U.S. EXPORTS Dairy Products - by Country, 2009 (pie chart) 69 Dairy Products, 2009 v (bar graph) 70 All Dry Whey, All Dry Whey -

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TABLE OF CONTENTS I. EXECUTIVE SUMMARY 5 II. UTILIZATION A. Dry Milk Products Utilization 1. Nonfat Dry Milk Compilation of Dry Milk Utilization Data 9 Nonfat Dry Milk Overview 10 Nonfat Dry Milk Domestic Sales in Relation to Production, 2009 v. 2008 10 Nonfat Dry Milk Four Year Comparison of Domestic Sales by End-Use, 2006-2009 11 2009 Domestic Sales of Nonfat Dry Milk (pie chart) 12 Four Year Comparison of Domestic Sales of Nonfat Dry Milk - Dairy, 2006-2009 13 Nonfat Dry Milk Domestic Sales by Method of Distribution, 2006-2009 14 Nonfat Dry Milk Manufacturers' and Resellers' Domestic Distribution, 2009 v. 2008 14 Nonfat Dry Milk Sales to Commodity Credit Corporation (CCC), 2006-2009 15 Utilization of CCC Stocks of Nonfat Dry Milk, 2006-2009 16 2. Dry Whole Milk Dry Whole Milk Overview 17 Supply and Distribution of Dry Whole Milk, 2006-2009 17 Dry Whole Milk Four Year Comparison of Domestic Sales by End-Use, 2006-2009 17 3. Dry Buttermilk Dry Buttermilk Overview 18 Supply and Distribution of Dry Buttermilk, 2006-2009 18 Dry Buttermilk Four Year Comparison of Domestic Sales by End-Use, 2006-2009 18 B. Condensed Milk Utilization Utilization of Condensed Milk Solids, 2009 & 2008 19 C. Whey Products Utilization Compilation of Whey Utilization Data 21 Utilization of Concentrated Whey in Human Foods, 2009 & 2008 22 Utilization of Dry Whey in Human Foods, 2009 & 2008 23 2009 Utilization of Dry Whey in Human Foods (pie chart) 24 Utilization of Whey Protein Concentrate in Human Foods, 2009 & 2008 25 2009 Utilization of Whey Protein Concentrate in Human Foods (pie chart) 26 Utilization of Whey Protein Concentrate in Human Foods (By Percentage), 2009 & 2008 27 2009 Utilization of Whey Protein Concentrate (25% - 49.9%) in Human Foods (pie chart) 28 2009 Utilization of Whey Protein Concentrate (50% - 89.9%) in Human Foods (pie chart) 29 Utilization of Whey Protein Isolate in Human Foods, 2009 & 2008 30 2009 Utilization of Whey Protein Isolate in Human Foods (pie chart) 31 Utilization of Whey & Whey Products in Animal Feeds, 2009 & 2008 32 Whey Products Summary of Domestic Sales by Distribution Outlet, 2009 & 2008 33 2009 Sales by Whey Products (bar graph) 34

III. D. Lactose Utilization Utilization of Reduced Lactose & Reduced Minerals Whey in Human Foods, 2009 & 2008 36 Utilization of Lactose in Human Foods, 2009 & 2008 37 2009 Utilization of Lactose in Human Foods (pie chart) 38 PRODUCTION A. Dry Milk Production Nonfat Dry Milk Production, Disappearance and Consumption, 1980-2009 40 Total Production and Commercial Sales of Nonfat Dry Milk, 2007-2009 41 Monthly Production of Dry Milks, 2009 & 2008 42 Four Year Comparison of Dry Milks Production, 2006-2009 (bar graph) 43 Nonfat Dry Milk Manufactured in the U.S., 2003-2009 (bar graph) 44 Dry Milk Production by States, 2009 & 2008 45 B. Whey & Lactose Production Estimated U.S. Fluid Whey Production, 2009 & 2008 (bar graph) 47 Estimated U.S. Fluid Whey and Whey Solids Production (by type) and Resulting Quantity of Whey Solids Further Processed, 1990-2009 48 Monthly Production of Whey & Whey Products, 2009 49 Monthly Production of Whey & Whey Products, 2008 50 Production of Whey & Whey Products, 2006-2009 51 Four Year Comparison of U.S. Whey Products Production, 2006-2009 (bar graph) 52 Dry Whey Manufactured in the U.S., 2003-2009 (bar graph) 53 Whey Protein Concentrate Manufactured in the U.S., 2003-2009 (bar graph) 54 Lactose Manufactured in the U.S., 2003-2009 (bar graph) 55 U.S. Dry Whey Production, 1970-2009 56 Production of Dry Whey & Lactose, by State, 2009 & 2008 57 C. Cheese Production Monthly Production of Cheese, 2009 59 Monthly Production of Cheese, 2008 60 Four Year Comparison of Cheese Production, 2006-2009 (bar graph) 61 Production of Cheese, by State, 2009 & 2008 62 D. Miscellaneous Production Data Production of Domestic Dry Milk and Whey Products and Imports of Casein, 1976-2009 64 Number of Milk Cows, Production per Cow and Milk Production, 1993-2009 65 Milk Production in the Ten Largest Dairy States, 2002-2009 66 Organic Food Category Share, 2007-2009 67

IV. U.S. EXPORTS Dairy Products - by Country, 2009 (pie chart) 69 Dairy Products, 2009 v. 2008 (bar graph) 70 All Dry Whey, 2004-2009 71 All Dry Whey - by Type, 2009 (pie chart) 72 Dry Sweet Whey, 2004-2009 73 Dry Sweet Whey, 2009 v. 2008 (bar graph) 74 Whey Protein Concentrate, 2004-2009 75 Whey Protein Concentrate, 2009 v. 2008 (bar graph) 76 High Value Whey Proteins (>80%), 2009 v. 2008 (bar graph) 77 Whey Proteins, 2009 v. 2008 (bar graph) 78 Lactose in Solid Form 2004-2009 79 Lactose, 2009 v. 2008 (bar graph) 80 Skim Milk Powder, 2004-2009 81 SMP/NDM, 2009 v. 2008 (bar graph) 82 Whole Milk Powder, 2004-2009 83 Fluid Milk & Cream, 2004-2009 84 Fluid Milk & Cream, 2009 v. 2008 (bar graph) 85 Butter, 2004-2009 86 Butter, 2009 v. 2008 (bar graph) 87 Cheese - All types, 2004-2009 88 Cheese, 2009 v. 2008 (bar graph) 89 Ice Cream, 2004-2009 90 Ice Cream, 2009 v. 2008 (bar graph) 91 Yogurt, 2004-2009 92 Anhydrous Milkfat, 2004-2009 93 Milk Albumin (WPI), 2004-2009 94 V. CASEIN IMPORTS VI. Casein Imports, 1976-2009 96 PRODUCT DEFINITIONS Milk Product Definitions 98 Whey Product Definitions 99 VII. ADPI INFORMATION & MEETINGS About the American Dairy Products Institute 102 Upcoming Conferences/Seminars 103 Jim Page Memorial Scholarship 104

2009 DAIRY PRODUCTS UTILIZATION & PRODUCTION TRENDS EXECUTIVE SUMMARY The following are highlights of Dry Milk production and major end-use markets for the year ending December 31, 2009: NONFAT DRY MILK Nonfat Dry Milk production in 2009 was 1,509.1 million pounds, a decrease of 10.1 million pounds, or 0.7% from 2008. Total 2009 domestic commercial sales were 1,327.0 million pounds, a decrease of 39.9 million pounds, or 2.9% from 2008. The top five domestic end-uses of NDM, by volume, and the percent of the market each shared was: o Dairy 779.0 million pounds, 58.7% o Confectionery Industry 306.6 million pounds, 23.1% o Infant Formulas 74.3 million pounds, 5.6% o Baking Industry 50.4 million pounds, 3.8% o Prepared Dry Mixes & Dry Blend Manufacturers 41.1 million pounds, 3.1% DRY WHOLE MILK Dry Whole Milk production in 2009 totaled 59.6 million pounds, an increase of 9.5 million pounds (19.0%) from 2008. Total domestic sales were 47.1 million pounds, an increase of 4.2 million pounds (9.8%) from 2008. The confectionery industry remained the principal market, utilizing 39.5 million pounds -- over 83% of the total dry whole milk sold domestically in 2009. DRY BUTTERMILK Dry Buttermilk production for 2009 totaled 74.5 million pounds, an increase of 2.0 million pounds (2.8%) from 2008. Total domestic sales, reflecting both dry buttermilk and dry buttermilk product, were 64.9 million pounds, a decrease of 0.6 million pounds (-0.9%) from 2008. The principal markets were: baking industry, 37.6 million pounds; dairy industry, 12.6 million pounds and prepared dry mixes & dry blend manufacturers, 5.6 million pounds.

WHEY & MODIFIED WHEY PRODUCTS The following are highlights of Whey and Modified Whey Products production and major end-use markets for the year ending December 31, 2009: Total USDA reported production of whey and modified whey products for 2009 was 2,365.0 million pounds, a decrease of 141.5 million pounds (-5.6%) from 2008. Production of the various whey products in 2008 (in millions of pounds and percent difference from 2008) was: o Concentrated Whey Solids, 90.8 (-12.6%) o Dry Whey, 1,001.2 (-7.5%) o Reduced Lactose & Reduced Minerals Whey, 83.6 (-5.8%) o Whey Protein Concentrate, 415.0 (-6.3%) o Whey Protein Isolate, 51.9 (+18.0) o Lactose, 722.6 (-3.1%) Whey gproducts gsales gfor ghuman gfood gduring g2009, gcompiled gfrom gthe gadpi s gindustry gsurvey, gwere gas follows: o Concentrated Whey, 51.7 million pounds o Dry Whey, 446.6 million pounds o Reduced Lactose & Reduced Minerals Whey, 36.9 million pounds o Whey Protein Concentrate rate, 175.7 million pounds o Whey Protein Isolate, 51.9 million pounds o Lactose, 487.5 million pounds The whey solids reported as being utilized in human foods in 2009 totaled 1,250.3 million pounds (1,456.3 million pounds in 2008), a decrease of 14.1%. Whey solids reported sold for use in animal feed totaled 531.8 million pounds in 2009 (566.2 million pounds in 2008), a decrease of 6.1%. Major end-use categories, by product, were: o Concentrated Whey (solids basis) Dairy Industry 51.1 million pounds o Dry Whey Dairy Industry 241.4 million pounds Dry Blends & Prepared Dry Mixes 84.8 million pounds Baking Industry 67.6 million pounds Confectionery Industry 43.8 million pounds

o Reduced Lactose & Reduced Minerals Whey Confectionery Industry 25.9 million pounds Dairy Industry 7.0 million pounds Dry Blends & Prepared Dry Mixes 2.2 million pounds o Whey Protein Concentrate Nutraceuticals, Pharmaceuticals, Special Dietary Use 57.6 million pounds Dairy Industry 43.5 million pounds Dry Blends & Prepared ed Dry Mixes 34.4 million pounds Infant Formulas 32.9 million pounds o Whey Protein Isolate Nutraceuticals, Pharmaceuticals, Special Dietary Use 30.2 million pounds Sports Nutrition 9.7 million pounds Infant Formulas 4.4 million pounds o Lactose Confectionery Industry 220.7 million pounds Infant Formulas 181.4 million pounds Prepared Dry Mixes 13.0 million pounds Chemicals 8.8 million pounds o Whey Solids Used in Animal Feeds Swine Feeds 178.7 million pounds Dairy/Calf/Cattle Feeds 72.6 million pounds All Other Feeds 280.5 million pounds

D A I R Y P R O D U C T S U T I L I Z A T I O N A N D P R O D U C T I O N T R E N D S 2 0 0 9 DRY MILK PRODUCTS UTILIZATION W W W. A D P I. O R G

Compilation of Dry Milk Utilization Data This 2009 compilation of dry and condensed milk utilization represents the 62 nd annual industry-wide survey of end-uses for dry milk products. To the best of our knowledge, this Survey represents the only comprehensive analysis of how dry milk products are ultimately utilized in the commercial marketplace. Members of the American Dairy Products Institute, other cooperating processors and distributors of dry milk products participated in this Survey, reflecting approximately 92% of the total domestic distribution. With such comprehensive industry coverage, projections have been made from the survey 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 its 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 all condensed and dry milk processors, marketers/distributors and users is included in this 2009 publication. Such information presents a more complete picture of the manufactured milk products industry by providing an insight into supply-demand patterns and their relationship to overall marketing activities. Continued market expansion by the development of new uses for the various condensed and dry milk products is necessary for growing this segment of the dairy industry and reflects an ongoing purpose of the American Dairy Products Institute. Copyright 2010 by American Dairy Products Institute Printed in U.S.A

NONFAT DRY MILK: Overview Total production: 1,509,111,000 pounds - a decrease of 10.1 million pounds, or 0.7% from 2008. Total domestic commercial sales: 1,327.0 million pounds - a decrease of 39.9 million pounds, or 2.9% from 2008. Of the traditional primary markets for nonfat dry milk, confectionery and dairy industry reflected increased use in 2009. Infant formulas and baking industry reflected decreased use in 2009. Manufacturers' sales increased 10.7 million pounds, accounting for 76.0% of total sales. Resellers' sales decreased 50.6 million pounds, accounting for 24% of total sales. In 2009, net domestic sales accounted for 84.2% of the total supply while government purchases, exports and shipments to territories accounted for 15.8% of the total supply. In 2008, net domestic sales accounted for 91.9% of the total supply while government purchases, exports and shipments to territories accounted for 8.1% of the total supply. DOMESTIC SALES IN RELATION TO PRODUCTION, 2009 & 2008 2009 2008 1 Million Million Pounds Percent Pounds Percent Production of Nonfat Dry Milk 1,509.1 1,519.2 Adjustment for increases or decreases in commercial stocks 65.6 (32.3) Plus USDA sales Plus imports 1.2 0.1 Total Supply 1,575.9 10% 1,487.0 10% Total USDA and DPPSP purchases 244.4 115.6 Shipments to territories 2.0 2.0 Commercial exports 2.5 2 2.5 2 Total government purchases, exports, shipments to territories 248.9 15.8% 120.1 8.1% NET DOMESTIC SALES 3 1,327.0 84.2% 1,366.9 91.9% 1 Revised in accordance with USDA figures. 2 Industry estimate. 3 "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.

