Board. • Board actions related to the selection or dismissal of the CEO shall not be valid unless approved by a ⅔ vote of the full board . VII. Term Limits – The CMAB has no term limits. Board members and alternates may serve as long as they continue to be rechosen via their district’s nomination and preference voting process.

Over

XI. Maximum Assessment – Either 10 cents per hundredweight or 1% of Gross Dollar Value

XII. Authorized Activities:

A. Research Authority – The CMAB may fund research relating to milk and dairy products. Such research may include research studies concerning the production, processing or distribution of milk, the health and nutrition of milk or dairy products or the development of new uses for milk or dairy products. B. Education Authority – The CMAB may fund programs designed to acquaint producers, handlers, consumers or other interested persons with educational information. Such programs may include information regarding quality improvement, sanitation practices, procedures, or methods as applied to market milk or dairy products. Education programs may be designed to also make available to producers, handlers and the public the findings of research programs. • Milk and Dairy Products Other than Cheese, Ice Cream and Butter - The Board may develop programs of advertising and trade promotion relating to market milk and dairy products, provided , that any such plans, with the exception of plans that make incidental references to brands of cheese, ice cream, or butter as described below, shall be directed toward increasing the sale of such milk and dairy products without reference to any private trade name used by any handler or milk or dairy products. • Cheese, Ice Cream and Butter - The Board may develop advertising and sales promotion plans to allocate funds for promotions of cheese, ice cream, or butter products made with California milk, including promotions in which brand or trade names are used ; provided , that the use is incidental to the promotion of the California milk product and not in direct promotion of the brand or trade name; and provided further , that the allocation of funds is made available on a nondiscriminatory basis to all retailers and manufacturers of butter, ice cream, or cheese utilizing milk produced in California. Permissible private brand or trade name marketing promotions may include advertising, performance allowances, sales promotions, couponing subject to Section 61375 and in-store promotion programs and materials and other marketing communication tools. • Official Board Brands, Trade Names, Labels and Other Distinctive Designations - The Board is authorized to establish and to regulate the permissive use of official Board brands, trade names and labels, and other distinctive designations of grade, quality or condition, except the grade or quality designations in effect pursuant to State or Federal grade standards, for any product in which market milk or other dairy products are used. Any official Board brand or trade name which is established pursuant to this section shall not be construed as a private brand or trade name with respect to Section 58889 of the Code. C. Advertising and Sales Promotion and Market Development Authority:

CMAB Glossary of Terms

ACV (All commodity volume) – Total grocery dollars attributed to individual retail groups in a defined geographic trade area .

Advertising awareness – One diagnostic tool that companies use to gauge the success of a campaign, advertising awareness studies measure whether or not consumers have knowledge of the ad or recall seeing it.

Advertorial – An advertisement in a print publication designed to look like a news or feature article.

Aseptic: Aseptic packaging is a procedure consisting of sterilization of the packaging material or container, filling with a commercially sterile product in a sterile environment and producing containers that are tight enough to prevent recontamination (hermetically sealed). Aseptically packaged ultra-high temperature (UHT) milk is shelf-stable and does not require refrigeration.

Brand – A name or symbol that identifies a company’s product as distinct from those of its competitors . A well- developed brand communicates a promise to the consumer about a product’s unique benefits.

Broker – An agent who is authorized to buy or sell products for another organization. Brokers facilitate the movement of dairy products from processors to retail stores.

California Dairy Innovation Center (CDIC) – A collaboration of California processors, universities and check-off organizations focused on stimulating innovation in the dairy sector. Staffed and managed by CMAB. California Dairy Quality Assurance Program (CDQAP) – An educational program collaboratively offered by the California dairy industry, state and federal regulatory agencies, and the University of California. Its goal is to encourage, through education and voluntary certification, science-based dairying practices which promote the health of the consumer, the environment, and dairy livestock. California Dairy Research Foundation (CDRF) – The mission of the CDRF is to increase the utilization of milk through investments in research. The scope of this research includes dairy foods, dairy herd health and food safety, nutrition, and dairy quality assurance. California Department of Food & Agriculture (CDFA) – The CDFA promotes and fosters confidence in California agriculture by implementing and communicating public policy and programs. The CDFA interfaces with the dairy industry in a variety of areas including exports, promotion and research marketing orders, producer milk pricing, pooling and distribution of milk revenue, quality and sanitation, and animal health.

