2025 May Board Book

CALIFORNIA MILK ADVISORY BOARD

Board of Directors Meeting

May 7 – May 8, 2025

CALIFORNIA MILK ADVISORY BOARD 2156 W Grant Line Road, Suite 100 Tracy, California 95377 (209) 883-6455 RealCaliforniaMilk.com BOARD MEETING AGENDA Wednesday, May 7, 2025 at 7:30 am and Thursday, May 8, 2025 at 8:00 am

Visalia Marriott 300 S Court Street Visalia, CA 93291 (559) 636-1111

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 Noel Rosa

2. Roll Call – Secretary Corey Scheenstra

3. Closed Session Pursuant to Government Code section 11126, the Board is authorized to meet in Closed Session for the purpose of considering matters involving: a. Personnel Matters – Staff Changes and Reorganization [Government Code 11126(a)(1)]

4. Open Session – Commences at approximately 8:30 am

5. Introduction of Guests

6. Report from Chairman

7. Financial Report – Treasurer Tony Louters

8. Individual District Reports

9. Marketing Branch Report

10. Report from Chief Executive Officer – John Talbot/Bob Carroll

11. Program Review and Proposals a. Business Development b. Processor Partnerships c. CDIC d. Advertising e. Communications f. Producer Relations g. CDRF

12. Guest Speaker – Peter V. Ernster, Jr., SVP Ingredients & Fluid Milk, Consumer Products Group at California Dairies, Inc.

13. Committee/Industry Meetings Update

13.National Dairy Board Update

14. Minutes of Last Board and Executive Committee Meetings a. Public comments on agenda items 15. Other Business a. Previously discussed or tabled agenda item(s) for this meeting b. Items to be discussed at next board meeting

16. Public comment on non-agendized items

17. 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 Board of Directors

May 2025

Statement of Income & Expenses

Milk Production Comparison

California Milk Advisory Board Statement of Income and Expenses As of March 31, 2025

Month Ending CY % to

Month Ending

Year Ending 12/31/2025

PY % to

3/31/2025

3/31/2024

Budget

Budget

Actual

PY

Budget

Revenue Assessment Income *

$ 10,012,057

25% $ 10,461,684

$ 39,441,046

26%

Non-Assessment Income **

25,782 189,420

25,880 261,708 81,522

94,610 641,585 125,000

27%

27%

Other Income

30%

48%

Outside Income - Grant Reim

-

0%

37%

Total Revenue

10,227,260

10,830,795

40,302,241

25%

26%

Expenses

Advertising

2,076,007

2,950,019 927,852 791,905 441,145 480,755 195,026 149,472 135,834 1,065,925

16,884,000 4,139,000 6,665,000 2,505,000 7,338,388 1,759,000 1,416,600

12%

17%

Communications Domestic Retail

820,602 937,981 350,398

20%

23%

14%

12%

Foodservice

14%

19%

International Initiative

1,107,719 463,801 219,090 146,139 110,630

15%

17%

Tradeshows

26%

29%

Processor Relations Industry Intelligence Producer Relations

15%

19%

773,658 624,923

19%

19%

18%

22%

Education and Community Relations

4,941

1,270

48,000

10%

3%

CDIC

224,942 460,000

180,570 424,183

1,323,581 1,840,000 45,317,150

17%

16%

Dairy Research Foundation

25%

25%

6,922,250

7,743,956

15%

18%

Office Operational

85,032

78,006

476,000

18%

16%

Rent

1,898 3,026 6,975

2,246 5,124 5,431

8,550

22%

39%

Travel & Automobile

42,000 45,000 178,000 45,000 10,000 110,000 58,000 72,000 762,200 50,000 110,000 15,000 125,000 52,500 23,600