FOUR YEAR COMPARISON OF DOMESTIC SALES OF NONFAT DRY MILK BY END-USE (millions of pounds) Change 2008-2009 2006 2007 2008 1 2009 Mil. Lbs. Percent Dairy Industry 894.8 72.8% 73 60.5% 713.5 52.2% 779.0 58.7% + 65.5 + 9.2% Confectionery Industry 120.5 9.8% 191.8 15.9% 203.7 14.9% 306.6 23.1% + 102.9 + 50.5% Infant Formulas 2 72.5 5.9% 14.5 1.2% 91.6 6.7% 74.3 5.6% - 17.3-18.9% Baking Industry 50.4 4.1% 96.5 8.0% 69.7 5.1% 50.4 3.8% - 19.3-27.7% Prepared Dry Mixes & Dry Blend Manufacturers 38.1 3.1% 31.4 2.6% 28.7 2.1% 41.1 3.1% + 12.4 + 43.2% Nutraceuticals, Pharmaceuticals, Special Dietary Use 11.1 0.9% 53.1 4.4% 35.6 2.6% 33.2 2.5% - 2.4-6.7% Beverage Manufacturers 6.1 0.5% 53.1 4.4% 16.4 1.2% 13.3 1.0% - 3.1-18.9% Institutional Use 14.8 1.2% 2.4 0.2% 10.9 0.8% 6.6 0.5% - 4.3-39.4% Soup Manufacturers 1.2 0.1% 2.4 0.2% 12.3 0.9% 5.3 0.4% - 7.0-56.9% Meat Industry 2.5 0.2% 6.0 0.5% 4.1 0.3% 1.3 0.1% - 2.8-68.3% Margarine Manufacturers 1.2 0.1% 6.0 0.5% 9.5 0.7% % - 9.5-10% Chemicals % 1.2 0.1% % % % Animal Feed 3 7.4 0.6% 8.4 0.7% 21.8 1.6% 5.3 0.4% - 16.5-75.7% All Other Uses 8.6 0.7% 9.8 0.8% 149.1 10.9% 10.6 0.8% - 138.5-92.9% TOTAL DOMESTIC NON- GOVERNMENT USE 1,229.2 10% 1,206.6 10% 1,366.9 10% 1,327.0 10% - 39.9-2.9% 1 Revised. 2 The figure shown in 2007 accurately reflects the industry data submitted to ADPI; however, the comparatively low volume reported appears to be an anomaly and suggests there may have been misclassification of data or other reporting errors by the reporting entities. 3 Nonfat Dry Milk processed originally for human consumption.

2009 Domestic Sales of Nonfat Dry Milk (Total - 1,327.0 million lbs.) Baking Industry 3.8% Infant Formulas 5.6% All Other Uses 8.8% Confectionery Industry 23.1% Dairy Industry 58.7%

FOUR YEAR COMPARISON OF DOMESTIC SALES OF NONFAT DRY MILK - DAIRY (millions of pounds) Change 2008-2009 2006 2007 2008 1 2009 Mil. Lbs. Percent Hard Cheese 561.0 62.7% 390.6 53.5% 329.6 46.2% 398.9 51.2% + 69.3 + 21.0% Frozen Desserts 77.8 8.7% 63.5 8.7% 91.3 12.8% 112.2 14.4% + 20.9 + 22.9% Cultured Products 86.8 9.7% 69.3 9.5% 109.9 15.4% 102.0 13.1% - 7.9-7.2% Cottage & Cream Cheese 51.9 5.8% 43.8 6.0% 49.9 7.0% 44.4 5.7% - 5.5-11.0% Dry Dairy Blends 35.8 4.0% 36.5 5.0% 30.7 4.3% 24.1 3.1% - 6.6-21.5% Sales of Packaged NDM 24.2 2.7% 19.0 2.6% 20.7 2.9% 22.6 2.9% + 1.9 + 9.2% Fluid Milk Fortification & Drink Mixes 3.6 0.4% 3.6 0.5% 8.6 1.2% 7.8 1.0% - 0.8-9.3% Sales for all other dairy uses 53.7 6.0% 103.7 14.2% 72.8 10.2% 67.0 8.6% - 5.8-8.0% TOTAL DOMESTIC SALES 894.8 10% 73 10% 713.5 10% 779.0 10% + 65.5 + 9.2% 1 Revised in accordance with USDA figures.

DOMESTIC SALES BY METHOD OF DISTRIBUTION In millions of pounds Change 2006 2007 1 2008 2009 2008-2009 Direct by Manufacturers 934.2 868.8 997.8 1,008.5 + 10.7 Through Resellers 295.0 337.8 369.1 318.5-50.6 TOTAL 1,229.2 1,206.6 1,366.9 1,327.0-39.9 In percent of total 2006 2007 2008 2009 Change 2008-2009 Direct by Manufacturers 76.0% 72.0% 73.0% 76.0% + 3.0% Through Resellers 24.0% 28.0% 27.0% 24.0% - 3.0% TOTAL 10% 10% 10% 10% MANUFACTURERS' DOMESTIC DISTRIBUTION 2009 2008 1 Mil. Lbs. Percent Mil. Lbs. Percent To Resellers: 318.5 24.0% 369.1 27.0% Direct Sales To: Dairy Industry 583.0 43.9% 533.6 39.0% Confectionery Industry 257.2 19.4% 134.0 9.8% Prepared Dry Mixes and Dry Blend Manufacturers 29.2 2.2% 23.6 1.8% Baking Industry 23.2 1.7% 49.8 3.6% Nutraceuticals, Pharmaceuticals, Special Dietary Use 28.3 2.1% 23.1 1.7% Infant Formulas 64.5 4.9% 61.8 4.5% Beverage Manufacturers % 9.9 0.7% Institutional Use 5.0 0.4% 10.7 0.8% Meat Industry 1.0 0.1% 3.2 0.2% Soup Manufacturers 5.0 0.4% 12.2 0.9% Margarine Manufacturers % 5.9 0.4% Chemicals % % Animal Feed 2 4.0 0.3% 18.6 1.4% All Other 8.1 0.6% 111.4 8.2% TOTAL 1,327.0 10% 1,366.9 10% RESELLERS' DOMESTIC DISTRIBUTION 2009 2008 1 Mil. Lbs. Percent Mil. Lbs. Percent Dairy Industry 196.0 61.6% 179.9 48.6% Baking Industry 27.2 8.5% 19.9 5.4% Prepared Dry Mixes and Dry Blend Manufacturers 11.9 3.7% 5.1 1.4% Confectionery Industry 49.4 15.5% 69.7 18.8% Institutional Use 1.6 0.5% 0.2 0.2% Meat Industry 0.3 0.1% 0.9 0.3% Beverage Manufacturers 13.3 4.2% 6.5 1.8% Soup Manufacturers 0.3 0.1% 0.1 0.1% Nutraceuticals, Pharmaceuticals, Special Dietary Use 4.9 1.5% 12.4 3.4% Margarine Manufacturers % 3.6 1.0% Infant Formulas 9.8 3.1% 29.7 7.9% Chemicals % % Animal Feed 2 1.3 0.4% 3.2 0.9% All Other 2.5 0.8% 37.9 10.2% TOTAL 318.5 10% 369.1 10% Revised in accordance with USDA figures. 2 Nonfat Dry Milk processed originally for human consumption.

NONFAT DRY MILK SALES TO CCC, 2006-2009 (millions of pounds) Month 2006 2007 2008 2009 January 35.6 February 34.1 March 1.3 21.2 April 16.9 25.5 May 27.2 8.9 June 17.7 24.2 July 0.9 12.8 August 2.4 September (3.1) October 37.4 0.1 November 36.1 December 41.1 TOTAL 64.0 114.6 161.7

UTILIZATION OF CCC STOCKS OF NONFAT DRY MILK, 2006-2009 1 (millions of pounds) 2006 2007 2008 2009 Uncommitted supplies as of beginning of year CCC Purchases (contract basis) 63.9 268.9 Utilizations Sales-- Livestock Feed Restricted use (feed) Unrestricted Sales Cattle Feed Program Casein Production 0.1 16.7 1.0 3.2 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 UHT Milk Exchange Nonprofit 501(c)3 Exchange Foreign Donations Title II Furnished as an ingredient in blended foods Section 416 10.1 25.4 5.3 1.2 31.1 25.1 Food for Progress Total Utilization 119.2 33.6 3.0 66.8 Uncommitted supplies as of December 31 1 Annual figures based on Federal Government fiscal year (October 1 - September 30). Totals may not add due to rounding and inventory adjustments. 2 Based on orders issued for shipment. 14.9 18.7 1.0 2.0 1.0 34.1 24.1 7.6 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.

DRY WHOLE MILK: Overview Dry whole milk production totaled 59.6 million pounds for 2009, an increase of 9.5 million pounds or 19.0% from 2008. Total domestic sales totaled 47.1 million pounds for 2009, an increase of 4.2 million pounds or 9.8% from 2008. Confectionery remains the principal market, utilizing 39.5 million pounds. - - - SUPPLY AND DISTRIBUTION OF DRY WHOLE MILK (millions of pounds) 2006 2007 2008 1 2009 Change 2008-2009 Mil. Lbs. Percent Production of Dry Whole Milk 30.6 31.8 50.1 59.6 + 9.5 + 19.0% Change in Manufacturers' Stocks - 0.5-1.9-1.4-1.9-0.5 + 35.7% Imports 0.5 4.3 0.9 7.3 + 6.4 +711.1% Total Distributed 30.6 34.2 49.6 65.0 +15.4 + 31.0% Total Commercial & USDA Exports 3.4 4.4 6.6 17.8 +11.2 +17% Less Shipments to Territories 0.1 2 0.1 2 0.1 2 0.1 2 % NET DOMESTIC SALES 27.1 29.7 42.9 47.1 + 4.2 + 9.8% - - - FOUR YEAR COMPARISON OF DOMESTIC SALES BY END-USE (millions of pounds) 2006 2007 2008 1 2009 Change 2008-2009 Mil. Lbs. Percent Confectionery Industry 22.3 21.2 33.4 39.5 + 6.1 + 18.3% Dairy Industry 1.0 2.0 2.9 2.3-0.6-20.7% Baking Industry 0.4 1.1 1.7 1.6-0.1-5.9% Dry Blends 1.1 2.0 1.5 1.2-0.3-2% Prepared Dry Mixes & Dry Blend Manufacturers 0.1 0.8 0.9 1.1 + 0.2 + 22.2% Packaged for Retail Use 2.4 2.1 0.8-1.3-61.9% Infant Formulas 2.0 0.1 0.4 + 0.4 +10% Institutional Use 2.0 0.1 0.1 0.1 % Animal Feed 3 0.2 0.1 0.3 0.1-0.2-66.7% NET DOMESTIC SALES 27.1 29.7 42.9 47.1 + 4.2 + 9.8% 1 Revised in accordance with USDA figures. 2 Estimate. 3 Dry whole milk processed originally for human consumption.

DRY BUTTERMILK: Overview Dry buttermilk production totaled 74.5 million pounds for 2009, an increase of 2.0 million pounds from 2008. Total domestic sales decreased to 64.9 million pounds, a decrease of 0.6 million pounds, or 0.9% from 2008. Principal markets were: Baking, utilizing, 37.6 million pounds; Dairy, utilizing 12.6 million pounds, and Prepared Dry Mixes and Dry Blends, utilizing 5.6 million pounds. - - - SUPPLY AND DISTRIBUTION OF DRY BUTTERMILK 1 (millions of pounds) 2006 2007 2008 2 2009 Change 2008-2009 Mil.Lbs. Percent Production of Dry Buttermilk 66.9 81.4 72.5 74.5 + 2.0 + 2.8% Less quantity not produced for human food 1.0 1.0 1.1 1.2 + 0.1 + 9.1% NET DISTRIBUTED FOR HUMAN FOOD 65.9 80.4 71.4 73.3 + 1.9 + 2.7% - - - FOUR YEAR COMPARISON OF DOMESTIC SALES BY END-USE 3 (millions of pounds) 2006 2007 2008 2009 Change 2008-2009 Mil.Lbs. Percent Baking Industry 36.1 39.8 47.9 37.6-10.3-21.5% Dairy Industry 7.5 6.9 10.6 12.6 + 2.0 + 18.9% Prepared Dry Mixes & Dry Blend Manufacturers 4.1 1.7 4.1 5.6 + 1.5 + 36.6% Confectionery Industry 0.7 0.7 1.5 0.8-0.7-46.7% Institutional Use 1.8 0.5 % Animal Feed 4 0.8 0.1 0.9-0.9-10% All Other Uses 0.1 0.1 0.5 8.3 + 7.8 +1,560% NET DISTRIBUTED FOR HUMAN FOOD 51.1 49.8 65.5 64.9-0.6-0.9% 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.