Cable TV – Television service purchased by consumers that is carried to homes by direct wires (cables).

Cause Marketing – An initiative in which CMAB partners with one or more other organizations to positively address a specific need with a social responsibility charge. This includes things like food donation programs and often carry positive public relations opportunities.

Centralized buying – Under a centralized buying system, the responsibility for product selection and purchase is consolidated in a central market office, rather than with the individual stores.

Club store – A members-only, large-scale, high-volume store that stocks a large number of products that sell at low prices. Examples include Costco and Sam’s Club.

Control label products – A brand developed by a small regional or local wholesaler, as distinguished from a brand bearing the name of a manufacturer or producer. Control label products are typically distributed to a limited number of retailers.

Cost-per-engagement (CPE) – A means of measuring digital and social media advertising effectiveness that shows the cost when a digital ad or piece of social media content is engaged with.

Cost-per-thousand (CPM) – A means of measuring advertising effectiveness that shows the cost, per 1,000 people reached, of buying advertising space or time in a given media outlet.

Cross-promotion – A sales promotion that uses one brand to promote another, non-competing brand.

Culinary Advisory Panel – A panel of multi-cultural food bloggers who help guide CMAB on appropriate messaging, thematic content, and recipe creation for all ethnic promotions to ensure relevancy and lend authenticity. Dairy Business Innovation Initiative (DBII) – Pacific Coast Coalition – Funded by USDA, Dairy Business Innovation (DBI) Initiatives support dairy businesses in the development, production, marketing, and distribution of dairy products. DBI Initiatives enhance academic capacity, provide direct technical assistance and grants to dairy businesses. The DBII Pacific Coast Coalition, hosted by Fresno State, in partnership with CMAB/CDIC is one of four in the United States. Dairy Management, Inc. (DMI) – A non-profit organization that conducts integrated programs in marketing communications, promotion, and research on behalf of America’s dairy farmers . It was formed in 1995 by the National Dairy Board and the United Dairy Industry Association. Designated Market Area (DMA) – Is a region or territory where people get the same television and radio options. They are often linked by major metropolitan cities, but in rural areas, can be combined. Nielsen divides the country into 210 DMAs. These areas represent 210 television media markets.

Direct-to-Consumer (DTC) – A business model of selling products directly to consumers through an ecommerce platform without the help of third-party wholesales or retailers.

Drop Shipping – is a form of retail business wherein the seller accepts customer orders without keeping stock on hand. Instead, in a form of supply chain management, the seller transfers the orders and their shipment details to either the manufacturer, a wholesaler, another retailer, or a fulfillment house, which then ships the goods directly to the customer. As such, the retailer is responsible for marketing and selling a product, but has little or no control over product quality, storage, inventory management, or shipping.

E-commerce – Sales completed through the online channel.

ESL (Extended Shelf Life) – means that the milk is “longer lasting” and does not spoil as quickly as fresh milk. Yet, like fresh milk, ESL milk has to be stored in the fridge regardless of whether it is opened or unopened. ESL milk will last drinkable for 4-6 weeks (unopened).

Foodservice – The business of making or serving prepared foods, as in a restaurant.

Freight on Board (FOB) – Is a shipment term that defines the point in the supply chain when a buyer or seller becomes liable for the goods being transported. Purchase orders between buyers and sellers specify the FOB terms and help determine ownership, risk, and transportation costs. Gallup – A market research company that tests television and radio commercials, print ads and Internet ads to measure their effectiveness. Gallup tracks ads after they run to measure how effective they are at reaching a targeted market segment.

Green House Gasses (GHG) – Includes water vapor, carbon dioxide, methane, nitrous oxide, and ozone. The balance of these gasses in our atmosphere control the temperature at the surface of the earth.

