2005 Dairy Products Utilization & Production Trends

Transcription

1 2005 Dairy Products Utilization & Production Trends

2 DRY MILK PRODUCTS UTILIZATION

3 Compilation of Census Data This 2005 compilation of condensed and dry milks utilization represents the Fifty-eighth annual industry-wide survey of end-uses for dry milk products. The Census, participated in by American Dairy Products Institute members, other cooperating processors, and distributors, reflects approximately 92% of the total domestic distribution. With such comprehensive industry coverage, projections have been made from the Census data to the total industry. This data is intended to indicate market patterns and serve as a guide in directing promotional efforts to continue the expansion of commercial markets. The American Dairy Products Institute expresses sincere appreciation to all who assisted by assembling information and reporting the same to make this publication a useful marketing tool. Information of interest to condensed and dry milk processors, marketers/distributors and users is included in this 2005 publication. The inclusion of such information presents a more complete picture of the manufactured milk products industry by providing cognizance of supply-demand patterns and their relationship to overall marketing. Continued market expansion by the development of new uses for the various condensed and dry milk products is necessary for continuing growth of this segment of the dairy industry and reflects an ongoing purpose of the American Dairy Products Institute. Copyright 2006 by American Dairy Products Institute Printed in U.S.A

4 NONFAT DRY MILK: Briefed Findings Total production: 1,186,104,000 pounds - a decrease of million pounds, or 16.0% from Total domestic commercial sales: million pounds - an increase of 56.5 million pounds, or 9.5% from Of the traditional, primary markets for nonfat dry milk, dairy, bakery, beverage manufacture, infant formulas and confectionery reflected increased use in Manufacturers' sales increased 73.2 million pounds, accounting for 77.0% of total sales. Resellers' sales decreased 16.7 million pounds, accounting for 23.0% of total sales. In 2005, net domestic sales accounted for 54.5% of the total supply while government purchases, exports and shipments to territories accounted for 45.5% of the total supply. In 2004, net domestic sales accounted for 39.7% of the total supply while government purchases, exports and shipments to territories accounted for 60.3% of the total supply. DOMESTIC SALES IN RELATION TO PRODUCTION, 2005 & Million Million Pounds Percent Pounds Percent Production of Nonfat Dry Milk 1, ,412.4 Adjustment for increases or decreases in commercial stocks (15.9) 12.6 Plus USDA sales Plus imports Total Supply 1, % 1, % Total USDA and DPSC purchases Shipments to territories Commercial exports Total government purchases, exports, shipments to territories % % NET DOMESTIC SALES % % 1 Revised in accordance with USDA figures. 2 Includes 0.0 million pounds exported under DEIP in 2005 and million pounds in "Domestic Sales" reflect the total non-government domestic distribution, but do not include NDM used in school lunches or by the Department of Defense domestically.

5 FOUR YEAR COMPARISON OF DOMESTIC SALES OF NONFAT DRY MILK BY END-USE (millions of pounds) Change Mil. Lbs. Percent Dairy Industry % % % % % Confectionery Industry % % % % % Baking Industry % % % % % Prepared Dry Mixes & Dry Blend Manufacturers % % % % % Infant Formulas % % % % % Beverage Manufacturers % % % % % Institutional Use % % % % % Nutraceuticals, Pharmaceuticals, Special Dietary Use % % % % % Meat Industry % % % % % Soup Manufacturers % % % % % Margarine Manufacturers % % % % % Packaged for Retail Use % % % % % Chemicals % % % % % Animal Feed % % % % % All Other Uses % % % % % TOTAL DOMESTIC NON- GOVERNMENT USE % % % % % 1 Revised. 2 Nonfat Dry Milk processed originally for human consumption.

6 2005 Domestic Sales of Nonfat Dry Milk (Total million lbs.) All Other Uses 13.1% Baking Industry 6.5% Confectionery Industry 16.5% Dairy Industry 63.9%

7 FOUR YEAR COMPARISON OF DOMESTIC SALES OF NONFAT DRY MILK - DAIRY (millions of pounds) Change Mil. Lbs. Percent Hard Cheese % % % % % Frozen Desserts % % % % % Cultured Products % % % % % Dry Dairy Blends % % % % % Cottage & Cream Cheese % % % % % Sales of Packaged NDM % % % % % Fluid Milk Fortification & Drink Mixes % % % % % Sales for all other dairy uses % % % % % TOTAL DOMESTIC SALES % % % % % 1 Revised in accordance with USDA figure.

8 DOMESTIC SALES BY METHOD OF DISTRIBUTION In millions of pounds Change Direct by Manufacturers Through Resellers TOTAL In percent of total Change Direct by Manufacturers 70.9% 77.4% 72.0% 77.0% + 5.0% Through Resellers 29.1% 22.6% 28.0% 23.0% - 5.0% TOTAL 100.0% 100.0% 100.0% 100.0% MANUFACTURERS' DOMESTIC DISTRIBUTION Mil. Lbs. Percent Mil. Lbs. Percent To Resellers: % % Direct Sales To: Dairy Industry % % Confectionery Industry % % Prepared Dry Mixes and Dry Blend Manufacturers % % Baking Industry % % Nutraceuticals,Pharmaceuticals, Special Dietary Use % % Infant Formulas % % Beverage Manufacturers % % Institutional Use % % Meat Industry % % Soup Manufacturers % % Animal Feed % % All Other % % TOTAL % % RESELLERS' DOMESTIC DISTRIBUTION Mil. Lbs. Percent Mil. Lbs. Percent Dairy Industry % % Baking Industry % % Prepared Dry Mixes and Dry Blend Manufacturers % % Confectionery Industry % % Institutional Use % % Meat Industry % % Beverage Manufacturers % % Soup Manufacturers % % Nutraceuticals,Pharmaceuticals, Special Dietary Use % % Infant Formulas % % Animal Feed % % All Other % % TOTAL % % Revised in accordance with USDA figures. 2 Nonfat Dry Milk processed originally for human consumption.