UTILIZATION OF CONDENSED MILK SOLIDS - 2009 & 2008 1 (millions of pounds) NONFAT MILK WHOLE MILK BUTTERMILK 2009 Volume 2 Percent Volume 2 Percent Volume 2 Percent Dairy Industry Frozen Desserts, Ice Cream Mixes 108.4 30.4% 3.8 31.4% 4.2 64.6% Hard Cheese 165.9 46.5% % % Cultured Products 45.8 12.8% 3.4 28.1% % Fluid Milk Fortification % % % Other 10.9 3.1% 4.7 38.8% % Total 331.0 92.8% 11.9 98.3% 4.2 64.6% Wet Blends Bakery Industry 4.3 1.2% % % Infant Formulas 15.3 4.3% % % Dairy Industry 5.7 1.6% 0.2 1.7% 2.3 35.4% Mixes 0.3 0.1% % % Chemicals % % % Confectionery Industry % % % Total 25.6 7.2% 0.2 1.7% 2.3 35.4% Confectionery Industry % % % TOTAL 356.6 10% 12.1 10% 6.5 10% GRAND TOTAL: 375.2 2008 Volume 2 Percent Volume 2 Percent Volume 2 Percent Dairy Industry Frozen Desserts, Ice Cream Mixes 100.5 26.1% 5.4 20.3% 0.1 3.4% Hard Cheese 186.3 48.3% % % Cultured Products 66.8 17.3% 15.6 58.6% % Fluid Milk Fortification 2.4 0.6% % % Other 12.8 3.3% 3.9 14.7% 0.2 6.9% Total 368.8 95.6% 24.9 93.6% 0.3 10.3% Wet Blends Bakery Industry 0.1 0.1% % % Infant Formulas 10.5 2.7% % % Dairy Industry 6.3 1.6% 1.5 5.6% 2.6 89.7% Mixes % % % Chemicals % % % Confectionery Industry % 0.1 0.4% % Total 16.9 4.4% 1.6 6.0% 2.6 89.7% Confectionery Industry % 0.1 0.4% % TOTAL 385.7 10% 26.6 10% 2.9 10% GRAND TOTAL: 415.2 1 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.

D A I R Y P R O D U C T S U T I L I Z A T I O N A N D P R O D U C T I O N T R E N D S 2 0 0 9 WHEY PRODUCTS UTILIZATION W W W. A D P I. O R G

Compilation of Whey Utilization Data This 2009 compilation of whey products utilization represents the 35 th industrywide survey of end-uses for whey products. To the best of our knowledge, this Survey represents the only comprehensive analysis of how whey products are ultimately utilized in the commercial marketplace. Members of the American Dairy Products Institute, other cooperating processors and resellers participated in this Survey reflecting approximately 97% of the USDAreported whey solids processed during 2009. 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 for whey products. The American Dairy Products Institute expresses its 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 2009 publication. The inclusion of such information presents a more complete picture of the whey products industry by providing an insight into supplydemand patterns and their relationship to overall marketing activities. Continued market expansion by the development of new uses for the various whey products is necessary for growing this segment of the dairy industry and reflects an ongoing purpose of the American Dairy Products Institute. Copyright 2010 by American Dairy Products Institute Printed in U.S.A

UTILIZATION OF CONCENTRATED WHEY IN HUMAN FOODS Comparison of 2009 & 2008 End-Uses 1 2009 Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Dairy Industry 49.0 49.0 10% 2.1 2.1 79.3% Wet Blends % 0.6 0.6 20.7% Total 49.0 49.0 10% 2.7 2.7 10% GRAND TOTAL: 51.7 2008 2 Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Dairy Industry 98.4 98.4 10% 1.6 1.6 10% Total 98.4 98.4 10% 1.6 1.6 10% GRAND TOTAL: 10 1 Volume figures (solids basis) in millions of pounds. 2 Revised in accordance with USDA figures.

UTILIZATION OF DRY WHEY IN HUMAN FOODS Comparison of 2009 & 2008 End-Uses 1 2009 Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Dairy Industry 146.2 146.2 58.5% 94.5 0.7 95.2 48.4% Dry Blends & Prepared Dry Mixes 50.8 50.8 20.3% 34.0 34.0 17.3% Confectionery Industry 3 3 12.0% 13.8 13.8 7.0% Baking Industry 16.5 16.5 6.6% 50.9 0.2 51.1 26.0% Margarine Manufacturers 4.5 4.5 1.8% % Nutraceuticals, Pharmaceuticals, Special Dietary Use 1.5 1.5 0.6% 0.7 0.7 0.3% Institutional Use 0.2 0.2 0.1% 1.7 1.7 0.9% All Others 0.2 0.2 0.1% 0.2 0.2 0.1% Total 249.9 249.9 10% GRAND TOTAL: 446.6 2008 2 195.8 0.9 196.7 10% Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Dairy Industry 160.2 160.2 53.5% 95.2 1.9 97.1 42.8% Dry Blends & Prepared Dry Mixes 68.3 68.3 22.8% 45.3 0.1 45.4 2% Baking Industry 32.0 32.0 10.7% 78.4 0.3 78.7 34.7% Confectionery Industry 30.3 30.3 10.1% 4.8 4.8 2.1% Margarine Manufacturers 6.6 6.6 2.2% % Nutraceuticals, Pharmaceuticals, Special Dietary Use 2.1 2.1 0.7% 0.9 0.9 0.4% Total 1 Volume figures in millions of pounds. 2 Revised in accordance with USDA figures. 299.5 299.5 10% GRAND TOTAL: 526.4 224.6 2.3 226.9 10%

2009 Utilization of Dry Whey in Human Foods (Total - 446.6 million lbs.) All Other Uses 11.8% Baking Industry 15.1% Dairy Industry 54.1% Dry Blends 19.0%

UTILIZATION OF WHEY PROTEIN CONCENTRATE IN HUMAN FOODS Comparison of 2009 & 2008 End-Uses 1 2009 Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Dairy Industry 43.5 43.5 32.0% % Nutraceuticals, Pharmaceuticals, Special Dietary Use 39.3 39.3 28.9% 18.3 18.3 46.1% Infant Formulas 32.9 32.9 24.2% % Dry Blends & Prepared Dry Mixes 18.3 18.3 13.4% 16.1 16.1 40.3% Wet Blends 0.8 0.8 0.6% 1.8 1.8 4.6% Meat Manufacturers 0.8 0.8 0.6% % Baking Industry 0.1 0.1 0.1% 2.9 2.9 7.3% Confectionery Industry 0.1 0.1 0.1% 0.2 0.2 0.5% Institutional Use % 0.5 0.5 1.2% All Others 0.1 0.1 0.1% % Total 135.9 135.9 10% 39.8 39.8 10% GRAND TOTAL: 175.7 2008 2 Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Dairy Industry 75.9 75.9 35.8% 4.8 4.8 12.2% Infant Formulas 47.3 47.3 22.3% % Nutraceuticals, Pharmaceuticals, Special Dietary Use 46.0 46.0 21.7% 9.6 9.6 24.8% Dry Blends & Prepared Dry Mixes 27.6 27.6 13.0% 21.7 21.7 55.7% Wet Blends 5.8 5.8 2.7% % Baking Industry 3.4 3.4 1.6% 2.8 2.8 7.3% Confectionery Industry 2.3 2.3 1.1% % Meat Manufacturers 1.5 1.5 0.7% % All Others 2.3 2.3 1.1% % Total 212.1 212.1 10% 38.9 38.9 10% 1 Volume figures in millions of pounds. 2 Revised in accordance with USDA figures. GRAND TOTAL: 251.0

2009 Utilization of Whey Protein Concentrate in Human Foods (Total - 175.7 million lbs.) All Other Uses 4.1% Infant Formulas 18.7% Dairy Industry 24.8% Dry Blends and Prepared Dry Mixes 19.6% Nutraceuticals Pharmaceuticals Special Dietary 32.8%

UTILIZATION OF WHEY PROTEIN CONCENTRATE IN HUMAN FOODS (BY PERCENTAGE) Comparison of 2009 & 2008 End-Uses 1 2009 25.0% - 49.9% 5% - 89.9% Market Category Total Percent Total Percent Dairy Industry 42.1 43.0% 1.4 1.8% Nutraceuticals, Pharmaceuticals, Special Dietary Use 0.9 0.9% 56.8 73.4% Dry Blends & Prepared Dry Mixes 27.6 28.2% 6.8 8.7% Infant Formulas 24.0 24.4% 8.9 11.6% Baking Industry 2.9 2.9% 0.2 0.2% Wet Blends % 2.6 3.4% Confectionery Industry 0.2 0.2% 0.2 0.2% Meat Manufacturers 0.3 0.3% 0.6 0.7% All Others 0.2 0.1% % Total 98.2 10% 77.5 10% GRAND TOTAL: 175.7 2008 2 25.0% - 49.9% 5% - 89.9% Market Category Total Percent Total Percent Dairy Industry 69.1 43.9% 11.6 12.4% Nutraceuticals, Pharmaceuticals, Special Dietary Use 1.6 1.0% 54.1 57.8% Dry Blends & Prepared Dry Mixes 43.9 27.9% 5.3 5.7% Infant Formulas 34.9 22.2% 12.5 13.3% Wet Blends 3.6 2.3% 2.2 2.3% Baking Industry 3.2 2.0% 3.0 3.2% Confectionery Industry % 2.3 2.5% Meat Manufacturers 0.3 0.2% 1.0 1.1% All Others 0.8 0.5% 1.6 1.7% Total 157.4 10% 93.6 10% 1 Volume figures in millions of pounds. 2 Revised in accordance with USDA figures. GRAND TOTAL: 251.0

2009 Utilization of Whey Protein Concentrate (25.0% - 49.9%) in Human Foods (Total - 98.2 million lbs.) All Other Uses 3.7% Infant Formulas 24.4% Dairy Industry 42.9% Dry Blends and Prepared Dry Mixes 28.0% Nutraceuticals Pharmaceuticals Special Dietary 1.0%

2009 Utilization of Whey Protein Concentrate (5% - 89.9%) in Human Foods (Total - 77.5 million lbs.) All Other Uses 4.6% Dairy Industry 1.8% Infant Formulas 11.5% Dry Blends and Prepared Dry Mixes 8.8% Nutraceuticals Pharmaceuticals Special Dietary 73.3%

UTILIZATION OF WHEY PROTEIN ISOLATE IN HUMAN FOODS Comparison of 2009 & 2008 End-Uses 1 2009 Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Total Percent Total Percent Nutraceuticals, Pharmaceuticals, Special Dietary Use 22.6 51.4% 7.6 95.0% Sports Nutrition 9.7 22.0% % Infant Formulas 4.4 10.1% % Prepared Dry Mixes 4.0 9.2% % Dairy Industry 1.2 2.8% % Baking Industry 0.4 0.9% % All Others 1.6 3.6% 0.4 5.0% Total 43.9 10% 8.0 10% GRAND TOTAL: 51.9 2008 2 Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Total Percent Total Percent Prepared Dry Mixes 14.7 38.7% % Nutraceuticals, Pharmaceuticals, Special Dietary Use 7.4 19.5% 5.0 92.1% Baking Industry 4.1 10.9% % Dairy Industry 3.6 9.4% 0.4 7.9% Wet Blends 3.3 8.6% % Confectionery Industry 3.0 8.0% % All Others 1.9 4.9% % Total 38.0 10% 5.4 10% 1 Volume figures in millions of pounds. 2 Revised in accordance with USDA figures. GRAND TOTAL: 43.4

2009 Utilization of Whey Protein Isolate in Human Foods (Total - 51.9 million lbs.) All Other Uses 14.6% Infant Formulas 8.5% Sports Nutrition 18.7% Nutraceuticals Pharmaceuticals Special Dietary 58.2%

UTILIZATION OF WHEY & WHEY PRODUCTS IN ANIMAL FEEDS 1 Comparison of 2009 & 2008 End-Uses 2 2009 2008 Market Category Sweet Acid Total Percent Sweet Acid Total Percent Dairy/Calf/Cattle Feeds Concentrated Whey 12.4 12.4 2.3% % Dried Whey 12.7 12.7 2.4% 16.1 16.1 2.8% Dried Whey Product 9.8 9.8 1.8% 10.2 10.2 1.8% Whey Protein Concentrate 24.5 24.5 4.6% 30.3 30.3 5.4% Lactose 1.4 1.4 0.3% % Whey Solids in Wet Blends 11.8 11.8 2.2% 12.3 12.3 2.2% Swine Feeds Concentrated Whey % 0.1 0.1 0.1% Dried Whey 52.7 52.7 9.9% 46.1 46.1 8.0% Dried Whey Product 49.1 49.1 9.2% 0.2 0.2 0.2% Whey Protein Concentrate 2.3 2.3 0.4% 1.4 1.4 0.3% Lactose 13.5 13.5 2.5% 9.8 9.8 1.6% Whey Permeate 61.1 61.1 11.5% 68.6 68.6 12.1% Pet Foods Dried Whey % 0.5 0.5 0.1% Dried Whey Product % 30.8 30.8 5.4% Other Feeds Concentrated Whey 28.6 28.6 5.4% 3.9 3.9 0.7% Dried Whey 68.5 68.5 12.9% 51.5 51.5 9.1% Dried Whey Product % 2.0 2.0 0.4% Whey Protein Concentrate 23.0 23.0 4.3% 26.2 26.2 4.6% Lactose 7.3 7.3 1.4% 6.2 6.2 1.1% Whey Permeate % 219.9 219.9 38.8% Whey Solids in Wet Blends % % Feed Use, Undesignated 153.1 153.1 28.9% 30.1 30.1 5.3% Total 522.0 9.8 531.8 10% 566.2 566.2 10% 1 Includes both direct and indirect sales. 2 Volume figures in millions of pounds.