HDPE (High Density Polyethylene) – A thermoplastic polymer made from petroleum. As one of the most versatile plastic materials around, HDPE plastic is used in a wide variety of applications, including milk jugs. HDPE is recyclable. HPP (High Pressure Processing) – A non-thermal preservation method which uses pressure and that guarantees food safety and achieves an increased shelf life, while maintaining the organoleptic and nutritional attributes of fresh products and can help protect heat-sensitive compounds in milk and colostrum (such as immunoglobulin). It can be applied to milk and dairy products but is not approved in the US as an alternative to pasteurization.

Independents – Food retailers that are one-store operations. Independents are usually small businesses serving local communities.

In-store demos – Retail store promotions which involve handing out product samples directly to consumers staffed by a trained local product demonstrator.

Integrated campaign – A marketing campaign that employs a variety of promotional methods – advertising, public relations, direct marketing, in-store promotions -- and coordinates them so they work together to reach the greatest number of people.

IRC (instant redeemable coupon)/on-pack IRC – A coupon placed directly on a product that either gives a price off on that package or a related product in the store immediately at check-out.

IRI (Information Resources, Inc.) – A company that gathers data on food products sold in supermarkets and grocery stores nationwide and sells it to subscribers. The data is collected on a weekly basis from the stores’ scanners, and IRI analyzes it to provide information on pricing, speed of sales and geographic distribution. Mat mail – A publicity method in which a brief feature story on a product is formatted and typeset so that newspapers can run the story as-is. The mat mail typically includes a visual and is distributed to small suburban daily and weekly newspapers. Media Monitoring – A company that monitors traditional and online media as well as social media and captures articles for its customers. For example, through Ketchum, the CMAB contracts with Cision and Lexis-Nexis to capture news and feature stories on California dairy. This enables the CMAB to track its publicity efforts. (formerly Clipping Service)

Merchandising – Drawing attention to products inside a store by arranging them in creative, eye catching displays.

Network TV – A group of television stations that are linked for the simultaneous broadcast of the same programs. With the network system, advertisers can reach a larger audience at a lower cost-per-person than with a single station.

Nielsen – Nielsen is a company that collects sales data on products sold in supermarkets, like cheese and dairy products. These data allow manufacturers to track sales of their products.

PET (Polyethylene terephthalate) – Obtained from petroleum sources, PET is a clear, strong, and lightweight plastic that is widely used for packaging foods and beverages, especially convenience-sized soft drinks, milk, juices, and water. PET is fully recyclable. PHA (Polyhydroxyalkanoates) – An emerging class of bioplastics that are bio-based and biodegradable (some are compostable). PHAs are produced by bacterial fermentation using bio-derived feedstocks – including dairy waste (whey, permeate) – and thus are an alternative to fossil fuel-derived plastics in some applications.

Publicity – A form of public relations that takes the form of editorial exposure, such as a news or feature article about a product. Publicity differs from advertising in that the company doesn’t pay the newspaper or TV station to run the story. POS (Point of Sale)/POP (Point of Purchase) – The in-store promotion of a product to make the product stand out among its competitors. POS can range from a simple ad that is hung on a grocery store shelf to a large, elaborate display. Private label – A brand developed by a large retailer or wholesaler, as distinguished from a brand bearing the name of a manufacturer or producer. Since manufacturers’ brands have large advertising expenditures built into their cost, a private brand can buy the same goods at a lower cost and sell them at a lower price. Product Display Page – A webpage specific to a product, found on a retailer’s own website like HEB.com or other third-party e-commerce website like Instacart.com. This page can include an image gallery, a description of the product, nutrition information, video content, availability in-store, and more. An optimized product display page will increase the product’s relevancy to consumers and likelihood of it showing sooner in web search. Qualitative research – Advertising research that explores issues deeply to gain insight into how consumers feel about a product and why they buy it. Qualitative research relies on in-depth interviews with open- ended questions like “How do you decide which cheese to buy?”

Quantitative research – Research that gathers measurable information from a large number of consumers. The surveys use closed-ended questions that require a simple answer.

Rating points – The measurement of the actual viewing or listening audience for a program or commercial. If a program has a rating of 10 points, it means that 10 percent of all households in a particular area had their television sets tuned to that program. A program with a high rating will deliver a large audience to advertisers for their commercials.

Retail authorizations – Approval by retail chains for their local and regional buyers to purchase merchandise for their organization.