9 NONFAT DRY MILK SALES TO CCC, (millions of pounds) Month January February March April May June July August September October November December TOTAL Includes million pounds of NDM procured under terms of the dairy price support program and million pounds (contract basis) for export under DEIP. 2 Includes million pounds of NDM procured under terms of the dairy price support program and million pounds (contract basis) for export under DEIP. 3 Includes million pounds of NDM procured under terms of the dairy price support program and million pounds (contract basis) for export under DEIP.

10 UTILIZATION OF CCC STOCKS OF NONFAT DRY MILK, (millions of pounds) Uncommitted supplies as of beginning of year CCC Purchases (contract basis) Utilizations Sales-- Livestock Feed Restricted use (feed) Unrestricted Sales Cattle Feed Program Casein Production Export Sales CCC Export Incentive Program From Commercial Sources Domestic Donations 2 Needy Schools Institutions Bureau of Prisons Domestic Donations Exch. Initiative Pudding Exchange Cheese Exchange Nonprofit 501(c)3 Exchange Foreign Donations Title II Furnished as an ingredient in blended foods Section Food for Progress Total Utilization , Uncommitted supplies as of December Totals may not add due to rounding and inventory adjustments. 2 Based on orders issued for shipment. NOTE: Although an uncommitted inventory of NDM has continued to exist for some time; it has not been reported due to CCC s efforts to utilize all NDM purchased under the price support program.

11 DRY WHOLE MILK: Briefed Findings Dry whole milk production totaled 32.4 million pounds for 2005, a decrease of 9.2 million pounds or 22.1% from Total domestic sales decreased to 38.3 million pounds, a decrease of 10.8 million pounds, or 22.0% from Confectionery remains the principal market, utilizing 31.8 million pounds SUPPLY AND DISTRIBUTION OF DRY WHOLE MILK (millions of pounds) Change Mil. Lbs. Percent Production of Dry Whole Milk % Change in Manufacturers' Stocks % Imports % Total Distributed % Total Commercial & USDA Exports % Less Shipments to Territories % NET DOMESTIC SALES % FOUR YEAR COMPARISON OF DOMESTIC SALES BY END-USE (millions of pounds) Change Mil. Lbs. Percent Confectionery Industry % Dairy Industry % Dry Blends % Packaged for Retail Use % Prepared Dry Mixes & Dry Blend Manufacturers % Baking Industry % Institutional Use % Soup Manufacturers % Infant Formulas % Animal Feed % NET DOMESTIC SALES % 1 Revised in accordance with USDA figures. 2 Estimate. 3 Dry whole milk processed originally for human consumption.

12 DRY BUTTERMILK: Briefed Findings Dry buttermilk production totaled 66.5 million pounds an increase of 11.5 million pounds from Total domestic sales decreased to 34.6 million pounds, a decrease of 1.3 million pounds, or 3.6% from Principal markets were: Bakery, utilizing, 22.6 million pounds; Prepared Dry Mixes and Dry Blends, utilizing 8.2 million pounds, and Dairy, utilizing 3.2 million pounds SUPPLY AND DISTRIBUTION OF DRY BUTTERMILK 1 (millions of pounds) Change Mil.Lbs. Percent Production of Dry Buttermilk % Less quantity not produced for human food % NET DISTRIBUTED FOR HUMAN FOOD % FOUR YEAR COMPARISON OF DOMESTIC SALES BY END-USE 3 (millions of pounds) Change Mil.Lbs. Percent Baking Industry % Prepared Dry Mixes & Dry Blend Manufacturers % Dairy Industry % Confectionery Industry % Animal Feed % All Other Uses % NET DISTRIBUTED FOR HUMAN FOOD % 1 Reflects Dry Buttermilk unless otherwise indicated. 2 Revised in accordance with USDA figures. 3 Includes Dry Buttermilk and Dry Buttermilk Product, reported without differentiation. 4 Dry Buttermilk processed originally for human consumption.

13 UTILIZATION OF CONDENSED MILK SOLIDS & (millions of pounds) NONFAT MILK WHOLE MILK BUTTERMILK 2005 Volume 2 Percent Volume 2 Percent Volume 2 Percent Dairy Industry Frozen Desserts,Ice Cream Mixes % % % Hard Cheese % % % Cultured Products % % % Fluid Milk Fortification % % % Other % % % Total % % % Wet Blends Bakery Industry % % % Infant Formulas % % % Dairy Industry % % % Mixes % % % Chemicals % % % Confectionery Industry % % % Total % % % Confectionery Industry % % % TOTAL % % % GRAND TOTAL: Volume 2 Percent Volume 2 Percent Volume 2 Percent Dairy Industry Frozen Desserts,Ice Cream Mixes % % % Hard Cheese % % % Cultured Products % % % Fluid Milk Fortification % % % Other % % % Total % % % Wet Blends Bakery Industry % % % Infant Formulas % % % Dairy Industry % % % Mixes % % % Total % % % Confectionery Industry % % % TOTAL % % % GRAND TOTAL: Final marketable product only; does not include quantity used or shipped to another plant for further processing into dry products. 2 Volume figures expressed on solids basis.