SUMMARY OF DOMESTIC SALES BY DISTRIBUTION OUTLET, 2009-2008 1 2009 2008 2 Direct Indirect Direct Indirect Human Food Volume Percent Volume Percent Volume Percent Volume Percent Concentrated Whey 49.0 5.2% 2.7 0.9% 98.4 8.6% 1.6 0.5% Dry Whey 249.9 26.6% 196.7 62.9% 299.5 26.1% 226.9 73.1% Reduced Lactose Whey & Reduced Minerals Whey 21.0 2.2% 15.9 5.1% 25.8 2.3% 6.8 2.2% Whey Protein Concentrate 135.9 14.5% 39.8 12.7% 212.1 18.5% 38.9 12.5% Lactose 438.1 46.7% 49.4 15.8% 472.2 41.2% 30.7 9.9% Whey Protein Isolate 43.9 4.7% 8.0 2.6% 38.0 3.3% 5.4 1.7% Total Human Food 937.8 10% 312.5 10% 1,146.0 10% 310.3 10% Animal Feed Concentrated Whey 39.1 14.5% 1.9 0.7% 2.9 0.7% 1.1 0.9% Dried Whey 106.3 39.5% 27.6 10.5% 79.8 18.3% 34.4 26.7% Dried Whey Product 9.9 3.7% 49.0 18.7% 11.8 2.7% 31.4 24.3% Whey Protein Concentrate 30.4 11.3% 19.4 7.4% 29.2 6.7% 28.7 22.2% Lactose 22.2 8.2% % 15.9 3.6% 0.1 0.1% Whey Permeate 61.1 22.7% % 288.5 66.0% % Whey Solids in Wet Blends % 11.8 4.5% 0.9 0.2% 11.4 8.8% Feed Use, Undesignated 0.1 % 153.0 58.2% 8.2 1.9% 21.9 17.0% Total Animal Feed 269.1 10% 262.7 10% 437.2 10% 129.0 10% Total 1,206.9 575.2 1,583.2 439.3 GRAND TOTAL 1,782.1 2,022.5 1 Volume figures in millions of pounds. 2 Revised in accordance with USDA figures.

2009 SALES BY WHEY PRODUCT 50 45 40 35 30 25 20 Human Food Animal Feed 15 10 5 Concentrated Whey Dry Whey RLW & RMW WPC Lactose WPI Whey Permeate Expressed in millions of pounds

D A I R Y P R O D U C T S U T I L I Z A T I O N A N D P R O D U C T I O N T R E N D S 2 0 0 9 LACTOSE UTILIZATION W W W. A D P I. O R G

UTILIZATION OF REDUCED LACTOSE & REDUCED MINERALS WHEY IN HUMAN FOODS Comparison of 2009 & 2008 End-Uses 1 2009 Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Confectionery Industry 10.5 10.5 5% 15.4 15.4 96.8% Dairy Industry 6.7 6.7 31.9% 0.3 0.3 1.6% Dry Blends & Prepared Dry Mixes 2.1 2.1 10.2% 0.1 0.1 0.8% Baking Industry 0.8 0.8 3.6% 0.1 0.1 0.8% All Others 0.9 0.9 4.3% % Total 21.0 21.0 10% 15.9 15.9 10% GRAND TOTAL: 36.9 2008 2 Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Sweet Acid Total Percent Sweet Acid Total Percent Confectionery Industry 13.4 13.4 52.1% 6.2 6.2 91.1% Dairy Industry 7.8 7.8 30.4% 0.6 0.6 8.9% Dry Blends & Prepared Dry Mixes 4.0 4.0 15.4% % Infant Formulas 0.2 0.2 0.4% % All Others 0.4 0.4 1.7% % Total 25.8 25.8 10% 6.8 6.8 10% 1 Volume figures in millions of pounds. 2 Revised in accordance with USDA figures. GRAND TOTAL: 32.6

UTILIZATION OF LACTOSE IN HUMAN FOODS Comparison of 2009 & 2008 End-Uses 1 2009 Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Total Percent Total Percent Confectionery Industry 196.3 44.8% 24.4 49.3% Infant Formulas 181.4 41.4% % Prepared Dry Mixes 10.5 2.4% 2.5 5.1% Chemicals 8.8 2.0% % Baking Industry 8.3 1.9% 1.1 2.2% Nutraceuticals, Pharmaceuticals, Special Dietary Use 5.3 1.2% % Dairy Industry 2.6 0.6% 18.5 37.5% All Others 24.9 5.7% 2.9 5.9% Total 438.1 10% 49.4 10% GRAND TOTAL: 487.5 2008 2 Direct Sales (Manufacturers) Indirect Sales (Resellers) Market Category Total Percent Total Percent Infant Formulas 266.8 56.5% % Confectionery Industry 109.6 23.2% 17.7 57.7% Chemicals 33.5 7.1% % Dairy Industry 22.7 4.8% 9.1 29.5% Nutraceuticals, Pharmaceuticals, Special Dietary Use 17.9 3.8% % Prepared Dry Mixes 17.9 3.8% 2.4 7.7% Baking Industry 1.9 0.4% 1.5 5.1% All Others 1.9 0.4% % Total 472.2 10% 30.7 10% 1 Volume figures in millions of pounds. 2 Revised in accordance with USDA figures. GRAND TOTAL: 502.9

2009 Utilization of Lactose in Human Foods (Total - 487.5 million lbs.) Dairy Industry 4.3% All Other Uses 13.2% Infant Formulas 37.2% Confectionery Industry 45.3%

D A I R Y P R O D U C T S U T I L I Z A T I O N A N D P R O D U C T I O N T R E N D S 2 0 0 9 DRY MILK PRODUCTION W W W. A D P I. O R G

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.) 1980 1,160,690 1,065 (1) 686 3.0 81 1,314,270 1,014 (2) 493 2.1 82 1,400,455 1,010 (3) 492 2.1 83 1,499,902 1,378 (4) 524 2.2 84 1,160,670 1,321 (5) 596 2.5 1985 1,390,033 1,630 (6) 540 2.3 86 1,284,143 1,610 (7) 589 2.4 87 1,056,797 1,571 (8) 603 2.5 88 979,722 1,106 (9) 633 2.6 89 874,667 882 (10) 526 2.1 1990 879,212 767 (11) 723 2.9 91 877,525 826 (12) 656 2.6 92 872,123 1,008 (13) 719 2.8 93 954,485 946 (12) 634 2.4 94 1,215,600 1,191 (14) 914 3.5 1995 1,232,994 1,280 (12) 910 3.4 96 1,061,771 1,081 (14) 1,006 3.7 97 1,217,562 1,171 (15) 908 3.3 98 1,135,383 1,120 (16) 885 3.2 99 1,378,190 1,275 (17) 787 2.8 2000 1,451,751 1,073 (18) 742 2.6 01 1,413,777 1,156 (19) 927 3.3 02 1,595,939 1,362 (20) 886 3.1 03 1,685,482 1,758 (21) 982 3.4 04 1,412,381 1,883 (22) 1,258 4.3 2005 1,210,313 1,872 (11) 1,251 4.2 06 1,224,072 1,595 (11) 952 3.2 07 1,298,480 1,443 (23) 860 1 2.9 08 1,519,173 1 1,810 (23) 932 2 3.1 09 1,509,111 2 1 Revised. 2 Preliminary. (1) INCLUDES 81 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (13) INCLUDES 11 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (2) INCLUDES 50 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (14) INCLUDES 5 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (3) INCLUDES 58 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (15) INCLUDES 3 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (4) INCLUDES 77 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (16) INCLUDES 2 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (5) INCLUDES 92 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (17) INCLUDES 4 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (6) INCLUDES 96 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (18) INCLUDES 13 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (7) INCLUDES 95 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (19) INCLUDES 12 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (8) INCLUDES 85 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (20) INCLUDES 193 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (9) INCLUDES 38 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (21) INCLUDES 463 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (10) INCLUDES 19 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (22) INCLUDES 111 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (11) INCLUDES 7 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (23) INCLUDES 9 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED. (12) INCLUDES 6 MILLION POUNDS SOLD DOMESTICALLY FOR ANIMAL FEED.

TOTAL PRODUCTION AND COMMERCIAL SALES OF NONFAT DRY MILK (MILLIONS OF POUNDS) Year Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Total PRODUCTION 2009 158.3 125.9 137.3 141.4 150.4 146.1 133.2 107.0 87.8 92.8 102.2 126.7 1,509.1 2008 113.0 121.1 137.0 134.9 131.6 136.0 134.9 115.2 85.5 121.1 133.7 155.2 1,519.2 2007 108.0 96.8 112.9 123.0 115.4 118.2 122.2 103.0 89.8 100.2 10 108.9 1,298.4 SALES 2009 117.9 102.3 118.6 125.9 123.3 118.8 148.4 139.6 106.7 124.3 77.3 11 1,413.1 2008 110.6 134.0 130.2 153.5 143.5 129.8 118.1 98.2 95.6 76.3 79.6 102.9 1,372.3 2007 109.8 102.1 110.2 104.3 115.6 106.4 99.6 86.1 113.4 93.5 88.1 82.3 1,211.4 Source: USDA/NASS 180 PRODUCTION 160 140 120 100 80 60 40 20 0 180 160 140 120 100 80 60 40 20 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC SALES JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2009 2008 2007

MONTHLY PRODUCTION 2009 1 (thousands of pounds) Month Nonfat Dry Milk Skim Milk Powder Dry Whole Milk Dry Buttermilk Dry Skim Milk January 158,286 17,663 4,084 7,494 754 February 125,902 22,693 3,381 6,663 776 March 137,301 24,432 4,092 5,771 928 April 141,397 24,645 3,002 5,340 1,290 May 150,452 26,697 5,587 5,526 861 June 146,065 16,796 4,497 6,224 1,033 July 133,175 14,023 5,073 5,739 834 August 107,049 10,677 6,064 5,099 724 September 87,808 12,585 4,589 5,313 500 October 92,800 10,174 5,583 6,005 505 November 102,156 18,924 6,529 6,622 449 December 126,720 22,601 7,079 8,718 575 TOTAL 1,509,111 221,910 59,560 74,514 9,229 1 Preliminary. GRAND TOTAL: 1,874,324 MONTHLY PRODUCTION 2008 1 (thousands of pounds) Month Nonfat Dry Milk Skim Milk Powder Dry Whole Milk Dry Buttermilk Dry Skim Milk January 112,970 45,614 2,933 7,035 601 February 121,107 33,804 2,498 5,584 734 March 136,993 34,428 5,290 5,795 756 April 134,861 36,137 4,260 6,453 791 May 131,607 45,511 4,947 6,794 607 June 135,979 33,873 4,954 5,248 646 July 134,875 27,120 5,050 5,429 727 August 115,205 26,649 3,675 5,627 1,000 September 85,541 38,868 4,535 5,404 737 October 121,071 17,556 4,941 6,323 541 November 133,702 16,477 3,739 6,528 515 December 155,262 17,793 3,315 6,274 628 TOTAL 1,519,173 373,830 50,137 72,494 8,283 GRAND TOTAL: 2,023,917 1 Revised.

Four Year Comparison of Dry Milks Production (1,000 lbs.) 2,100,000 2,000,000 1,900,000 1,800,000 1,700,000 1,600,000 1,500,000 1,400,000 1,300,000 1,200,000 1,100,000 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Nonfat Dry Milk Skim Milk Powder Dry Whole Milk Dry Buttermilk Dry Skim Milk, Animal Feed Total 2009 2008 2007 2006

Nonfat Dry Milk Manufactured In U.S. The Compounded Annual Growth Rate for Nonfat Dry Milk manufactured in the U.S. is -0.74% 2009 2008 2007 2006 2005 2004 2003 0 300,000 600,000 900,000 1,200,000 1,500,000 1,800,000 Thousands of Pounds

PRODUCTION BY STATES 2009 (thousands of pounds) State Nonfat Dry Milk Skim Milk Powder Dry Whole Milk Dry Buttermilk Dry Skim Milk California 832,299 1 1 34,503 1 All Others 676,812 221,910 59,560 40,011 9,229 TOTAL 1,509,111 221,910 59,560 74,514 9,229 GRAND TOTAL: 1,874,324 PRODUCTION BY STATES 2008 (thousands of pounds) State Nonfat Dry Milk Skim Milk Powder Dry Whole Milk Dry Buttermilk Dry Skim Milk California 819,182 1 1 35,166 2,787 All Others 699,991 373,830 50,137 37,328 5,496 TOTAL 1,519,173 373,830 50,137 72,494 8,283 GRAND TOTAL: 2,023,917 1 Production figure is not shown when less than 3 plants report to UDSA otherwise individual plant operations could be disclosed. This production is included in the totals under All Others".