7%

12%

Legal

16%

12%

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

44,924

41,679

25%

24%

9,493

7,007

21%

15%

-

-

0%

0%

26,693 14,160 18,173 192,849 11,482 32,941

27,152 14,245 17,489 184,891 20,552 28,223

24%

23%

24%

25%

25%

24%

25%

25%

23%

41%

30%

28%

Board Per Diem Marketing Branch

3,375

5,100

23%

48%

26,106

21,339

21%

17%

Fiscal & Compliance Audit Assessment Collection Fee

-

-

0%

0%

5,450

5,450

23%

25%

482,578

463,935

2,182,850

22%

22%

Total Expenses

$ 7,404,828

16% $ 8,207,891

$ 47,500,000

18%

Year to Date Payroll: $1,215,486 * Estimated March Assessment at $3,531,620 ** Estimated March Non-Assessment at $8,500

CMAB Milk Production Comparison

2021 to 2022 2022 to 2023 2023 to 2024 2024 to 2025 % Change % Change % Change % Change *

2022

2023

2024

2025

January February

3,523,704,645 3,516,877,642 3,294,415,818 3,255,648,146 3,704,999,229 3,623,879,592 3,597,030,053 3,524,284,916 3,655,797,733 3,627,458,745 3,457,426,027 3,404,671,543 3,508,881,474 3,309,799,621 3,446,864,031 3,291,637,904

3,523,229,176 3,336,359,624 3,350,814,288 3,144,079,095 3,640,845,001 3,539,143,535

-1.90% -0.19% 0.18% -5.30%

-0.64% -1.18% 2.92% -6.17% -2.8%

March

-0.16% -2.19% 0.47% -2.79%

April May June

3,516,527,062 3,562,152,707 3,328,497,972 3,297,636,812 3,364,262,898

-0.90% -2.02% -0.22% -1.46% -0.78% -1.80% 0.39% -1.53% -2.24% 2.53% -5.67% -0.37% 2.27% -4.50% 2.21% 0.08% -1.99% -0.02% -1.05% -2.80% -3.53% -0.84% -2.01% -7.98% -0.30% -1.13% -7.86%

July

August

September

3,262,119,753 3,197,210,620 3,196,520,582 3,392,424,997 3,297,301,642 3,180,845,057 3,310,255,775 3,243,630,168 2,984,734,174

October

November December

3,159,198,458

3,467,696,688 3,428,650,576

Total

41,621,616,223

-0.19%

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

-2.16%

40,721,051,115 40,105,264,187

-1.51%

10,514,888,465 10,019,582,254

-4.71%

* Only 28 days in Feb 2025 compared to 29 in 2024. % decline in 2025 w/o extra day.

4/21/20254:43 PM

Milk Assessments

Production Comparisons

ADVERTISING & COMMUNICATIONS Presentation to the Board of Directors Ma y 202 5

CMAB Advertising/Social Media Update CMAB Communications Services Program Coverage Coverage Dashboards Press Releases

CMAB Advertising/Social Media Update

Q1 2025 Media Highlights

TV

Q1 2025 (2/10/25–3/31/25) ● California Freestyle 3.0 :30 (Family, Diner), :15 (Family, Diner) ○ 21.7 MM Impressions

Paid Social

Q1 2025 (1/28/25–3/31/25) ● 45.2MM Impressions ● 35.5MM Video Views ● 97.2K Engagements

Paid Search

Q1 2025 (1/1/25–3/31/25) ● Always On

○ 646.9K Impressions; 37K Clicks

● Mythbusters

○ 128.6K Impressions; 40.7K Clicks

● Dairy Holidays (3/3 - 3/31)

○ 11.6K Impressions; 1.2K Clicks

YouTube

Q1 2022 (2/10/25–3/31/25) ● Freestyle 3.0 & Reputation/Trust - OLV & CTV ○ 19.1MM Impressions ○ 14.3MM Views

Connected TV

Q1 2025 (2/2/25–3/31/25)

● Freestyle (Diner & Family :30s) ○ 9.9MM Impressions

○ 9.0MM Video Completions

Website

Ongoing curation of new recipes pertaining to the latest food trends to drive awareness of Real California Milk in addition to incorporating new content to the Sustainability and Health & Wellness landing pages