14 WHEY PRODUCTS UTILIZATION

15 Compilation of Census Data This 2005 compilation of whey products utilization represents the Thirty-first industry-wide survey of end-uses for whey products. The survey included American Dairy Products Institute members, other cooperating processors, and resellers, and reflects approximately 92% of the USDA-reported whey solids processed during With such comprehensive industry coverage, projections have been made from the Census data to the total industry. This data is intended to indicate market patterns and serve as a guide in directing promotional efforts to continue the expansion of commercial markets. The American Dairy Products Institute expresses sincere appreciation to all who assisted by assembling information and reporting the same to make this publication a useful tool in developing marketing and promotional programs. Information of interest to whey processors, marketers/distributors and users is included in this 2005 publication. The inclusion of such information presents a more complete picture of the whey products industry by providing cognizance of supplydemand patterns and their relationship to overall marketing. Continued market expansion by the development of new uses for the various whey products is necessary for continuing growth of this segment of the dairy industry and reflects an ongoing purpose of the American Dairy Products Institute.

16 UTILIZATION OF CONCENTRATED WHEY IN HUMAN FOODS Comparison of 2005 & 2004 End-Uses Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Dairy Industry % % Confectionery Industry % % Wet Blends % % Total % % GRAND TOTAL: Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Dairy Industry % % Wet Blends % % Total % % GRAND TOTAL: Volume figures (solids basis) in millions of pounds. 2 Revised in accordance with USDA figures.

17 UTILIZATION OF DRY WHEY IN HUMAN FOODS Comparison of 2005 & 2004 End-Uses Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Dairy Industry % % Dry Blends & Prepared Dry Mixes % % Baking Industry % % Confectionery Industry % % Nutraceuticals, Pharmaceuticals, Special Dietary Use % % Margarine Manufacturers % % Institutional Use % % All Others % % Total % GRAND TOTAL: % Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Dairy Industry % % Dry Blends & Prepared Dry Mixes % % Baking Industry % % Confectionery Industry % % Nutraceuticals, Pharmaceuticals, Special Dietary Use % % Margarine Manufacturers % % Institutional Use % % All Others % % Total 1 Volume figures in millions of pounds. 2 Revised in accordance with USDA figures % GRAND TOTAL: %

18 2005 Utilization of Dry Whey in Human Foods (Total million lbs.) All Other Uses 15.6% Baking Industry 18.7% Dairy Industry 43.4% Dry Blends & Prepared Dry Mixes 22.4%

19 UTILIZATION OF REDUCED LACTOSE & REDUCED MINERALS WHEY IN HUMAN FOODS Comparison of 2005 & 2004 End-Uses Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Confectionery Industry % % Dairy Industry % % Dry Blends & Prepared Dry Mixes % % Infant Formulas % % All Others % % Total % % GRAND TOTAL: Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Confectionery Industry % % Dairy Industry % % Dry Blends & Prepared Dry Mixes % % Infant Formulas % % Baking Industry % % All Others % % Total % % 1 Volume figures in millions of pounds. 2 Revised in accordance with USDA figures. GRAND TOTAL: 84.1

20 UTILIZATION OF WHEY PROTEIN CONCENTRATE IN HUMAN FOODS Comparison of 2005 & 2004 End-Uses Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Dairy Industry % % Infant Formulas % % Nutraceuticals, Pharmaceuticals, Special Dietary Use % % Dry Blends & Prepared Dry Mixes % % Baking Industry % % Confectionery Industry % % Meat Manufacturers % % Wet Blends % % All Others % % Total % % GRAND TOTAL: Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Dairy Industry % % Infant Formulas % % Nutraceuticals, Pharmaceuticals, Special Dietary Use % % Dry Blends & Prepared Dry Mixes % % Baking Industry % % Confectionery Industry % % Soup Manufacturers % % Meat Manufacturers % % Wet Blends % % Institutional Use % % All Others % % Total % % 1 Volume figures in millions of pounds. 2 Revised in accordance with USDA figures. GRAND TOTAL: 263.6

21 2005 Utilization of Whey Protein Concentrate in Human Foods (Total million lbs.) All Other Uses 16.9% Dairy Industry 39.9% Infant Formulas 23.6% Nutraceuticals, Pharmaceuticals 19.6%

22 UTILIZATION OF LACTOSE IN HUMAN FOODS Comparison of 2005 & 2004 End-Uses Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Total Percent Total Percent Infant Formulas % % Confectionery Industry % % Nutraceuticals, Pharmaceuticals, Special Dietary Use % % Dairy Industry % % Baking Industry % % Prepared Dry Mixes % % All Others % % Total % % GRAND TOTAL: Market Category Total Percent Total Percent Infant Formulas % % Confectionery Industry % % Nutraceuticals, Pharmaceuticals, Special Dietary Use % % Prepared Dry Mixes % % Baking Industry % % Dairy Industry % % Chemicals % % All Others % % Total % % 1 Volume figures in millions of pounds. 2 Revised in accordance with USDA figures. GRAND TOTAL: 223.2