Rotation – The pattern of how television and radio commercials are aired during the broad time period purchased by the advertiser. If an ad runs in the same time period on different days each week, it is called a horizontal rotation. If the ad runs throughout a particular day, it is a vertical rotation. Satellite media tour – A publicity method that allows a celebrity or company spokesperson to participate in up to 25 interviews per day with TV reporters. The person being interviewed sits in a television studio and is connected to remote locations via satellite hook-up, increasing the reach of the publicity program at a relatively low cost. SEO (Search Engine Optimization, as it related to food commerce) – The process of improving the appearance and positioning of your product on a website page. This can be done by optimizing content and boosting relevancy, or through paid means where an individual product is boosted into a top position so more consumers see it, engage with it, and ultimately drive more sales. SKU (Stock Keeping Unit) – A number associated with a retail product for inventory purposes. Retailers use SKUs to identify and track individual products. Each product must have a SKU, and each SKU must be unique; for example, a pint bottle and a quart bottle of the same product have separate SKUs. According to recent research, the average number of SKUs carried in a typical supermarket is 30,580. Shopper Marketing – A retailers own communication vehicles within their physical store and digital touchpoints. Because it is executed by the retailer, loyal shoppers are more likely to engage with shopper marketing tactics such as their weekly email blasts, festival-type promotions, etc.

Short-Lived Climate Pollutants (SLCP) – Short-Lived Climate Pollutants include black carbon, methane, tropospheric ozone, and hydrofluorocarbons (HFCs). They have relatively short atmospheric lifetimes but are believed to have significant warming impacts on climate.

Slotting fees – Fees that supermarkets charge suppliers and manufacturers to place their products on the shelf.

Spot TV – Commercial time on local television stations, as distinguished from commercial time on a network.

Talent Fees/Residuals – Fee paid to actors used in a broadcast commercial.

Third Party Logistics (3PL) – An organization's use of third-party businesses to outsource elements of its distribution, warehousing, and fulfillment services.

UF/MF (Ultra- and microfiltration) – Membrane-based processes applied to milk to separate its components based on molecular weight/size. During UF all the proteins are retained, whereas MF selectively retains casein and permeates whey proteins. UF is primarily used to produce dairy ingredients that have an increased protein content and reduced lactose contents, such as milk protein concentrate (MPC) and whey protein concentrate (WPC) UHT – Ultra-high temperature processing sterilizes milk by heating it above 135 °C (275 °F) for a short time. UHT milk packaged in a sterile container has a typical unrefrigerated shelf life of six to nine months. Unique Visitors Monthly (UVM) – Refers to the number of distinct individuals requesting pages from the website during a given period, regardless of how often they visit. Visits refers to the number of times a site is visited, no matter how many visitors make up those visits. United Dairy Industry Association (UDIA) – UDIA coordinates with its members, 18 state and regional dairy promotion organizations, to develop and implement programs and services to support the dairy industry. Universal product code (UPC) – Grocers use the UPC to identify products and prices, and to track their sale. UPCs are translated into barcodes (a series of vertical parallel bars printed on a product’s package) that are read or “scanned” by electronic cash registers.

Velocity – The rate of retail sales that a brand or SKU achieves through a store, group of stores or market area over a defined period of time.

Video news release (VNR) – Information about a product produced in a video newscast format and distributed to the news departments of television statements. If, after the news director reviews the VNR and he/she decides to use it, the video is typically edited and aired as a news item during a newscast. Warehouse store (superstore ) – A large-scale, high-volume store that stocks a large number of products that sell at low prices such as Wal-Mart. Can be called a “warehouse club” if the store sells only to members such as Costco or Sam’s Club.

Wire service (Associated Press) – A newsgathering organization that that collects stories for newspapers and distributes them electronically to subscribers.

Cheeses

Artisan Cheese – Refers to cheeses that are handmade in small quantities with respect for the tradition of the cheese. Artisan cheeses can be, but are not necessarily, made from milk obtained from animals located on the farm where the cheese is made.

Commodity Cheese – Describes popular varieties of cheese typically produced in large quantities with a flavor profile that appeals to the majority of consumers. These cheeses are sold in supermarkets, either as branded products or under private labels, or distributed for foodservice use. In California, Cheddar, Jack, and Mozzarella (low-moisture form) are popular commodity cheeses.

