On Board With The Chairman - January 2026

Dear Member-Owners,

The Board of Directors held its first meeting of 2026 lastweek at the Visalia office.  

CEO Rob Vandenheuvel kicked off the meeting with some marketinsights and key updates in California and within CDI as we enter the new year.Rob reviewed the month-to-date member milk flows and raw milk customer demand,as we move closer to the peak of the spring flush in a couple of months. As wehave experienced on farm, milk flows are picking up, while customer orders havebeen somewhat impacted by the closure of Leprino’s Lemoore East facility as ofJanuary 1. The team at CDI is doing its best to keep the trucks moving in andout of both CDI and customer plants. Rob then pivoted to a broader look at theCDI business and key strategic priorities as we continue this transformation,focused directly on improved profitability for the cooperative.

Jason Allen was next on the agenda, presenting thepreliminary 2025 year-end financial report. Results are preliminary becausenothing is considered final until the annual outside audit is completed aroundmid-March. As it stands, December and year-end results came in on target,despite some moving pieces – particularly the volatile markets. Final 2026financial results will be presented at the Annual Meeting, scheduled to be heldin Visalia on Wednesday, April 22. Following the financial report, Jason broughta few other issues to the board, including the current status of somenon-processing properties owned by CDI, as well as upcoming strategic work withCDI’s lending group.

The board discussion then pivoted to our ingredientsbusiness, including milk powders, bulk butter, and lactoferrin. We looked atwhere our year-end powder inventory landed and our current forecast for 2026 sales.The markets, as usual, are erratic, and the team has been working to place ourproducts into the best markets possible.

Michael Burdeny presented on retail butter and the latest onbeverage demand out of our Bakersfield facility. Retail butter demand has beenstrong, particularly as the commodity price of butter has moved below the $2level. Meanwhile, the Bakersfield plant started production in December for onenew high-volume customer and is gearing up for another. In December, CDI beganmaking a new coffee creamer under the brand “Members Mark,” the private labelbrand for Sam’s Club. Product hit the shelves in late December and has alreadygotten very positive reviews in the market. The other new high-volume customerproduct continues to progress and should start production very soon. We, as aboard, are excited to see this finally take shape and get these products intothe marketplace and into the hands of shoppers.

Darrin Monteiro finished the meeting with an update on ourcurrent Capacity Shortage Surcharge (CSS) program, as January marks the firstmonth of operating under the program. As the bylaws require the charges appliedunder the program to be based on actual costs of handling excess milk, finalnumbers will not be available until we close January. We will provide thosenumbers and any associated charges on that milk that was produced over theexempt volumes under the CSS as soon as we have them available.

 As always, if you have any questions or concerns, pleasefeel free to reach out to any board members or me directly.

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 All the best,

Cory Vanderham

Chairman of the Board

Vanderham West Dairy

Lazy V Farms

559-269-9618

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