23 2005 Utilization of Lactose in Human Foods (Total million lbs.) All Other Uses 12.5% Nutraceuticals, Pharmaceuticals 5.3% Confectionery Industry 16.1% Infant Formulas 66.1%

24 UTILIZATION OF WHEY & WHEY PRODUCTS IN ANIMAL FEEDS 1 Comparison of 2005 & 2004 End-Uses Market Category Sweet Acid Total Percent Sweet Acid Total Percent Dairy/Calf/Cattle Feeds Concentrated Whey % % Dried Whey % % Dried Whey Product % % Whey Protein Concentrate % % Whey Solids in Wet Blends % % Poultry Feeds Concentrated Whey % % Dried Whey % % Dried Whey Product % % Whey Protein Concentrate % % Whey Solids in Wet Blends % % Swine Feeds Concentrated Whey % % Dried Whey % % Dried Whey Product % % Whey Protein Concentrate % % Whey Solids in Wet Blends % % Pet Foods Concentrated Whey % % Dried Whey % % Dried Whey Product % % Whey Protein Concentrate % % Whey Solids in Wet Blends % % Other Feeds Concentrated Whey % % Dried Whey % % Dried Whey Product % % Whey Protein Concentrate % % Whey Solids in Wet Blends % % Feed Use, Undesignated % % Total % % 1 Includes both direct and indirect sales. 2 Volume figures in millions of pounds.

25 SUMMARY OF DOMESTIC SALES BY DISTRIBUTION OUTLET, Direct Indirect Direct Indirect Human Food Volume Percent Volume Percent Volume Percent Volume Percent Concentrated Whey % % % % Dry Whey % % % % Reduced Lactose Whey & Reduced Minerals Whey % % % % Whey Protein Concentrate % % % % Lactose % % % % Total Human Food 1, % % % % Animal Feed Concentrated Whey % % % % Dried Whey % % % % Dried Whey Product % % % % Whey Protein Concentrate % % % % Whey Solids in Wet Blends % % % % Feed Use, Undesignated % % % % Total Animal Feed % % % % Total 1, , GRAND TOTAL 1, , Direct Indirect Direct Indirect Human Food Volume Percent Volume Percent Volume Percent Volume Percent Concentrated Whey % % % % Dry Whey % % % % Reduced Lactose Whey & Reduced Minerals Whey % % % % Whey Protein Concentrate % % % % Lactose % % % % Total Human Food % % % % Animal Feed Concentrated Whey % % % % Dried Whey % % % % Dried Whey Product % % % % Whey Protein Concentrate % % % % Whey Solids in Wet Blends % % % % Feed Use, Undesignated % % % % Total Animal Feed % % % % Total 1, , GRAND TOTAL 1, ,508.5 Volume figures in millions of pounds. Revised in accordance with USDA figures.

26 DRY MILK PRODUCTION

27 NONFAT DRY MILK (Human Food Only) Production, Total Disappearance, Domestic Consumption, Domestic Per Capita Consumption Domestic Total Domestic Per Capita Production Disappearance Consumption Consumption Year (1,000 lbs.) (1,000,000 lbs.) (1,000,000 lbs.) (lb.) ,160,690 1,065 (1) ,314,270 1,014 (2) ,400,455 1,010 (3) ,499,902 1,378 (4) ,160,670 1,321 (5) ,390,033 1,630 (6) ,284,143 1,610 (7) ,056,797 1,571 (8) ,722 1,106 (9) , (10) , (11) , (12) ,123 1,008 (13) , (12) ,215,600 1,191 (14) ,232,994 1,280 (12) ,061,771 1,081 (14) 1, ,217,562 1,171 (14) ,135,383 1,120 (15) ,378,190 1,275 (16) ,451,751 1,073 (17) ,413,777 1,156 (18) ,595,939 1,362 (19) ,685,482 1,758 (20) ,412, ,883 (21) 1, ,186, ,517 (12) Revised. 2 Preliminary. (1) INCLUDES 81 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (12) INCLUDES 6 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (2) INCLUDES 50 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (13) INCLUDES 11 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (3) INCLUDES 58 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (14) INCLUDES 5 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (4) INCLUDES 77 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (15) INCLUDES 2 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (5) INCLUDES 92 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (16) INCLUDES 4 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (6) INCLUDES 96 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (17) INCLUDES 13 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (7) INCLUDES 95 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (18) INCLUDES 12 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (8) INCLUDES 85 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (19) INCLUDES 193 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (9) INCLUDES 38 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (20) INCLUDES 463 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (10) INCLUDES 19 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (21) INCLUDES 113 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (11) INCLUDES 7 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED

28 TOTAL PRODUCTION AND COMMERCIAL SALES OF NONFAT DRY MILK (MILLIONS OF POUNDS) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Year PRODUCTION , , ,589.1 SALES , , Source: USDA/NASS PRODUCTION J F M A M J J A S O N D SALES J F M A M J J A S O N D

29 Four Year Comparison of Dry Milks Production (1,000 lbs.) 1,800,000 1,700,000 1,600, ,500,000 1,400,000 1,300,000 1,200,000 1,100, ,000, , , , , , , , , ,000 0 Nonfat Dry Milk Skim Milk Powder Dry Whole Milk Dry Buttermilk Dry Skim Milk, Animal Feed Total

30 PRODUCTION AND DISTRIBUTION NONFAT DRY MILK (MILLION POUNDS) 2005 Change from 2004 PRODUCTION 1,186.1# % DOMESTIC SALES 650.1# + 9.5% GOVT. PURCH # % Change from 2003 PRODUCTION 1,412.4# % DOMESTIC SALES 593.6# % GOVT. PURCH # % 1 Revised.