D A I R Y P R O D U C T S U T I L I Z A T I O N A N D P R O D U C T I O N T R E N D S 2 0 0 9 WHEY & LACTOSE PRODUCTION W W W. A D P I. O R G

ESTIMATED U.S. FLUID WHEY PRODUCTION 1 2009 AND 2008 (billions of pounds) Total Production Sweet-Type Whey Acid-Type Whey 2009 2 2008 3 2009 2008 2009 2008 90.5 87.0 85.8 82.3 4.7 4.7 95.4 93.5 91.0 89.2 4.4 4.3 1 Estimate based upon USDA reported cheese production. 2 Equivalent to 5.7 billion lbs. whey solids (5.4 billion sweet-type and 0.3 billion acid-type) 3 Equivalent to 5.6 billion lbs. whey solids (5.3 billion sweet-type and 0.3 billion acid-type)

ESTIMATED U.S. FLUID WHEY & WHEY SOLIDS PRODUCTION (BY TYPE) AND RESULTING QUANTITY OF WHEY SOLIDS FURTHER PROCESSED 1990 1992 1994 1998 2000 2002 2004 2006 2007 2008 1 2009 2 Sweet-type Whey Production Cheese Production 3 6,488 6,735 7,217 7,492 8,258 8,547 8,873 9,525 9,777 9,913 10,109 Calculated Fluid Whey 4 58,392 60,615 64,953 67,428 74,322 76,923 79,857 85,725 87,993 89,217 90,981 Calculated Whey Solids 5 3,503 3,637 3,897 4,046 4,459 4,615 4,791 5,144 5,280 5,353 5,459 Acid-type Whey Production Cottage Cheese Production 3 787 731 690 728 735 748 779 778 774 714 730 Calculated Fluid Whey 4 4,722 4,386 4,140 4,368 4,410 4,488 4,674 4,668 4,644 4,284 4,380 Calculated Whey Solids 5 283 263 248 262 265 269 280 280 279 257 263 Total Whey Production (fluid basis): 63,114 65,001 69,093 71,796 78,732 81,411 84,531 90,393 92,637 93,501 95,361 Total Whey Production (solids basis): 3,786 3,900 4,145 4,308 4,724 4,884 5,071 5,424 5,559 5,610 5,722 Whey Solids Further Processed (millions of pounds) A - Concentrated Whey Solids 6 21 43 62 61 58 54 46 51 56 52 45 B - Dry Whey - Human Food 1,054 1,067 1,044 1,095 1,105 1,041 949 1,064 1,073 1,024 951 - Animal Feed 183 145 72 84 83 74 86 46 61 58 51 C - Modified Dry Whey Products - Reduced Lactose & Minerals Whey 119 96 101 105 114 125 85 92 98 89 84 - Whey Protein Concentrate 178 182 292 288 334 313 356 428 394 443 415 D - Whey Solids in Wet Blends 119 100 67 37 36 38 - - - - - E - Whey Solids Utilized for Lactose 7 395 405 638 750 784 901 1,065 1,182 1,209 1,192 1,156 Total Whey Solids Further Processed (A+B+C+D+E): 2,069 2,038 2,276 2,420 2,514 2,546 2,587 2,863 2,891 2,858 2,702 Total Whey Solids Further Processed as % of Total Whey Production (solids basis): 54.6% 52.2% 54.9% 56.2% 53.2% 52.1% 51.0% 52.8% 52.0% 50.9% 47.2% 1 Revised. 2 Preliminary. 3 USDA/NASS. 4 Whey Production: approximately 9 lb/1 lb cheese produced (except Cottage). approximately 6 lb/1lb Cottage Cheese produced. 5 Average total solids content of whey: 6.0% 1990 thru 2009. 6 Average total solids content of concentrated whey: 50% 1990 thru 2009. 7 Approximately 1.6 lb whey solids utilized/1 lb lactose produced.

MONTHLY PRODUCTION OF WHEY & WHEY PRODUCTS, 2009 1 (figures in thousands of pounds) Reduced Concentrated Dry Lactose & Whey Protein Whey Protein Whey Whey Minerals Whey Concentrate Isolate Lactose January 8,267 79,395 7,354 35,177 3,824 58,839 February 7,177 74,668 6,123 32,340 3,537 51,653 March 7,482 82,785 7,606 35,259 4,588 59,717 April 8,383 83,218 6,129 32,971 3,861 58,153 May 7,822 87,125 7,440 34,705 3,957 59,639 June 7,466 92,639 7,125 34,572 4,657 60,429 July 7,603 93,640 7,122 35,221 4,492 61,168 August 7,202 82,555 6,639 35,284 4,694 62,065 September 7,259 79,006 6,582 34,810 4,725 60,066 October 7,635 81,709 7,315 35,830 4,682 63,926 November 6,973 79,361 7,139 34,061 4,470 61,927 December 7,540 85,059 7,028 34,785 4,391 64,977 Total 90,809 1,001,160 83,602 415,015 51,878 722,559 1 Preliminary. GRAND TOTAL: 2,365,023

MONTHLY PRODUCTION OF WHEY & WHEY PRODUCTS, 2008 1 (figures in thousands of pounds) Reduced Concentrated Dry Lactose & Whey Protein Whey Protein Whey Whey Minerals Whey Concentrate Isolate Lactose January 9,569 88,832 7,886 36,042 3,229 62,275 February 9,274 89,200 7,251 34,413 2,881 60,504 March 9,230 89,261 8,373 38,048 3,125 64,289 April 8,769 88,652 7,533 38,199 3,176 63,817 May 8,861 99,025 7,605 38,806 3,364 65,588 June 7,945 95,045 7,865 36,294 3,541 63,383 July 9,109 91,512 7,319 38,545 3,289 65,229 August 8,529 89,253 6,706 36,573 4,242 63,488 September 8,635 85,891 6,955 34,830 4,306 58,834 October 8,596 87,708 7,417 37,619 4,490 60,005 November 7,334 86,416 6,350 35,541 4,280 57,454 December 8,043 91,115 7,490 37,799 4,046 60,429 Total 103,894 1,081,910 88,750 442,709 43,969 745,295 1 Preliminary. GRAND TOTAL: 2,506,527

PRODUCTION OF WHEY & WHEY PRODUCTS, 2006-2009 (figures in thousands of pounds) Product 2006 2007 2008 1 2009 2 Concentrated Whey Solids 3 Dry Whey Human Food Animal Feed Total 4 101,267 111,327 103,894 90,809 1,063,551 46,065 1,072,553 61,308 1,024,252 57,658 950,654 50,506 Total 1,109,616 1,133,861 1,081,910 1,001,160 Reduced Lactose & Minerals Whey 5 Human Food Animal Feed 44,980 46,616 45,063 52,874 36,962 51,788 31,295 52,307 Total 91,596 97,937 88,750 83,602 Whey Protein Concentrate Human Food Animal Feed 378,615 49,106 357,376 36,212 404,352 38,357 375,336 39,679 Total 427,721 393,588 442,709 415,015 Whey Protein Concentrate 25.0-49.9% 4 5-89.9% 4 297,465 130,256 258,054 135,534 296,116 146,593 Total 427,721 Whey Protein Isolate 260,604 154,411 393,588 442,709 415,015 Total 4 30,673 39,340 43,969 51,878 Lactose Total 4 738,656 755,525 745,295 722,559 GRAND TOTAL: 2,499,529 2,531,578 2,506,527 2,365,023 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.

Four Year Comparison of U.S. Whey Products Production (1,000 pounds) 2,600,000 2,500,000 2,400,000 2,300,000 2,200,000 2,100,000 2,000,000 1,900,000 1,800,000 1,700,000 1,600,000 1,500,000 1,400,000 1,300,000 1,200,000 1,100,000 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Concentrated Whey Solids Dry Whey Reduced Lactose/Reduced Minerals Whey Whey Protein Concentrate Whey Protein Isolate Lactose Total 2009 2008 2007 2006

Dry Whey Manufactured In U.S. 2009 2008 2007 2006 2005 2004 2003 The Compounded Annual Growth Rate for Dry Whey manufactured in the U.S. is -1.14% 0 300,000 600,000 900,000 1,200,000 Thousands of Pounds

Whey Protein Concentrate Manufactured in the U.S. The Compounded Annual Growth Rate for Whey Protein Concentrate manufactured in the U.S. is 2.14% 2009 2008 2007 2006 2005 2004 2003 0 100,000 200,000 300,000 400,000 500,000 Thousands of Pounds

Lactose Manufactured in the U.S. 2009 The Compounded Annual Growth Rate for Lactose manufactured in the U.S. is 2.35% 2008 2007 2006 2005 2004 2003 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 Thousands of Pounds

U.S. DRY WHEY PRODUCTION, 1970-2009 (figures in thousands of pounds) Year Production 1970 621,031 1971 679,447 1972 762,020 1973 772,440 1974 851,351 1975 595,590 1976 661,761 1977 627,803 1978 711,490 1979 732,941 1980 689,718 1981 778,720 1982 790,502 1983 892,164 1984 897,946 1985 986,829 1986 1,031,033 1987 1,097,349 1988 1,136,987 1989 1,069,470 1990 1,143,259 1991 1,167,394 1992 1,237,283 1993 1,196,378 1994 1,163,889 1995 1,147,265 1996 1,116,514 1997 1,136,824 1998 1,178,261 1999 1,147,388 2000 1,187,903 2001 1,045,655 2002 1,115,321 2003 1,085,165 2004 1,034,898 2005 1,040,692 2006 1,109,616 2007 1,133,861 2008 1 1,081,910 2009 2 1,001,160 1 Revised. 2 Preliminary

PRODUCTION OF DRY WHEY & LACTOSE, BY STATE - 2009 & 2008 (figures in thousands of pounds) New York 129,997 2009 Dry Whey Lactose 1 Human Animal Total Human & Animal 2 129,997 2 Wisconsin 294,339 2 294,339 2 All Others 526,318 50,506 576,824 722,559 TOTAL U.S. 950,654 50,506 1,001,160 722,559 New York 130,667 2008 Dry Whey Lactose 1 Human Animal Total Human & Animal 2 130,667 2 Wisconsin 304,753 2 304,753 2 All Others 588,832 57,658 646,490 745,295 TOTAL U.S. 1,024,252 57,658 1,081,910 745,295 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 otherwise individual plant operations could be disclosed. This production is included in the totals under All Others".

D A I R Y P R O D U C T S U T I L I Z A T I O N A N D P R O D U C T I O N T R E N D S 2 0 0 9 CHEESE PRODUCTION W W W. A D P I. O R G

MONTHLY PRODUCTION OF CHEESE, 2009 1 (figures in thousands of pounds) Cheddar Other American Swiss Brick & Muenster Hispanic Mozzarella Other Italian Other Cheese January 278,181 79,019 27,316 9,401 16,460 267,299 78,320 70,897 February 244,440 78,930 23,640 9,642 16,509 246,429 70,320 78,065 March 279,296 85,063 26,298 11,092 18,228 280,012 79,374 91,154 April 272,691 82,090 28,890 9,362 17,696 270,604 75,443 90,817 May 287,422 80,599 27,487 9,722 16,057 271,395 74,510 88,908 June 276,646 80,223 27,349 10,471 16,528 268,901 73,017 84,965 July 269,533 85,162 27,237 11,863 17,339 273,782 72,348 85,488 August 264,743 82,345 26,094 11,143 18,009 272,632 73,167 102,551 September 259,004 83,917 25,709 10,402 17,931 270,262 75,825 99,440 October 263,443 85,960 26,847 11,380 17,249 278,106 79,748 100,052 November 248,976 82,617 27,133 10,609 16,507 279,105 79,881 94,704 December 263,062 89,137 28,336 9,731 17,961 288,779 81,021 85,845 Total 3,207,437 995,062 322,336 124,818 206,474 3,267,306 912,974 1,072,886 1 Preliminary. GRAND TOTAL: 10,109,293