RCM.com Site Visits

● Q1 2025 = 222K Sessions

○ Q4 2024 = 209K Sessions

2025 California Freestyle Campaign Relaunch In February, we relaunched the California Freestyle “Goodness is Real” campaign airing the “Diner” and “Family” spots on broadcast TV, CTV, and YouTube in English and Spanish, with TV

placements during the 2025 Grammy Awards (Feb. 2) and Academy Awards (Mar. 2). In early April, a new TV rotation of the “Family” and “Office” spots will air on broadcast TV, CTV, and YouTube through mid-June. Social Updates The CMAB social content strategy continues to focus on the core pillars of Food & Health, Trust/Reputation (formerly Sustainability), and Brand through organic and paid Facebook, Instagram, Pinterest, and TikTok content. In Q1, we were dark for Always-On in January due to the wildfires around Los Angeles while the Influencer Amplification campaign launched at the end of the month. In February, we launched our Hispanic Always-On campaign on TikTok after the success of the Multicultural Always-On campaign in Q4. We are keeping an eye on the progress of the potential TikTok ban and will pivot to Instagram Stories and Reels if the ban comes to fruition. Brand Health Update According to our Bastion Insights consumer tracking study, after a period of softening in some key KPIs (Key Performance Indicators) we’re seeing signs of stabilization. Key KPIs, including change in opinion and change in intent, have leveled off compared to January. Notably, purchase intent and the belief that California Dairy products “make me feel good” have significantly improved. California Dairy continues to outperform Wisconsin across key measures and maintains stronger perceptions among heavy dairy users. The seal is still widely associated with quality, driven by freshness, local production, and California’s strict dairy standards. In order to update our understanding of what’s driving some strong dairy sales increases, we’ve launched an incremental consumer survey; this is currently in field. Early results will help inform next steps and ensure we move forward with a clear picture of consumer attitudes and behavior. Trust & Reputation (Sustainability) Video Series Relaunch In February, we relaunched all three videos (“Farm to Fuel,” “Upcycling,” and “Water Warriors”) on YouTube in English and Spanish. These videos previously achieved video completion rates of 36% (“Farm to Fuel”), 28% (“Upcycling”), and 38% (“Water Warriors”) in their individual video campaigns. In early April, we are optimizing “Farm to Fuel” and “Water Warriors” to continue running on YouTube through mid-June. To date, the majority of the impressions are through

“Upcycling” (2.1MM), so optimizing “Farm to Fuel” (570,596 impressions) and “Water Warriors” (267,118 impressions) gives these spots the opportunity to run at a higher rate.

Audience and Trust & Reputation (Sustainability) Messaging Research In December, we conducted research to identify our core dairy audience and explore the most motivating sustainability messaging. Audience Our high-value dairy audience is largely families with children, primarily aged 25–44, with a median age of 41. This group is diverse, skewing Hispanic, with many speaking all or mostly Spanish at home. Spanish-language content appears to strengthen both preference and loyalty within this audience. Messaging We tested 12 different ways to express our Trust & Reputation efforts. “Family-owned” emerged as the most motivating concept, while “cow comfort” also performed strongly across measures. Update We will be augmenting these recent insights with the targeted survey mentioned above. This will help ensure our messaging strategy is aligned with current attitudes and behaviors as we continue refining campaign work for later this year. Search Engine Marketing In Q1 2025, our Always-On search strategy maintained a strong balance between Brand and Non-Brand efforts. Spend allocation shifted slightly compared to 2024, with 39% directed toward Brand/Sub-Brand terms (up from 33%) and 61% toward Non-Brand terms (down from 66%). Our ongoing goal of increasing Share of Voice (SOV) for core brand terms remained a top priority and guided this adjustment. Budgets for Sustainability and Mythbuster campaigns remained consistent with 2024 levels. No new keywords were introduced, as existing terms continue to deliver strong performance. Based on positive results in 2024, we increased budgets for Dairy Holiday search campaigns in 2025. These seasonal activations continue to drive strong engagement. Notably, the National Chip and Dip Day campaign achieved a click-through rate (CTR) of 10.36%, the second highest across all Q1 ad groups, following our Dinner-focused group.