31 MONTHLY PRODUCTION (thousands of pounds) Month Nonfat Dry Milk Skim Milk Powder Dry Whole Milk Dry Buttermilk Dry Skim Milk January 93,261 24,851 4,114 8, February 97,275 26,790 3,033 5, March 109,299 28,148 2,640 5, April 104,876 25,354 4,155 7, May 124,329 21,703 3,144 6, June 124,206 25,626 2,068 5, July 108,865 32,014 1,994 4, August 86,679 34,938 1,703 3, September 70,954 32,433 2,287 4, October 73,554 30,253 2,318 5, November 89,095 13,123 2,043 4, December 103,711 27,500 2,936 6, TOTAL 1,186, ,733 32,435 66,482 5,572 1 Preliminary. GRAND TOTAL: 1,613,326 MONTHLY PRODUCTION (thousands of pounds) Month Nonfat Dry Milk Dry Whole Milk Dry Buttermilk Dry Skim Milk January 129,320 4,247 5, February 115,769 4,306 5, March 117,981 3,546 4, April 134,011 5,269 5, May 151,291 3,155 5, June 144,095 2,395 4, July 134,566 2,379 3, August 113,617 3,111 3, September 93,936 3,293 3, October 94,814 3,156 4, November 83,789 4,285 3, December 99,192 2,445 6, TOTAL 1,412,381 41,587 54,979 5,243 GRAND TOTAL: 1,514,190 1 Revised.

32 Nonfat Dry Milk Manufactured In U.S. The Compounded Annual Growth Rate for Nonfat Dry Milk manufactured in the U.S. is negative 15.66% ,000 1,000,000 1,500,000 2,000,000 Thousands of Pounds

33 PRODUCTION BY STATES, 2005 & 2004 (thousands of pounds) Nonfat Dry Milk Dry Whole Milk Dry Buttermilk Dry Skim Milk Total All Dry Milks State California 506, ,741 _1 _1 31,680 30,060 2,282 2, , ,974 Pennsylvania 86,584 79,879 86,584 79,879 Minnesota 2,907 _ 2,907 _ All Others 593, ,761 32,435 41,587 31,895 24,919 3,290 3, , ,337 TOTAL 1,186,104 1,412,381 32,435 41,587 66,482 54,979 5,572 5,243 1,290,593 1,514,190 1 Production figure is not shown when less than 3 plants report to USDA or individual plant operations might be disclosed, but is included in the totals under "All Others".

34 WHEY PRODUCTION

35 ESTIMATED U.S. FLUID WHEY PRODUCTION AND 2004 (BILLIONS OF POUNDS) Total Production Sweet-Type Whey Acid-Type Whey Estimate based upon USDA reported cheese production. 2 Equivalent to 5.2 billion lbs. whey solids (4.9 billion sweet-type and 0.3 billion acid-type) 3 Equivalent to 5.1 billion lbs. whey solids (4.8 billion sweet-type and 0.3 billion acid-type)

36 MONTHLY PRODUCTION OF WHEY & WHEY PRODUCTS, (figures in thousands of pounds) Reduced Concentrated Dry Lactose & Whey Protein Whey Protein Whey Whey Minerals Whey Concentrate Isolate Lactose January 6,319 85,936 8,356 28,836 2,579 56,248 February 5,297 79,665 7,369 27,053 2,515 52,852 March 6,567 91,775 7,955 30,679 2,486 55,909 April 6,520 91,260 8,557 31,918 2,159 58,224 May 7,264 94,083 9,258 30,286 2,151 58,095 June 6,698 89,357 9,876 32,532 2,013 56,825 July 6,331 89,143 9,937 31,366 2,199 55,375 August 6,167 87,438 7,691 30,289 8,827 53,523 September 6,804 83,948 7,232 32,174 2,334 56,282 October 5,497 82,186 6,591 32,080 2,176 50,861 November 7,065 84,844 7,473 32,115 2,328 57,186 December 8,718 86,187 8,076 34,622 2,688 56,736 Total 79,247 1,045,822 98, ,950 34, ,116 1 Preliminary. GRAND TOTAL: 2,299,961

37 MONTHLY PRODUCTION OF WHEY & WHEY PRODUCTS, (figures in thousands of pounds) Reduced Concentrated Dry Lactose & Whey Protein Whey Protein Whey Whey Minerals Whey Concentrate Isolate Lactose January 8,584 86,784 6,983 30,110 2,136 53,252 February 8,187 84,585 6,881 27,790 1,955 51,238 March 7,196 92,788 7,920 30,939 2,226 56,234 April 7,193 91,816 7,936 29,732 2,246 54,434 May 8,310 90,215 6,802 29,400 2,362 58,001 June 7,760 86,681 6,760 28,896 2,478 56,859 July 7,646 83,065 7,486 29,647 2,389 55,809 August 7,007 86,673 7,168 29,110 2,284 54,615 September 7,866 80,239 6,774 28,873 2,370 54,361 October 7,454 80,884 6,613 29,402 2,504 56,238 November 7,051 83,609 6,155 29,476 2,273 55,426 December 6,973 87,559 7,415 32,479 2,454 59,154 Total 91,227 1,034,898 84, ,854 27, ,621 1 Revised. GRAND TOTAL: 2,260,170