Farmstead Cheese – Refers to cheeses made from milk obtained from animals located on the farm where the cheese is made.

Specialty Cheese – A broad term that describes non-commodity cheeses. Specialty cheeses are cheese varieties with distinctive flavor profiles catering to a special niche in the market. Specialty cheeses can be unique varieties of cheese (i.e., Camembert, St. George, Teleme) or specialized versions of popular cheeses such as Cheddar, Jack, or Mozzarella (i.e., raw milk Cheddar, Dry Jack, high-moisture Mozzarella). This category also includes handmade artisan and farmstead cheeses. Specialty cheeses are typically sold as branded products in specialty food stores and in supermarket gourmet cases.

Organizations

CARB – California Air Resource Board CARES – Dairy CARES CCOA – California Creamery Operators Association CDC – California Dairy Campaign CDI – California Dairies, Inc. CDIC – California Dairy Innovation Center CDFA – California Department of Food and Agriculture CDQAP – California Dairy Quality Assurance Program CDRF – California Dairy Research Foundation CEPA – California Environmental Protection Agency CFMPB – California Fluid Milk Processor Board CMAB – California Milk Advisory Board

DCC – Dairy Council of California DFA – Dairy Farmers of America DIC – Dairy Institute of California DMI – Dairy Management, Inc. DWR – Department of Water Resources

IDFA – International Dairy Foods Association IFIC – International Food Information Council IMGC – International Milk Genomics Consortium LOL – Land O’ Lakes MilkPEP – Milk Processor Education Program MPC – Milk Producers Council NMPF – National Milk Producers Federation USDA – United States Department of Agriculture

USDEC – U.S. Dairy Export Council WUD – Western United Dairymen

ADMINISTRATION

Presentation to the Board of Directors

September 2024

Statement of Income & Expenses – July 2024

Milk Production Comparison

California Milk Advisory Board Statement of Income and Expenses As of July 31, 2024

Month Ending CY % to Month Ending PY % to Year Ending 7/31/2024 Budget 7/31/2023 Budget 12/31/2024 Actual PY Budget

Revenue Assessment Income *

$ 24,165,670

60% $ 24,409,069

59% $ 40,310,924

Non-Assessment Income **

59,830 503,266 81,522

64,668

95,000 550,000 223,000

63% 92% 37% 60% 46% 57% 37% 43% 45% 75% 47% 58% 56% 42% 50% 47% 36% 83% 58% 40% 55% 42% 54% 53% 57% 57% 68% 51% 85% 45% 77% 58% 51% 9% 0%

68%

Other Income

785,841 321%

Outside Income - Grant Reim

132,189

Total Revenue

24,810,288

25,391,766

41,178,924

61%

Expenses

Advertising

7,720,673 2,321,737 2,432,847 1,018,184 2,920,363 1,248,588 475,550 452,425 351,690

9,789,831 2,304,804 2,866,124 748,835 3,170,350 1,271,409 466,829 395,167 341,085

16,884,000 4,039,000 6,665,000 2,355,000 6,438,388 1,659,000 1,011,600 773,658 624,923 48,000 1,161,000 1,696,731 43,356,300

55% 57% 45% 34% 49% 87% 48% 52% 49% 43% 75% 53% 5%

Communications Domestic Retail

Foodservice

International Initiative

Tradeshows

Processor Relations Industry Intelligence Producer Relations

Education and Community Relations

4,223

2,554

CDIC

493,095 848,366

352,069

Dairy Research Foundation

1,299,725 23,008,783

20,287,742

Office Operational

171,127 4,822 24,453 17,998 95,877 20,367 63,180 31,005 40,808 421,485 34,028 51,074 9,000 55,855 37,500 12,716 -

212,366

476,000 5,800 42,000 45,000 175,000 48,000 10,000 116,000 58,000 72,000 740,000 50,000 100,000 10,600 125,000 48,500 21,800

45%

Rent

3,982

5%

Travel & Automobile

12,613 10,341 88,074 28,840 70,533 30,124 39,536 413,467 27,795 29,983 6,825 57,632 28,500 12,717 79