Search interest remains high around recipe-driven and dairy-themed holidays like Cheese Day, Pasta Day, and Ice Cream Day. Building on this momentum, the National Grilled Cheese Day paid search campaign launched on April 1.

Q1 2025 Paid Search: Impressions

Clicks

CTR

787,217

40,743

5.18%

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 October through December 2024.

January–March 31, 2025: Content

Impressions

Engagements

Video Plays

Always On (Brand)

41,956,721

94,585

32,051,384

Influencer Amplification

3,556,907

2,660

3,501,302

CMAB Communications Services Update

COMMUNICATION SERVICES Public relations activities during Q1 and the beginning of Q2 focused on supporting CMAB functional business priorities and delivering key messages to differentiate California dairy among consumers and retail/foodservice audiences.

News & Content Engine Consumer Results: 4 Stories & 5 Posts/11.4M Impressions • Earned media Daily Meal articles • RCM Excelerator thought leadership segments on LinkedIn • CBS News story

CMAB partnered with culinary expert Jill Silverman Hough to share expert tips for elevating cheese soups in a series of articles by The Daily Meal. A sequence of insightful panel discussions from the 2024 Real California Milk Excelerator program were published and strategically amplified on LinkedIn to reach and engage the professional community. Engaged the Ketchum reputation team to prepare key industry spokespeople for an interview with CBS Evening News highlighting challenges facing California dairy farmers. Participated as a sponsor of the California Artisan Cheese Festival in Santa Rosa as well as two CA Grown media/influencer events – an agritour in San Luis Obispo with key members of the CA Grown influencer/creator team where we focused on dairy sustainability over a California dairy breakfast, and a special California Road Trip reception hosted by Visit California and CA Grown for 120 travel trade and travel, lifestyle and food media/influencers in London. Trade Distributed releases to amplify CMAB events and activities including trade shows, RCM processor award winners, CDIC short courses and other events and news to retail and dairy industry trade publications. Coordinated interviews with the Visalia Times Delta, California Bountiful, Prepared Foods and Dairy Foods, as well as bylined articles in Cheese Market News and Deli Market News.

Health & Wellness Results: 2 Stories/1 Post/3.5M Impressions • USA Today sponsored article– including amplified LinkedIn • American Healthcare Leader sponsored article CMAB’s peer-to-peer and consumer outreach efforts continued to reinforce key health and wellness messaging promoting the benefits of dairy in everyday diets while addressing common misconceptions. A USA Today feature titled “How Sports Nutrition Drives Seasonal (and Lifetime) Fitness” aligned with trending winter wellness narratives, showcasing dairy’s role in supporting performance and long-term health. A paid amplification campaign extended the reach of RCM’s LinkedIn post, driving visibility among industry professionals and health-conscious audiences. An American Healthcare Leader piece highlighted CMAB partner Jordan Mazur, MS, RD. The article “Jordan Mazur is an Advocate for Science-Backed Nutrition” positioned dairy as a credible, science-supported component of a balanced diet. Jordan also touted the nutritional benefits of real milk vs. alternatives in the March 25 th issue of his LinkedIn newsletter “The Peak Performer’s Plate”, which reaches more than 1653 targeted subscribers in the health and wellness space. CMAB sponsored the 2025 Nutrition News Update event where Jessica Isaacs presented key dairy headlines tied to dairy for sports performance and dairy farmers Maureen and Nevin Lemos connected virtually to showcase how California cows utilize nutritionists and are upcycling ag byproducts in their diets for a group of 23 registered dietitians who provide content for leading national publications and websites.