38 PRODUCTION OF WHEY & WHEY PRODUCTS, (figures in thousands of pounds) Product Concentrated Whey Solids 3 Dry Whey Human Food Animal Feed Total 4 108, ,656 91,227 79,247 1,040,977 74, ,480 92, ,915 85, ,716 82,106 Total 1,115,321 1,085,165 1,034,898 1,045,822 Reduced Lactose & Minerals Whey 5 Human Food Animal Feed 82,913 41,757 43,371 40,739 40,243 44,650 43,974 54,397 Total 124,670 84,110 84,893 98,371 Whey Protein Concentrate Human Food Animal Feed 274,180 39, ,558 52, ,454 57, ,909 50,041 Total 313, , , ,950 Whey Protein Concentrate % % ,754 84,100 Total Whey Protein Isolate 274,015 99, , ,950 Total ,677 34,455 Lactose Total 4 563, , , ,116 Whey Solids in Wet Blends Animal Feed/Total 37, GRAND TOTAL: 2,262,246 2,255,851 2,260,170 2,299,961 1 Revised. 2 Preliminary. 3 Final marketable product only. Does not include quantity used or shipped to another plant for further processing into Dry Whey or Modified Whey Products. 4 Human Food and Animal Feed reported as combined total. 5 Reduced Lactose & Reduced Minerals Whey combined to avoid disclosure of individual plant operations. 6 Production figures not shown when less than 3 plants report to USDA or individual plant operations might be disclosed.

39 Four Year Comparison of U.S. Whey Products Production (1,000 pounds) 2,400,000 2,300,000 2,200,000 2,100, ,000,000 1,900,000 1,800,000 1,700,000 1,600,000 1,500, ,400,000 1,300,000 1,200,000 1,100,000 1,000, , , , , , , , , ,000 0 Concentrated Whey Solids Dry Whey Reduced Lactose/Reduced Minerals Whey Whey Protein Concentrate Whey Protein Isolate Lactose Whey Solids in Wet Blends Total

40 Dry Whey Manufactured In U.S The Compounded Annual Growth Rate for Dry Whey manufactured in the U.S. is 1.06% 500,000 1,000,000 1,500,000 Thousands of Pounds

41 Whey Protein Concentrate Manufactured in the U.S. The Compounded Annual Growth Rate for Whey Protein Concentrate manufactured in the U.S. is 4.87% , , , , , , , , , , ,000 Thousands of Pounds

42 Lactose Manufactured in the U.S The Compounded Annual Growth Rate for Lactose manufactured in the U.S. is 0.39% , , , , , , , ,000 Thousands of Pounds

43 U.S. DRY WHEY PRODUCTION, (figures in thousands of pounds) Year 1 Revised. 2 Preliminary Production , , , , , , , , , , , , , , , , ,031, ,097, ,136, ,069, ,143, ,167, ,237, ,196, ,163, ,147, ,116, ,136, ,178, ,147, ,187, ,045, ,115, ,085, ,034, ,045,822

44 million lbs Sweet-type Whey Production Cheese Production 3 2,937 3,320 3,520 3,984 4,540 4,674 5,209 5,572 6,059 6,488 6,735 7,217 7,492 8,258 8,547 8,873 9,127 Calculated Fluid Whey 4 26,433 29,880 31,680 35,856 40,860 42,066 46,881 50,148 54,549 58,392 60,615 64,953 67,428 74,322 76,923 79,857 82,143 Calculated Whey Solids 5 1,718 1,942 2,059 2,241 2,553 2,629 2,930 3,134 3,273 3,503 3,637 3,897 4,046 4,459 4,615 4,791 4,929 Acid-type Whey Production Cottage Cheese Production Calculated Fluid Whey 4 4,140 4,266 4,128 4,002 3,774 3,618 5,820 5,628 4,992 4,722 4,386 4,140 4,368 4,410 4,488 4,674 4,584 Calculated Whey Solids Total Whey Production (fluid basis): 30,573 34,146 35,808 39,858 44,634 45,684 52,701 55,776 59,541 63,114 65,001 69,093 71,796 78,732 81,411 84,531 86,727 Total Whey Production (solids basis): 1,987 2,219 2,327 2,491 2,789 2,855 3,264 3,486 3,573 3,786 3,900 4,145 4,308 4,724 4,884 5,071 5,204 Whey Solids Further Processed ESTIMATED U.S. FLUID WHEY & WHEY SOLIDS PRODUCTION (BY TYPE) AND RESULTING QUANTITY OF WHEY SOLIDS FURTHER PROCESSED A - Concentrated Whey Solids B - Dry Whey - Human Food ,054 1,067 1,044 1,095 1,105 1, Animal Feed C - Modified Dry Whey Products - Reduced Lactose Whey & Reduced Minerals Whey Whey Protein Concentrate D - Whey Solids in Wet Blends E - Whey Solids Utilized for Lactose ,065 1,069 Total Whey Solids Further Processed (A+B+C+D+E): 1,123 1,214 1,339 1,294 1,469 1,481 1,590 1,812 1,850 2,069 2,038 2,276 2,420 2,514 2,546 2,587 2,627 Total Whey Solids Further Processed as % of Total Whey Production (solids basis): 56.5% 54.7% 57.5% 51.9% 52.7% 51.9% 48.7% 52.0% 51.8% 54.6% 52.2% 54.9% 56.2% 53.2% 52.1% 51.0% 50.5% 1 Revised. 6 Average total solids content of concentrated whey: 40% 1974 thru Preliminary. 50% 1980 thru Agricultural Statistics Board, NASS, USDA - Da Data not available. 4 Whey Production: approximately 9 lb/1 lb cheese produced (except Cottage). 8 Reduced Lactose and Reduced Minerals Whey combined to avoid disclosure of approximately 6 lb/ 1lb Cottage Cheese produced. individual plant operations. 5 Average total solid contents of whey: 6.5% 1974 thru Reported as Partially Delactosed/Demineralized Whey thru % 1980 thru % 1990 thru Approximately 1.6 lb whey solids utilized/1 lb lactose produced.