32% 17% 50% 60%

Legal

Insurance - Employee Freight & Postage Employee Education Depr, Amort & Interest Liability Insurance Money Investment Plan Admin Salary & Wages Board Travel Expenses Board Meeting Expenses

1% 0%

52% 55% 52% 56% 33% 49% 46% 61% 60% 49%

Board Per Diem Marketing Branch

Fiscal & Compliance Audit Assessment Collection Fee

1,091,294

1,073,409

2,143,700

Total Expenses

$ 21,379,035

47% $ 24,082,192

53% $ 45,500,000

Year to Date Payroll: $2,155,055 * Estimated July Assessment at $3,243,604 ** Estimated June and July Non-Assessment at $16,800

CMAB Milk Production Comparison

2020 to 2021 2021 to 2022 2022 to 2023 2023 to 2024 % Change % Change % Change % Change

2021

2022

2023

2024

January February

3,591,881,356 3,523,704,645 3,315,540,632 3,294,415,818 3,711,091,837 3,704,999,229 3,629,592,418 3,597,030,053 3,709,808,492 3,655,797,733

3,516,877,642 3,523,229,176 3,255,648,146 3,350,814,288 3,623,879,592 3,640,845,001 3,524,284,916 3,516,527,062 3,627,458,745 3,562,152,707

2.70% -1.90% -0.19% -0.97% -0.64% -1.18% 1.33% -0.16% -2.19%

0.18% 2.92% 0.47%

March

4.42% -0.90% -2.02% -0.22% 4.84% -1.46% -0.78% -1.80% 3.55% 0.39% -1.53% -2.24% -0.63% 2.53% -5.67% -0.37%

April May June July

3,328,497,972 3,297,636,812

3,443,968,122 3,457,426,027 3,404,671,543 3,422,363,281 3,508,881,474 3,309,799,621

3,291,637,904

0.52% 2.27% -4.50% -0.06% 0.08% -1.99% 1.84% -1.05% -2.80% 0.28% -0.84% -2.01% 1.62% -0.30% -1.13%

August

3,370,209,607 3,446,864,031

September

3,259,551,116 3,262,119,753 3,197,210,620 3,428,295,882 3,392,424,997 3,297,301,642 3,338,449,997 3,310,255,775 3,243,630,168 3,478,072,463 3,467,696,688 3,428,650,576

October

November December

1.64%

Total

41,698,825,203

-0.19%

41,698,825,203 41,621,616,223

-2.16%

41,621,616,223 40,721,051,115

-0.18%

24,262,620,205 24,219,703,018

8/22/20248:00 AM

Milk Assessments

Production Comparisons

ADVERTISING & COMMUNICATIONS

Presentation to the Board of Directors

September 2024

CMAB Advertising/Social Media Update

CMAB Communications Services Program

Coverage Dashboards

Press Releases

CMAB Advertising /Social Media Update

Q2 2024 Media Highlights

TV

2024 (4/1/24–6/30/24) ● California Freestyle 2.0 :30 (Country, Reggaeton), :15 (Country, Reggaeton) ● 32.8 MM Impressions

Paid Social

2024 (4/1/24–6/30/24)

● 93.5MM Impressions ● 71.9MM Video Views ● 247.7K Engagements

Paid Search

2024 (4/1/24–6/30/24)

● 590 K Impressions ● 50.8K Clicks

YouTube

2024 (4/1/24–6/30/24)

● 34.4 MM Impressions ● 7.8MM Views

Digital Media

2024 (4/1/24–6/30/24)

● 20.2 MM Impressions ● 16.1 MM Video Completions ● 315K Clicks

Website

● Ongoing curation of new recipes pertaining to the latest food trends to drive awareness of Real California Milk as well as additional content for Sustainability and Health & Wellness landing pages.