MONTHLY PRODUCTION OF CHEESE, 2008 1 (figures in thousands of pounds) Cheddar Other American Swiss Brick & Muenster Hispanic Mozzarella Other Italian Other Cheese January 266,987 72,113 25,305 8,418 16,550 280,964 71,656 77,448 February 254,628 68,300 23,857 7,889 15,347 265,926 70,322 83,203 March 270,531 72,648 23,953 9,408 15,840 286,399 72,779 89,110 April 272,983 69,666 23,595 8,885 16,724 275,096 71,493 80,654 May 277,054 77,817 25,945 9,757 15,466 271,440 74,263 83,913 June 264,106 75,778 24,686 11,969 15,470 260,710 73,204 88,851 July 269,010 76,659 24,896 12,077 16,138 259,981 74,119 88,265 August 261,073 82,587 24,683 12,273 16,730 258,523 74,540 96,059 September 242,569 82,454 22,792 11,810 16,941 259,743 76,455 95,722 October 259,656 87,774 24,952 10,670 17,147 264,723 80,495 104,232 November 260,893 80,750 23,830 11,258 15,013 260,560 76,959 97,615 December 286,964 75,565 25,474 9,714 16,902 278,700 81,781 85,996 Total 3,186,454 922,111 293,968 124,128 194,268 3,222,765 898,066 1,071,068 1 Revised. GRAND TOTAL: 9,912,828

Four Year Comparison of Cheese Production (1,000 lbs.) 3,450,000 3,300,000 3,150,000 3,000,000 2009 2,850,000 2,700,000 2,550,000 2,400,000 2,250,000 2,100,000 2008 1,950,000 1,800,000 1,650,000 1,500,000 1,350,000 1,200,000 2007 1,050,000 900,000 750,000 600,000 450,000 300,000 2006 150,000 0 Cheddar Other American Swiss Brick & Muenster Hispanic Mozzarella Other Italian

PRODUCTION OF CHEESE, BY STATE - 2009 & 2008 (figures in thousands of pounds) 2009 Cheddar Other American Swiss Mozzarella Other Italian Total Cheese California 363,498 279,469 1 1,101,819 115,475 2,057,337 Idaho 562,629 111,655 Iowa 111,803 60,935 1 1 1 1 1 1 831,645 219,913 Minnesota 515,142 1 1 1 1 649,490 New York 1 1,013 1 199,133 181,540 728,460 Ohio 8,480 3,094 144,413 1 1 199,119 Pennsylvania 1 1 10,747 1 1 402,709 Wisconsin 654,882 193,406 1 863,251 367,952 2,629,563 All Others 991,003 345,490 167,176 1,103,103 248,007 2,391,057 TOTAL U.S. 3,207,437 995,062 322,336 3,267,306 912,974 10,109,293 2008 Cheddar Other American Swiss Mozzarella Other Italian Total Cheese California 375,116 292,370 1 1,105,592 118,430 2,113,236 Idaho 546,044 128,347 Iowa 101,018 35,723 1 1 1 1 1 1 829,406 167,450 Minnesota 512,236 1 1 1 1 641,748 New York 1 1,045 1 200,351 184,593 715,923 Ohio 11,619 2,699 132,039 1 1 182,147 Pennsylvania 1 1 8,970 1 1 402,058 Wisconsin 645,336 177,173 1 825,910 346,502 2,524,125 All Others 995,085 284,754 152,959 1,090,912 248,541 2,336,735 TOTAL U.S. 3,186,454 922,111 293,968 3,222,765 898,066 9,912,828 1 Production figure is not shown when less than 3 plants report to UDSA otherwise individual plant operations could be disclosed. This production is included in the totals under All Others".

D A I R Y P R O D U C T S U T I L I Z A T I O N A N D P R O D U C T I O N T R E N D S 2 0 0 9 MISCELLANEOUS PRODUCTION DATA W W W. A D P I. O R G

PRODUCTION OF DOMESTIC DRY MILK AND WHEY PRODUCTS AND IMPORTS OF CASEIN, 1976-2009 (figures in millions of pounds) Year Dry Milk Products Whey Products Nonfat Dry Milk 1 Dry Whole Milk Dry Buttermilk Dried Skim Milk Dry Whey Concentrated Whey Modified Whey Lactose Whey in Wet Blends Total Dry Milk & Whey Casein Imports Casein percent of total 1976 926.2 78.1 46.3 5.9 661.8 139.0 165.1 137.4 73.8 2,233.6 112.1 5.0 1977 1,106.6 69.4 53.2 7.9 627.8 145.5 179.0 108.8 68.3 2,366.5 144.2 6.1 1978 920.4 74.6 47.6 6.5 711.5 144.4 205.0 114.5 96.1 2,320.6 137.1 5.9 1979 908.7 85.3 44.7 6.1 732.9 99.8 176.8 109.2 137.8 2,301.3 150.8 6.6 1980 1,160.7 82.7 43.9 6.9 689.7 85.7 192.8 140.2 144.1 2,546.7 151.2 5.9 1981 1,314.3 92.7 43.8 7.8 778.7 113.0 173.5 162.1 160.4 2,846.3 127.8 4.5 1982 1,400.5 102.2 38.6 9.7 790.5 141.7 234.2 144.4 136.3 2,998.1 176.8 5.9 1983 1,499.9 111.2 46.5 10.3 892.2 136.5 202.3 130.3 124.0 3,153.2 159.5 5.1 1984 1,160.8 119.6 43.5 7.7 897.9 13 184.0 123.8 135.7 2,803.0 192.3 6.9 1985 1,39 118.9 51.5 8.3 986.8 126.7 201.0 123.2 136.3 3,142.7 231.6 7.4 1986 1,284.1 122.4 65.7 9.7 1,031.0 117.9 169.2 135.2 116.4 3,051.6 228.9 7.5 1987 1,056.8 145.9 55.6 19.8 1,097.3 73.4 204.3 151.5 134.2 2,938.8 238.4 8.1 1988 979.7 172.3 58.7 18.7 1,137.0 62.1 257.6 161.3 128.3 2,975.7 162.4 5.5 1989 874.7 175.8 60.5 18.7 1,069.5 59.9 257.2 170.9 108.9 2,796.1 180.4 6.5 1990 879.2 175.1 55.9 23.2 1,143.3 58.7 262.9 192.6 107.1 2,898.0 187.7 6.5 1991 877.5 106.8 59.9 7.2 1,167.4 33.4 292.8 196.9 103.0 2,844.9 188.7 6.6 1992 872.1 168.3 61.2 9.9 1,237.3 41.4 297.2 246.9 118.5 3,052.8 201.4 6.6 1993 954.5 153.8 51.0 9.8 1,196.4 49.7 286.6 236.4 113.4 3,051.6 170.6 5.6 1994 1,215.6 166.8 52.3 11.2 1,163.9 85.4 277.6 253.3 99.8 3,325.9 196.7 5.9 1995 1,233.0 171.3 54.8 9.5 1,147.3 152.3 402.9 365.3 78.3 3,614.7 145.1 4.0 1996 1,061.7 134.3 48.7 6.2 1,116.5 171.6 351.4 398.7 67.0 3,356.1 152.4 4.5 1997 1,217.6 122.1 49.3 5.3 1,136.8 165.5 353.6 434.7 63.3 3,548.2 143.3 4.0 1998 1,135.4 142.5 50.1 4.3 1,178.3 121.9 411.3 467.6 37.3 3,548.7 179.2 5.0 1999 1,378.2 118.0 53.8 4.8 1,147.4 122.4 478.8 471.4 36.1 3,810.9 167.2 4.4 2000 1,451.7 111.4 56.2 5.6 1,187.9 115.2 448.1 490.1 36.2 3,902.4 189.9 4.9 2001 1,413.8 41.2 51.7 5.5 1,045.7 81.5 465.5 519.2 39.9 3,664.0 151.0 4.1 2002 1,595.9 47.4 54.9 7.6 1,115.3 108.3 437.9 563.1 37.7 3,968.1 144.3 3.6 2003 1,589.0 38.6 52.2 5.6 1,085.2 114.7 442.1 614.0 ---- 3,941.4 181.9 4.6 2004 1,412.4 41.6 55.0 5.2 1,034.9 91.2 440.7 665.6 ---- 3,746.6 172.7 4.6 2005 1,533.1 32.4 66.5 5.6 1,040.7 79.2 482.3 714.0 ---- 3,953.8 153.9 3.9 2006 1,513.9 30.5 66.9 5.9 1,109.6 101.3 519.3 738.7 ---- 4,086.1 178.3 4.4 2007 1,499.1 31.7 81.4 4.9 1,133.9 111.3 491.5 755.5 ---- 4,109.3 197.6 4.8 2008 1,893.0 50.1 72.5 8.3 1,081.9 103.9 531.5 745.3 ---- 4,486.5 261.8 5.8 2009 1,731.0 59.6 74.5 9.2 1,001.2 90.8 498.6 722.6 ---- 4,187.5 159.8 3.8 1 Includes Skim Milk Powders.

Number of Milk Cows 1 Average Milk Per Cow 2 Milk Production 2 Year (Thousands) (Pounds) (Billion Pounds) 1993 9,581 15,719 150.6 1994 9,494 16,179 153.6 1995 9,466 16,406 155.3 1996 9,372 16,432 154.0 1997 9,252 16,872 156.1 1998 9,151 17,189 157.3 1999 9,153 17,765 162.6 2000 9,199 18,198 167.4 2001 9,103 18,159 165.3 2002 9,139 18,608 170.1 2003 9,083 18,760 170.4 2004 9,012 18,967 170.9 2005 9,043 19,565 176.9 2006 9,137 19,895 181.8 2007 9,189 20,204 185.6 2008 9,315 20,395 19 2009 3 9,201 20,576 189.3 1 Includes dry cows, excludes heifers not yet fresh. 2 Excludes milk sucked by calves. 3 Preliminary. Number of Milk Cows, Production per Cow, and Milk Production, 1993-2009 Source: USDA, National Agricultural Statistics Service Total U.S. Milk Prodcution, 1993-2009 190 180 170 Billion Pounds 160 150 140 130 120 110 100 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Total Milk Production in the Ten Largest Dairy States 1, 2002-2009 (Million Lbs.) State 2009 2 2008 2007 2006 2005 2004 2003 2002 California 39,512 41,203 40,683 38,830 37,564 36,465 35,437 35,065 Wisconsin 25,239 24,472 24,080 23,398 22,866 22,085 22,266 22,074 New York 12,424 12,432 12,103 12,045 12,078 11,650 11,952 12,218 Idaho 12,150 12,315 11,549 10,905 10,161 9,093 8,774 8,155 Pennsylvania 10,551 10,575 10,682 10,742 10,503 10,062 10,338 10,775 Minnesota 9,019 8,782 8,656 8,370 8,195 8,102 8,258 8,458 Texas 8,840 8,416 7,384 7,145 6,442 6,009 5,630 5,300 Michigan 7,968 7,763 7,625 7,115 6,750 6,330 6,375 6,120 New Mexico 7,904 7,865 7,290 7,630 6,951 6,737 6,666 6,316 Washington 5,561 5,696 5,531 5,464 5,608 5,416 5,581 5,620 Percentage of Top Ten Dairy States Top 10 139,168 139,519 135,583 131,644 127,118 121,949 121,277 120,101 % Total 3 74% 73% 73% 72% 72% 71% 71% 71% Total U.S. 189,320 189,982 185,654 181,782 176,929 170,934 170,394 170,063 1 Ranked by 2009 Milk Production. 2 Preliminary. 3 Milk Production and percent of total milk are for the top 10 states in the year indicated. Source: USDA, National Agricultural Statistics Service

Organic Food Category Share, 2007-2009 2007 Sales 2008 Sales 2009 Sales % Growth Category ($ Mil) ($ Mil) ($ Mil) 2008 Dairy 3,201 3,609 3,573-1.0% Fruits & Vegetables 7,999 8,503 9,471 11.4% Breads & Grains 2,001 2,708 2,825 4.3% Meat, Poultry & Fish 400 448 456 1.8% Beverages 2,451 3,158 3,266 3.4% Snack Foods 1,000 1,110 1,138 2.5% Packaged/Prepared Foods 2,959 3,580 3,554-0.7% Sauces/Condiments 400 491 521 6.1% Total 20,411 23,607 24,804 5.1% ORGANIC SALES 2009-2007 $10,000 $9,000 $8,000 $7,000 ($ Million) $6,000 $5,000 $4,000 $3,000 2007 2008 2009 $2,000 $1,000 $0 Dairy Fruits & Vegetables Breads & Grains Meat, Poultry & Fish Beverages Snack Foods Packaged/Prepared Foods Sauces/Condiments Source: The Organic Trade Association

D A I R Y P R O D U C T S U T I L I Z A T I O N A N D P R O D U C T I O N T R E N D S 2 0 0 9 U.S. EXPORTS W W W. A D P I. O R G

U.S. Exports of Dairy Products by Country (Value) $2,324 million Source: USDEC

U.S. Exports of Dairy Products 2009 vs. 2008 Volume (000 MT) *(000 liters) Source: USDEC 22.4 263.8 108.5 25.5 374.2 51.1 219.2 $2,324 mil.