45 PRODUCTION OF DRY WHEY & LACTOSE, BY STATE & 2004 (figures in thousands of pounds) Wisconsin 294, Dry Whey Lactose 1 Human Animal Total Human & Animal 2 294,983 2 New York 123,994 2, ,564 2 California 119, ,215 2 Minnesota 47, ,214 2 Utah 23, ,140 2 All Others 355,170 79, , ,116 TOTAL U.S. 963,716 82,106 1,045, , Dry Whey Lactose 1 Human Animal Total Human & Animal Wisconsin 299,650 19, ,345 2 New York 119,010 3, ,086 2 California 118, ,329 2 Pennsylvania 96, ,123 2 Utah 22, ,442 2 All Others 293,361 63, , ,621 TOTAL U.S. 948,915 85,983 1,034, ,621 1 Includes product made for both human food and animal feed. 2 Production figure is not shown when less than 3 plants report to UDSA or individual plant operations might be disclosed, but is included in the totals under "All Others".

46 CHEESE PRODUCTION

47 MONTHLY PRODUCTION OF CHEESE, (figures in thousands of pounds) Cheddar Other American Swiss Brick & Muenster Hispanic Mozzarella Other Italian Other Cheese January 261,868 60,464 23,240 6,060 12, ,595 65,693 73,136 February 237,987 54,251 21,824 5,647 13, ,382 60,291 71,938 March 268,668 62,800 24,176 6,656 14, ,830 68,852 81,893 April 262,787 64,788 23,851 6,162 13, ,184 63,535 72,872 May 265,569 66,932 25,622 6,240 13, ,238 64,958 78,467 June 258,211 63,178 24,520 6,588 14, ,540 63,509 78,824 July 252,709 63,268 24,554 7,388 12, ,304 59,750 75,614 August 245,144 66,884 24,824 8,809 14, ,631 66,887 86,054 September 239,629 62,162 24,170 8,058 14, ,687 66,652 86,558 October 248,910 63,411 24,954 8,370 14, ,671 68,230 88,172 November 248,464 64,731 25,347 8,102 13, ,933 67,371 85,327 December 262,469 67,666 26,944 8,706 14, ,803 68,204 82,385 Total 3,052, , ,026 86, ,375 3,020, , ,240 1 Preliminary. GRAND TOTAL: 9,127,107

48 MONTHLY PRODUCTION OF CHEESE, (figures in thousands of pounds) Cheddar Other American Swiss Brick & Muenster Hispanic Mozzarella Other Italian Other Cheese January 259,331 59,659 23,243 7,177 10, ,207 62,409 67,656 February 237,297 58,697 21,991 5,849 11, ,259 59,377 67,177 March 260,340 63,898 24,497 6,843 12, ,782 69,466 82,950 April 264,073 60,992 24,422 6,860 12, ,697 59,476 81,185 May 272,740 59,744 24,439 6,288 10, ,002 57,326 73,907 June 249,424 59,096 23,612 6,813 11, ,888 57,170 73,100 July 242,079 60,650 22,911 6,931 11, ,204 60,723 75,835 August 237,762 62,626 23,151 6,598 11, ,433 64,144 81,049 September 234,653 59,720 22,357 6,347 12, ,153 62,581 90,971 October 245,493 63,695 23,559 7,310 13, ,964 65,082 94,075 November 242,357 60,259 22,557 7,037 12, ,698 63,780 96,125 December 258,928 65,313 24,549 6,868 12, ,271 63,498 84,063 Total 3,004, , ,288 80, ,432 2,916, , ,093 1 Revised. GRAND TOTAL: 8,873,150

49 Four Year Comparison of Cheese Production (1,000 lbs.) 3,000,000 2,850,000 2,700, ,550,000 2,400,000 2,250,000 2,100,000 1,950,000 1,800, ,650,000 1,500,000 1,350,000 1,200,000 1,050, , , , , , ,000 0 Cheddar Other American Swiss Brick & Muenster Hispanic Mozzarella Other Italian

50 PRODUCTION OF CHEESE, BY STATE & 2004 (figures in thousands of pounds) 2005 Cheddar Other American Swiss Mozzarella Other Italian Total Cheese Wisconsin 689, , , ,604 2,405,699 Minnesota 539,544 53, ,312 California 522, ,080 Idaho 513,357 48, , ,771 2,136, ,669 19, ,632 Ohio 26,269 12, , ,717 New York 1 1, , , ,833 All Others 761, , , , ,002 2,319,134 TOTAL U.S. 3,052, , ,026 3,020, ,932 9,127, Cheddar Other American Swiss Mozzarella Other Italian Total Cheese Wisconsin 668, , , ,371 2,356,516 Minnesota 540,403 53, ,968 California 538, ,656 Idaho 486,679 43,647 New York 81,982 1, , ,460 1,992, ,224 13, , , , ,465 Ohio 24,155 7, , ,377 All Others 664, , , , ,629 2,299,759 TOTAL U.S. 3,004, , ,288 2,916, ,032 8,873,150 1 Production figure is not shown when less than 3 plants report to UDSA or individual plant operations might be disclosed, but is included in the totals under "All Others".