Sustainability Video Series: Upcycling Continuing the consumer-facing Sustainability series, CMAB launched the “Natural Intelligence” Upcycling video in June, addressing the environmental benefits of using upcycled agricultural material as nutrient-rich cow feed. The campaign resonated well with our audience, garnering 8.3 million views across English and Spanish Language. We will have the completed wrap-up report available at the end of August or early September. Work continued on the next Sustainability video focusing on Water Usage, which is set to launch in mid-August. This video highlights the water-smart practices of our California dairy farmers, who are committed to reusing water for maximum efficiency. This campaign includes online video, OOH, and audio placement on Spotify, and will run in Los Angeles, San Diego, and Sacramento. 2024 California Freestyle Campaign We wrapped up the California Freestyle 2.0 video campaign in June with the top-performing music genres, Country and Reggaeton. Our latest iteration of the California Freestyle campaign, The Goodness is Real, launched in July during the Olympics across TV (NBC and Telemundo) and streaming (Peacock) to leverage that cultural moment in media and extraordinary audience ratings (+77% over Tokyo). This campaign emphasizes the goodness we all feel when we have products made with Real California Milk, where the goodness is so real, we can’t help but move. All new The Goodness is Real videos will live across TV, streaming, social platforms, and YouTube. We kicked off the campaign with the Diner and Family videos on TV, and then in Q4, we will add the Office video into the mix.

To kick off the campaign, we produced digital animated banners for each spot that ran for approximately two weeks during the Olympics. The English banners were featured on NBC Olympics’ English-language local sites and apps, while the Spanish banners appeared on the Telemundo Deportes Feature Page. Local Promotions As of early August, both of our local promotions—Summer Snacking and Back-to-School Breakfast (Mornings Mean More) launched. These local promotions highlight dairy usage occasions by spreading awareness of compelling recipes and drive sales of featured dairy products while leveraging a surround sound of influencer partnerships, PR, and digital and social content. ● Summer Snacking: We kicked off June Dairy Month and summer timing to create top-of mind awareness for snacks made with dairy products from Real California Milk. We leveraged paid social posts, digital display, and influencer-produced content to promote Summer Snacking. In this local promotion, we used an e-carting partner to complement the promotion with a lower-funnel activation in which consumers can click to add products to their cart from our media campaigns. ● Back-to-School Breakfast (Mornings Mean More): We tapped into the back-to-school season by highlighting Real California Milk products as the go-to choice for convenient, delicious, and wholesome breakfasts. This campaign speaks to both parents and non parents, marking the end of summer fun and a return to daily routines. We utilized paid social media and digital display ads that featured two breakfast recipes. Social Updates The CMAB social content strategy continues to focus on the core content pillars of “Food & Health” (highlighting the value of dairy: nutrition, flavor, function, monetary), “Sustainability,” and our “Brand” through organic and paid Facebook, Instagram, and Pinterest content. We have added TikTok to our owned channel mix for 2024 due to the usage by our target audience and the prominence and effectiveness of food and recipe content on the platform. From January through July, we organically published original and repurposed influencer video content around Food & Health to build our presence on the platform. From May to June, we ran a paid media test by amplifying the top-performing organic posts, as well as branded and trending content, to inform our paid strategy for the remainder of 2024 and into 2025.

Brand Health Update

According to our Q2 Brand Health tracking report, California Dairy is maintaining strength across key metrics, even with lower TV spend, and has a strong foundation going into the next big campaign. Awareness of California Dairy remains strong and California Dairy continues to surpass Wisconsin Dairy in key metrics among Californians. In terms of the RCM seal, awareness remains near universal, exceeding 90%, as other key metrics remain stable. We’re pleased to track brand health metrics around Sustainability in markets where we’ve run our Sustainability campaigns. In Los Angeles, San Diego, and Sacramento, sustainability metrics are stronger than in markets where our work hasn’t run. Search Engine Marketing In Q2 2024, we increased the proportion of total spend for Brand keywords in order to increase our SOV (Share of Voice). We ran Sub-Brand at a lower spend in order to allow additional spend to maintain a higher SOV for our Core Brand campaign. We will continue to optimize toward the most cost-efficient keywords, increase funds toward Dairy Holidays to uphold the efficient CPC, and decrease spend toward Spanish-language keywords and search ads to support Core Brand SOV. Top keywords from the Upcycling campaign were added to the always-on Sustainability search campaign due to the click volume performance. Lastly, to ensure we do not duplicate efforts across brands, we continue meeting with MilkPEP, DMI, Dairy Council of California, and CA Milk Processor Board search teams several times throughout the year.