U.S. EXPORTS OF ALL DRY WHEY 1 (Metric Tons) % 2009 2004 2005 2006 2007 2008 2009 of 2008 North America 57,444 65,896 91,412 167,354 99,020 108,639 110% Caribbean 2,522 3,256 3,399 4,701 4,511 3,803 84% Central America 4,773 6,053 6,460 7,930 6,836 8,781 128% South America 7,336 13,745 14,604 17,263 16,587 10,817 65% Europe 3,157 3,440 15,460 19,304 11,453 6,139 54% Middle East/N.A. 1,437 2,642 6,442 8,383 16,562 9,951 60% Far East 131,959 180,287 205,072 203,532 198,245 220,610 111% South Asia 766 191 1,132 5,267 1,754 1,971 112% Oceania 244 433 2,742 3,086 5,556 2,658 48% Sub-Saharan Africa 133 230 973 1,961 1,913 872 46% World 209,771 276,173 347,696 438,781 362,437 374,241 103% 1 Category includes: 0404101 Dry Whey, 04041005 Whey Protein Concentrate, 040410085 Modified Whey NESOI, 04049 Nat. Mk. Pro. NESOI, and 35022 Milk Albumin 250,000 200,000 150,000 100,000 50,000 0 North America Caribbean Central America South America Europe Middle East/N.A. Far East South Asia Oceania Sub-Saharan Africa (Metric Tons) 2004 2005 2006 2007 2008 2009 Source: U.S. Dairy Export Council

U.S. Exports of All Dry Whey by Type 2009 374,242 MT Source: USDEC

U.S. EXPORTS OF DRY SWEET WHEY 1 (Metric Tons) % 2009 2004 2005 2006 2007 2008 2009 of 2008 North America 37,828 31,539 33,504 73,383 32,947 40,000 121% Caribbean 1,427 2,501 3,159 3,755 3,562 2,951 83% Central America 3,852 4,431 4,953 6,169 5,093 7,162 141% South America 3,589 5,567 7,894 6,488 7,784 5,159 66% Europe 740 902 5,473 8,496 7,227 1,845 26% Middle East/N.A. 1,347 1,364 3,393 2,735 4,113 1,823 44% Far East 111,974 144,024 164,910 155,398 135,688 144,915 107% South Asia 705 165 1,067 4,555 958 1,288 134% Oceania 0 290 2,241 2,066 2,613 958 37% Sub-Saharan Africa 3 0 269 1,257 1,372 347 25% World 161,465 190,783 226,863 264,302 201,357 206,448 103% 1 Includes 0404101 Dry Whey (sweet whey and whey permeate). 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 North America Caribbean Central America South America Europe Middle East/N.A. (Metric Tons) Far East South Asia Oceania Sub-Saharan Africa 2004 2005 2006 2007 2008 2009 Source: U.S. Dairy Export Council

U.S. Exports of Dry Sweet Whey 2009 vs. 2008 Volume (000 MT) 206.4 56.8 46.5 22.8 21.8 18.2 13.3 Source: USDEC

U.S. EXPORTS OF WHEY PROTEIN CONCENTRATE 1 (Metric Tons) % 2009 2004 2005 2006 2007 2008 2009 of 2008 North America 12,807 19,781 43,213 68,528 46,338 48,417 104% Caribbean 1,033 514 131 660 736 667 91% Central America 726 1,498 1,430 1,614 1,624 1,467 90% South America 3,157 8,109 6,309 9,773 7,565 4,047 53% Europe 1,227 1,947 7,105 9,193 1,639 2,486 152% Middle East/N.A. 80 1,269 2,770 4,271 3,060 923 30% Far East 17,218 34,188 35,142 43,548 56,566 69,136 122% South Asia 48 12 33 526 487 271 56% Oceania 94 40 426 952 2,779 1,458 52% Sub-Saharan Africa 55 166 652 379 198 149 75% World 36,445 67,524 97,211 139,444 120,992 129,021 107% 1 Includes whey protein concentrate (04041005) and modified whey NEC (040410085). 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 North America Caribbean Central America South America Europe Middle East/N.A. (Metric Tons) Far East South Asia Oceania Sub-Saharan Africa 2004 2005 2006 2007 2008 2009 Source: U.S. Dairy Export Council

U.S. Exports of Whey Protein Concentrate* 2009 vs. 2008 (000 MT) 129.0 47.3 37.0 12.0 11.5 6.8 *includes modified whey, NEC Source: USDEC

U.S. Exports of High Value Whey Protein (>80%) 2009 vs. 2008 (000 MT) 15.5 3.9 3.3 1.6 1.5 Source: USDEC

U.S. Exports of Whey Proteins 2009 vs. 2008 (000 MT) 374.2 97.2 70.4 67.9 40.7 30.5 15.5 Source: USDEC

U.S. EXPORTS OF LACTOSE IN SOLID FORM (Metric Tons) % 2009 2004 2005 2006 2007 2008 2009 of 2008 North America 23,944 24,711 37,883 24,504 21,528 25,944 121% Caribbean 247 169 257 194 162 359 222% Central America 110 270 309 247 473 271 57% South America 9,645 13,790 18,550 8,070 12,065 8,799 73% Europe 2,482 5,621 10,300 10,976 15,142 6,318 42% Middle East/N.A. 952 1,847 2,888 2,192 2,832 2,751 97% Far East 108,871 130,806 149,044 117,129 112,845 143,823 127% South Asia 3,570 1,323 4,748 3,335 2,050 7,426 362% Oceania 5,033 4,731 11,394 10,001 10,770 19,019 177% Sub-Saharan Africa 980 1,261 2,637 4,797 7,818 4,469 57% World 155,834 184,529 238,010 181,445 185,685 219,179 118% 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 North America Caribbean Central America South America Europe Middle East/N.A. Far East South Asia Oceania Sub-Saharan Africa (Metric Tons) 2004 2005 2006 2007 2008 2009 Source: U.S. Dairy Export Council

U.S. Exports of Lactose 2009 vs. 2008 Volume (000 MT) 219.2 49.8 46.3 39.3 22.1 19.0 8.8 6.3 Source: USDEC

U.S. EXPORTS OF SKIM MILK POWDER (Metric Tons) % 2009 2004 2005 2006 2007 2008 2009 of 2008 North America 92,605 109,750 69,782 79,018 129,561 118,035 91% Caribbean 26,092 18,324 7,387 2,777 9,273 5,726 62% Central America 17,715 9,966 7,257 2,522 5,856 2,368 40% South America 3,507 1,688 4,843 2,435 11,890 2,810 24% Europe 14,140 6,030 7,593 9,969 10,167 695 7% Middle East/N.A. 21,682 34,476 49,934 41,782 54,658 34,347 63% Far East 90,218 104,276 139,527 120,042 173,881 97,708 56% South Asia 2,178 3,657 1,873 5,817 1,838 1,617 88% Oceania 48 37 524 235 47 93 198% Sub-Saharan Africa 2,371 434 3,643 1,816 5,336 416 8% World 270,556 288,638 292,363 266,413 402,507 263,815 66% 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 North America Caribbean Central America South America Europe Middle East/N.A. (Metric Tons) Far East South Asia Oceania Sub-Saharan Africa 2004 2005 2006 2007 2008 2009 Source: U.S. Dairy Export Council

U.S. Exports of SMP/NDM 2009 vs. 2008 Volume (000 MT) 263.8 115.1 82.8 34.3 Source: USDEC

U.S. EXPORTS OF WHOLE MILK POWDER (Metric Tons) % 2009 2004 2005 2006 2007 2008 2009 of 2008 North America 2,766 3,823 4,687 3,387 9,551 3,717 39% Caribbean 366 31 49 419 5,482 1,246 23% Central America 58 6 33 14 3,542 521 15% South America 335 645 331 1,056 1,280 57 4% Europe 19 6 0 2 0 54 na Middle East 907 464 233 411 2,838 1,677 59% Far East 10,913 7,051 4,941 6,887 5,777 761 13% South Asia 0 0 0 0 40 6 na Oceania 2 1 153 136 164 2 1% Sub-Saharan Africa 19 20 20 45 643 43 7% World 15,385 12,047 10,447 12,357 29,317 8,084 28% 12,000 10,000 8,000 6,000 4,000 2,000 0 North America Caribbean Central America South America Europe Middle East (Metric Tons) Far East South Asia Oceania Sub-Saharan Africa 2004 2005 2006 2007 2008 2009 Source: U.S. Dairy Export Council

U.S. EXPORTS OF FLUID MILK AND CREAM Liters (000) % 2009 2004 2005 2006 2007 2008 2009 of 2008 North America 27,833 22,031 22,545 43,736 43,312 44,386 102% Caribbean 946 504 860 1,812 2,727 3,674 135% Central America 9 0 26 77 32 158 494% South America 110 41 68 78 635 276 43% Europe 0 0 6 8 26 327 1258% Middle East 2 0 79 0 404 553 137% Far East 483 563 662 455 1,429 1,486 104% South Asia 0 0 38 0 0 4 na Oceania 93 52 27 112 127 193 152% Sub-Saharan Africa 53 0 29 2 26 64 246% World 29,529 23,191 24,340 46,280 48,718 51,121 105% 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 North America Caribbean Central America South America Europe Middle East Liters (000) Far East South Asia Oceania Sub-Saharan Africa 2004 2005 2006 2007 2008 2009 Source: U.S. Dairy Export Council

U.S. Exports of Fluid Milk & Cream 2009 vs. 2008 Volume (000 MT) (000 liters) 51.1 23.0 21.4 Source: USDEC

U.S. EXPORTS OF BUTTER (Metric Tons) % 2009 2004 2005 2006 2007 2008 2009 of 2008 North America 4,594 1,378 1,631 4,969 6,320 2,219 35% Caribbean 369 384 417 687 1,352 712 53% Central America 100 74 1,108 393 607 297 49% South America 25 34 18 98 79 51 65% Europe 22 16 558 14,312 19,238 1,053 5% Middle East/N.A. 905 2,195 3,877 11,155 32,832 15,858 48% Far East 105 316 747 682 17,262 1,129 7% South Asia 0 0 0 6 24 0 0% Oceania 0 4 36 538 1,183 7 1% Sub-Saharan Africa 19 7 4 78 662 1,105 167% World 6,139 4,408 8,396 32,918 79,559 22,431 28% 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 North America Caribbean Central America South America Europe Middle East/N.A. (Metric Tons) Far East South Asia Oceania Sub-Saharan Africa 2004 2005 2006 2007 2008 2009 Source: U.S. Dairy Export Council

U.S. Exports of Butter 2009 vs. 2008 Volume (000 MT) 22.4 15.9 1.1 1.1 0.7 Source: USDEC

U.S. EXPORTS OF CHEESE - ALL TYPES (Metric Tons) % 2009 2004 2005 2006 2007 2008 2009 of 2008 North America 27,488 26,017 32,411 43,003 48,698 50,815 104% Caribbean 3,344 3,779 5,278 6,528 8,258 8,697 105% Central America 2,434 2,240 3,054 3,980 6,724 6,226 93% South America 1,957 2,266 2,313 2,457 2,494 2,686 108% Europe 2,620 2,230 2,444 6,923 6,428 2,501 39% Middle East/N.A. 4,386 2,416 4,553 8,143 19,812 8,830 45% Far East 18,309 18,558 20,671 25,752 34,273 27,318 80% South Asia 9 12 90 7 16 44 275% Oceania 233 158 106 2,393 3,835 650 17% Sub-Saharan Africa 575 83 90 354 665 726 109% World 61,355 57,759 71,010 99,540 131,203 108,493 83% 60,000 50,000 40,000 30,000 20,000 10,000 0 North America Caribbean Central America South America Europe Middle East/N.A. (Metric Tons) Far East South Asia Oceania Sub-Saharan Africa 2004 2005 2006 2007 2008 2009 Source: U.S. Dairy Export Council

U.S. Exports of Cheese 2009 vs. 2008 Volume (000 MT) 108.5 40.1 10.9 10.3 8.8 8.7 7.0 6.2 Source: USDEC

U.S. EXPORTS OF ICE CREAM (Metric Tons) % 2009 2004 2005 2006 2007 2008 2009 of 2008 North America 14,323 16,163 18,575 17,713 17,400 16,496 95% Caribbean 2,593 2,977 2,754 2,438 3,210 4,024 125% Central America 353 264 304 167 173 168 97% South America 447 525 433 235 270 255 94% Europe 1,918 1,872 1,268 2,927 1,419 1,256 89% Middle East/N.A. 322 495 447 501 694 757 109% Far East 3,465 3,390 2,407 1,365 1,637 1,618 99% South Asia 0 0 0 2 24 0 0% Oceania 378 329 224 325 340 619 182% Sub-Saharan Africa 98 106 89 104 164 336 205% World 23,897 26,121 26,501 25,777 25,331 25,529 101% 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 North America Caribbean Central America South America Europe Middle East/N.A. (Metric Tons) Far East South Asia Oceania Sub-Saharan Africa 2004 2005 2006 2007 2008 2009 Source: U.S. Dairy Export Council

U.S. Exports of Ice Cream 2009 vs. 2008 Volume (000 MT) 25.5 13.0 3.1 4.0 Source: USDEC

U.S. EXPORTS OF YOGURT (Metric Tons) % 2009 2004 2005 2006 2007 2008 2009 of 2008 North America 2,486 768 1,134 1,202 1,875 1,891 101% Caribbean 649 1,221 1,527 2,044 2,690 3,529 131% Central America 136 113 133 144 190 171 90% South America 4 32 46 107 74 92 124% Europe 78 1 85 164 233 148 64% Middle East/N.A. 79 73 69 99 99 83 84% Far East 400 975 1,046 1,271 425 670 158% South Asia 0 0 0 0 0 0 na Oceania 149 147 82 70 99 74 75% Sub-Saharan Africa 0 0 0 0 0 3 na World 3,981 3,330 4,122 5,101 5,685 6,661 117% 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 North America Caribbean Central America South America Europe Middle East/N.A. (Metric Tons) Far East South Asia Oceania Sub-Saharan Africa 2004 2005 2006 2007 2008 2009 Source: U.S. Dairy Export Council