51 RAW MILK PRODUCTION & UTILIZATION

52 Number of Milk Cows, Production per Cow, and Milk Production; Number of Milk Cows 1 Average Milk Per Cow 2 Milk Production 2 Year (Thousands) (Pounds) (Billion Pounds) ,826 15, ,688 15, ,581 15, ,494 16, ,466 16, ,372 16, ,252 16, ,151 17, ,153 17, ,199 18, ,103 18, ,141 18, ,083 18, ,010 18, ,035 19, Includes dry cows, excludes heifers not yet fresh. 2 Excludes milk sucked by calves. 3 Preliminary. Source: USDA, Economic Research Service Total U.S. Milk Prodcution; Billion Pounds

53 2004 U.S. Milk Supply Utilization, by Product 1 Product Million Pounds Product Weight Fluid milk and cream sales 56,384 Milkfat Equivalent Cheese 67,929 Creamery Butter 22,166 Frozen Dairy Products 13,924 Evaporated and Condensed Milk 1,726 Used on Farms Where Produced 1,105 Other Uses 7,847 Total 2 171,081 1 Preliminary. 2 Includes net imports of ingredients. Source: Milk Industry Foundation & USDA, NASS 2004 U.S. Milk Supply Utilization, by Product 33.0% 39.7% 13.0% 8.1% 1.0% 0.6% 4.6% Fluid milk and cream sales Cheese Creamery Butter Frozen Dairy Products Evaporated and Condensed Milk Used on Farms Where Produced Other Uses

54 Organic Food Category Share, 2005 Sales % Growth Organic Food Categories ($ Mil) 2005 Dairy 2, % Bread & Grains 1, % Beverages (including non-dairy) 1, % Fruits & Vegetables 5, % Snack Foods % Packaged/Prepared Foods 1, % Sauces/Condiments % Meat/Fish/Poultry % Total Organic Consumer Food Sales 13, % Source: The Organic Trade Association 2006 Manufacturer Survey Organic Food Category Share, % 15.0% 10.0% 14.0% 5.0% 13.0% 2.0% 2.0% Dairy Bread & Grains Beverages Fruits & Vegetables Snack Foods Packaged/Prepared Foods Sauces/Condiments Meat

55 U.S. EXPORTS

56 U.S. Exports of Dairy Products Full Year 2005 vs. Full Year % 50% 45% 40% 30% 31% 20% 18% 10% 6% 9% 10% 0% -10% -6% -20% -30% -28% -28% -40% Source: USDEC Milk & Cream* Butter Cheese SMP Ice Cream Lactose Whey Butteroil All Value Volume (MT) *(000 liters) 21,183 4,421 57, ,995 26, , ,540 3,326 $1.662 mil.

57 U.S. Exports of Skim Milk Powder Full Year 2005 vs. Full Year % 70% 60% 59% 50% 40% 30% 20% 18% 20% 10% 6% 0% World Mexico SE Asia Mid. East/NA Volume (MT) 287, ,600 89,848 34,476 Source: USDEC

58 U.S. Exports of Whey Proteins Full Year 2005 vs. Full Year % 120% 121% 100% 88% 80% 60% 40% 31% 28% 35% 40% 38% 20% 0% -7% -20% World China SE Asia Mexico Canada Japan Korea S. America Volume (MT) 275,540 68,746 51,594 37,071 28,607 27,422 24,534 13,782 Source: USDEC

59 U.S. Exports of Lactose Full Year 2005 vs. Full Year % 55% 50% 42% 40% 30% 20% 18% 19% 19% 22% 10% 7% 0% 1% World Japan SE Asia China Mexico S. America Korea Taiwan Volume (MT) 183,941 49,708 44,870 23,960 18,295 13,740 6,562 5,252 Source: USDEC

60 Global whey figures Global cheese production Global whey production Global whey powder production Global whey products market Global whey commodities market* Global high value added whey derivatives market** 18 million mt 163 million mt 2.5 million mt US$ 3.4 billion US$ 2.8 billion US$ 600 million *Whey products including lactose, permeate, delactosed whey powder, sweet whey powder, acid whey powder, demineralised whey powder and whey protein concentrate account for approx. 83% equalling US$ 2.8 billion **High value-added derivatives, covering WPI, WPH and various fractions as well as lactose derivatives, account for 17% of the total whey products market size equalling US$ 600 million Source: 3A Business Consulting

61 Estimated whey products market size Annual growth Volume (MT) 2004 Value (MUS$) WP 1-2% 2,542,000 1,250 DWP 3-5% 400, WPC 2-5% 360, WPI/WPH 10-15% 30, LF/LP/IgG/GMP 10-20% α-lac/β-lac 10-20% 2, Source: 3A Business Consulting