Q2 2024 Paid Search: Impressions

Clicks

CTR

590,811

50,811

8.60%

Appendix Paid Social Performance: The chart below shows social metrics for evergreen content across FB/IG, TikTok, and Pinterest through CMAB and influencer channels, from April through June 2024.

April 1–June 30, 2024:

Content

Impressions

Engagements

Video Plays

Always On (Brand)

57,060,630

208,610

44,287,317

California Freestyle

25,047,766

1,967

22,039,112

Influencer Amplification

4,310,949

14,867

4,245,016

CMAB Communications Services Program

COMMUNICATION SERVICES Public relations activities in Q2 and the first part of Q3 focused on supporting CMAB functional business priorities and delivering key messages to differentiate California dairy among consumers and retail/foodservice audiences.

Key Communications Strategies: • Strengthen awareness, affinity, and preference for CA based dairy in CA markets • Highlight milk, cheese, butter, yogurt, cottage cheese and ice cream in creative/messaging • Nurture re-discovered habits and usage occasions that drive dairy sales (breakfast, snacking) • Reach consumers where they are, share farm to table, sustainability, and culinary stories • Continue to maintain role of dairy in fitness/health for consumer, health professional audiences • Spotlight value of dairy: monetary, nutritional, flavor in PR and social media messaging • Promote CA progress in achieving climate neutrality • Continue to provide relevant information/tools for foodservice operators

Health & Wellness Results (Organic): 1 Post/4.6K Impressions

The CMAB continued to amplify health and wellness messaging to fitness and health professionals through an ongoing partnership with nutrition professional, Jordan Mazur, MS, RD to share recipe content on his social channels tied to milk and dairy for optimal nutrition and performance. In May, he shared a Powerhouse Salad recipe. He developed two additional pieces for sharing during the Olympics (results will be shared in the next board book). Work continued with the CMAB’s other trainer partner, Jessica Isaacs, to produce a College Athlete’s Training Table series – starting at Fresno State at the end of August and San Diego in September followed by three virtual sessions which will be made available to athletic programs throughout the state. She also produced advertorial content for the National Athletic Trainer’s Association. In June we kicked off a content relationship with Physician’s Assistant and IG influencer Colleen Sloan (@examroomnutrition) to produce content for the California members of the American Association of Physician’s Assistants as well as posting dairy/nutrition mythbusting content to her social channels.

Finally, in August dietitian Jenna Werner (@happystronghealthy.rd) rolled out her mythbusting content and participated in the “What the Actual Fork” podcast with fellow dietitian and influencer Andres Ayesta (@andresayesta) to discuss common misperceptions about dairy.

Mythbusting Results (Wave 1 Campaign - April only numbers): 1.7M Impressions Content focused on full fat/whole milk misinformation Results (Wave 2 Campaign - June only numbers): 1.6M Content focused onupcycling and aligned with the CMAB byproducts video campaign

CMAB continues to share dairy mythbusting messaging with audiences through social media and partnerships, as well as through sponsored ads. In April this messaging focused on misinformation about whole milk. June focused on the upcycling of byproducts on dairy farms. This aligned with the newest sustainability video campaign focused on the consumption of

byproducts by cows in their feed. The content headline “California Dairy Cows Upcycle Unused Food and Ag Byproducts into Delicious Milk” on allrecipes.com was the top performing mythbusting content. It delivered 66% more clicks versus the previous top performing content this year.

Regional PR/Retail Results: 54 Stories/46M Impressions

CMAB connected dairy with snack trends to support the Summer Snacking retail promotion. A lifestyle release leveraged several CMAB owned recipes, which generated stories and impressions in the target region of California.

News Engine Results: (Raley’s Food for Families Partnership: 273 Stories/166M Impressions Results: (RCM Excelerator Program): 569 Stories/221M Impressions

CMAB press release announcements of the 2024 Real California Milk Excelerator competition and partnership with Raley’s Food for Families program drove the majority of stories and impressions; release mentions of the Real California Mik seal, sustainability, health & wellness, and priority products also drove the high percent of impressions in these categories.