U.S. EXPORTS OF ANHYDROUS MILKFAT (Metric Tons) % 2009 2004 2005 2006 2007 2008 2009 of 2008 North America 2,086 2,610 911 1,322 3,764 2,607 69% Caribbean 52 29 21 43 180 210 117% Central America 110 318 193 455 1,401 782 56% South America 0 57 50 6 86 16 19% Europe 2 97 1 4,284 2,382 418 18% Middle East/N.A. 0 34 201 212 347 587 169% Far East 2 179 377 338 800 1,153 144% South Asia 0 0 0 0 0 0 na Oceania 35 2 3 145 325 8 2% Sub-Saharan Africa 0 0 0 2 0 1 na World 2,287 3,326 1,757 6,807 9,285 5,782 62% 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 North America Caribbean Central America South America Europe Middle East/N.A. (Metric Tons) Far East South Asia Oceania Sub-Saharan Africa 2004 2005 2006 2007 2008 2009 Source: U.S. Dairy Export Council

U.S. EXPORTS OF MILK ALBUMIN (WPI) 1 (Metric Tons) % 2009 2004 2005 2006 2007 2008 2009 of 2008 North America 3,874 4,657 4,541 6,880 3,831 5,562 145% Caribbean 9 20 80 38 11 19 173% Central America 132 0 36 92 24 0 0% South America 436 70 312 889 1,053 1,535 146% Europe 1,047 475 2,687 1,446 1,999 1,461 73% Middle East/N.A. 2 8 6 121 213 240 113% Far East 2,697 1,735 3,499 3,952 4,188 5,809 139% South Asia 13 14 33 146 259 380 147% Oceania 86 65 40 61 141 159 113% Sub-Saharan Africa 74 59 47 325 283 339 120% World 8,370 7,103 11,281 13,950 12,002 15,504 129% 1 Category includes: 35022 Milk Albumin. 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 North America Caribbean Central America South America Europe Middle East/N.A. (Metric Tons) Far East South Asia Oceania Sub-Saharan Africa 2004 2005 2006 2007 2008 2009 Source: U.S. Dairy Export Council

D A I R Y P R O D U C T S U T I L I Z A T I O N A N D P R O D U C T I O N T R E N D S 2 0 0 9 CASEIN IMPORTS W W W. A D P I. O R G

CASEIN IMPORTS AS A PERCENTAGE OF DOMESTIC DRY MILK AND WHEY PRODUCTS PRODUCTION, 1976-2009 (figures in millions of pounds) Year Total Dry Milk & Whey Production Casein Imports Casein Percent of Total 1976 2,233.6 112.1 5.0 1977 2,366.5 144.2 6.1 1978 2,320.6 137.1 5.9 1979 2,301.3 150.8 6.6 1980 2,546.7 151.2 5.9 1981 2,846.3 127.8 4.5 1982 2,998.1 176.8 5.9 1983 3,153.2 159.5 5.1 1984 2,803.0 192.3 6.9 1985 3,142.7 231.6 7.4 1986 3,051.6 228.9 7.5 1987 2,938.8 238.4 8.1 1988 2,975.7 162.4 5.5 1989 2,796.1 180.4 6.5 1990 2,898.0 187.7 6.5 1991 2,844.9 188.7 6.6 1992 3,052.8 201.4 6.6 1993 3,051.6 170.6 5.6 1994 3,325.9 196.7 5.9 1995 3,614.7 145.1 4.0 1996 3,356.1 152.4 4.5 1997 3,548.2 143.3 4.0 1998 3,548.7 179.2 5.0 1999 3,810.9 167.2 4.4 2000 3,902.4 189.9 4.9 2001 3,664.0 151.0 4.1 2002 3,968.1 144.3 3.6 2003 3,941.4 181.9 4.6 2004 3,746.6 172.7 4.6 2005 3,953.8 153.9 3.9 2006 4,086.1 178.3 4.4 2007 4,109.3 197.6 4.8 2008 4,486.5 261.8 5.8 2009 4,187.5 159.8 3.8

D A I R Y P R O D U C T S U T I L I Z A T I O N A N D P R O D U C T I O N T R E N D S 2 0 0 9 PRODUCT DEFINITIONS W W W. A D P I. O R G

Milk Product Definitions Nonfat Dry Milk is the product resulting from the removal of fat and water from milk and contains the lactose, milk proteins, and milk minerals in the same relative proportions as in the fresh milk from which it was made. It contains not over 5% by weight of moisture. The fat content is not over 1.5% by weight unless otherwise indicated. Dry Whole Milk is the product resulting from the removal of water from milk and contains not less than 26%, but less than 40% milkfat and not more than 5.0% moisture (as determined by weight of moisture on a milk solids-not-fat basis). Dry Buttermilk is the product resulting from the removal of water from liquid buttermilk derived from the churning of butter. It shall contain not less than 4.5% milkfat and not more than 5% moisture. Dry buttermilk shall have a protein content of not less than 30%. Dry Buttermilk Product is the product resulting from the removal of water from liquid buttermilk derived from the churning of butter. It shall contain not less than 4.5% milkfat and not more than 5% moisture. Dry buttermilk product contains less than 30% protein, the label of which should specify the minimum protein content.

Whey Product Definitions Whey is the liquid substance obtained by separating the coagulum from milk, cream, or skim milk in cheese making. Whey obtained from a procedure in which a significant amount of lactose is converted to lactic acid, or from the curd formation by direct acidification of milk, is known as acid whey. Whey obtained from a procedure in which there is insignificant conversion of lactose to lactic acid is known as sweet whey. Sweet whey has a maximum titratable acidity of not more than 0.16 percent, calculated as lactic acid, and an alkalinity of ash not more than 225 ml of 0.1N Hydrochloric acid per 100 grams. The acidity of whey, sweet or acid, may be adjusted by the addition of safe and suitable ph-adjusting ingredients. Concentrated Whey is the liquid substance obtained by the partial removal of water from whey, while leaving all other constituents in the same relative proportions as in whey. Dry Whey is the substance obtained by the removal of water from whey, while leaving all other constituents in the same relative proportions as in whey. Reduced Lactose Whey is the substance obtained by the removal of lactose from whey. The lactose content of the finished dry product shall not exceed 60 percent. Removal of the lactose is accomplished by physical separation techniques such as precipitation, filtration, or dialysis. As with whey, reduced lactose whey can be used as a fluid, concentrate, or a dry product form. The acidity of reduced lactose whey may be adjusted by the addition of safe and suitable ph-adjusting ingredients. Reduced Minerals Whey is the substance obtained by the removal of a portion of the minerals from whey. The dry product shall not contain more than 7 percent ash. Reduced minerals whey is produced by physical separation techniques such as precipitation, filtration, or dialysis. As with whey, reduced minerals whey can be used as a fluid, concentrate, or dry product form. The acidity of reduced minerals whey may be adjusted by the addition of safe and suitable ph-adjusting ingredients. Whey Protein Concentrate is the substance obtained by the removal of sufficient non-protein constituents from whey so that the finished dry product contains not less than 25% protein. Whey protein concentrate is produced by physical separation techniques such as precipitation, filtration, or dialysis. As with whey, whey protein concentrate can be used as a fluid, concentrate, or dry product form. The acidity of whey protein concentrate may be adjusted by the addition of safe and suitable ph-adjusting ingredients.

Whey Protein Isolate is the substance obtained by the removal of sufficient non-protein constituents from whey so that the finished dry product contains not less than 90% protein on a dry basis. Whey protein isolate is produced by separation techniques such as precipitation, membrane filtration and/or ion exchange. Whey protein isolate can be used as liquid or as a dry product. The acidity of whey protein isolate may be adjusted by the addition of safe and suitable ph-adjusting ingredients. Dairy Product Solids are modified dairy products (permeates and products derived therefrom) obtained by the removal of protein and/or lactose, and/or minerals from milk or whey. The dry product shall contain at least 59% lactose, 10% protein maximum, and 27% ash maximum. Removal of the dairy constituents is accomplished by separation techniques such as precipitation, membrane filtration or dialysis. Dairy Product Solids can be used as liquid or as a dry product. The acidity of dairy product solids may be adjusted by the addition of safe and suitable ph-adjusting ingredients.

D A I R Y P R O D U C T S U T I L I Z A T I O N A N D P R O D U C T I O N T R E N D S 2 0 0 9 ADPI INFORMATION & MEETINGS W W W. A D P I. O R G

About the American Dairy Products Institute The American Dairy Products Institute (ADPI) is the leading association for manufactured dairy products. ADPI's main purpose is to promote the acceptance and use of processed dairy products, both nationally and internationally, by communicating the many positive health and nutritional attributes of milk-derived products. The American Dairy Products Institute was formed in April 1986 through a merger of the 61- year-old American Dry Milk Institute (ADMI) and the 15-year-old Whey Products Institute (WPI). In April 1997, the scope of the organization was further expanded by merging with the Evaporated Milk Association. A cheese division was established in 1997. ADPI's efforts today build upon three-quarters of a century of work completed by these predecessor associations. Additionally, ADPI serves its membership by: Representing the industry's interests in government and regulatory affairs; Establishing uniform product and quality standards; Providing technical assistance and marketing support; Collecting and disseminating key production and utilization statistics; Monitoring and disseminating current dairy industry information and new developments; Collaborating with other dairy associations on issues of common interest; and Providing a strong, effective voice for the manufactured dairy products industry. Current ADPI membership includes manufacturers of evaporated and condensed milk, dry milk, cheese and whey products; firms that provide supplies and services to processors; and many companies that either use or trade these manufactured dairy products or are otherwise involved in the dairy industry. While the majority of ADPI members are located in the U.S., the organization also represents many international members. American Dairy Products Institute 116 N. York St., Suite 200 Elmhurst, Illinois 60126 630-530-8700 www.adpi.org

UPCOMING ADPI CONFERENCES/SEMINARS o 2010 ADPI/Cornell University Technical Symposium Hilton Garden Inn, Ithaca, NY September 14-15 o 2010 ADPI Dairy Ingredients Seminar Cliffs Resort, Shell Beach, CA October 5-6 o 2011 ADPI/ABI Annual Conference Chicago Marriott Downtown April 24-26 o 2011 International Whey Conference Chicago Marriott Downtown September 18 21 o 2012 ADPI/ABI Annual Conference Chicago Marriott Downtown April 29 May 1 o 2013 ADPI/ABI Annual Conference Chicago Marriott Downtown April 28 30

Jim Page Memorial Scholarship The ADPI Jim Page Memorial Scholarship was created in memory of James J. Page who enjoyed a distinguished marketing career in the dairy industry and demonstrated exceptional leadership skills while serving as the Chief Executive Officer of ADPI from 2002 through 2008. This scholarship is awarded to the dependent of an employee or to an employee whose company is a member of ADPI. The scholarship is a one year grant, of a minimum of $1,000. The recipient of this scholarship must be in good standing academically at an accredited college or university, pursuing a course of study that will lead to a bachelor s degree, have completed at least one full semester (or the equivalent thereof) and must have a cumulative GPA of at least 3.0 on a standard 4.0 scale. This award may be used for any educational expenses that a student may have in furthering his/her education. (Such as, but not limited to: tuition, books, room & board etc.). The recipient of the scholarship will be announced at the ADPI/ABI Annual Conference held in Chicago, IL each year. Scholarship applications can be downloaded at the ADPI website at www.adpi.org or by contacting the ADPI office at info@adpi.org or 630-530-8700. Hunter, Walton & Co., Inc. International Ingredient Corporation Michigan Milk Producers Assn. Swiss Valley Farms Tedford/Tellico, Inc. The Milky Whey Inc. Trega Foods, Ltd. United International Industries, Inc. Less than $1,000 ADPI Wishes to Acknowledge the Generous Contributions of the Following Organizations to the Jim Page Memorial Scholarship $5,000 or more Davisco Foods International, Inc. $2,500 - $4,999 Hilmar Cheese Company $1,000 - $2,499 Agri-Mark, Inc. Brewster Dairy, Inc. Darigold, Inc. Keough Ledman Associates, Inc. Merrick Animal Nutrition, Inc. O-AT-KA Milk Products Coop., Inc. Agri-Dairy Products, Inc. Associated Milk Producers, Inc. Bluegrass Dairy & Food LLC California Dairies, Inc. Carlyn Dairy Products, Inc. DCI, Inc. Filtration Engineering Co., Inc. Franklin Farms East, Inc. Jim Page Memorial Scholarship Contribution Form I would like to make the following contribution to the Jim Page Memorial Scholarship. $ Pay by credit card Visa Mastercard Discover American Express Card Number: Expiration Date: Name on Card: Signature: Checks and forms can be sent to: Jim Page Memorial Scholarship c/o American Dairy Products Institute ~ 116 N. York Street, Ste. 200, Elmhurst, IL 60126 Tax-deductability status pending