On Board With The Chairman - June 2026

Dear Member-Owners,

The June board of directors meeting was held a couple of weeksago at the Visalia headquarters, with the bulk of the agenda dedicated to the commercial/salesside of our business.

Rob Vandenheuvel was the first to present his CEO report andupdated the board on the markets for both powder and butter. These markets havebeen on a roller coaster ride for the last four to six weeks with plenty ofuncertainty as to where they’ll settle. The staff has remained actively engagedwith our hedging team to manage through these volatile markets. Rob alsoupdated the board on progress toward recommissioning our Los Banos plant as aMilk Protein Concentrate production facility, with everything looking to comein on time and within budget.

Peter Ernster was next to report to the board and gave hisupdate on all things powder. Peter has done a great job utilizing the markethighs to find homes for any extra powder produced above our contracts. Ourinventories for powder for this time of year are in a great spot and right inline with budget. Peter updated the board on the sales and quality of our newventure in the Lactoferrin market. We continue to see strong demand for thisnew product, and as we continue to produce it and conduct more testing to proveit in the market, we’re seeing even more demand and a stronger price. The trialphase of this product is extremely strenuous and time-consuming, but as we approachthe finish line, we’re excited to see where it will take CDI. Peter closed histime by digging into our bulk butter business, which he also oversees. It hasbeen an up-and-down year for bulk butter, but things seem to be improving inrecent weeks. Export opportunities that were impacted by the Middle Eastconflict and the resulting supply chain disruptions appear to be coming back, leadingto more butterfat being sold offshore.

Michael Burdeny then came to the front of the room to updatethe board on the consumer-products side of the business, specifically forbutter and packaged fluid milk. Butter continues to perform well, and consumerdemand is holding strong despite inflationary pressures on consumers thatnaturally occur when gas prices rise, as they have in recent months. On thefluid side, we reviewed progress at the Bakersfield plant. Michael updated theboard that the products that were made for Costco have been doing well in the marketplace,and we continue to see growing demand. We were updated that international saleshave also shown good growth and that we expect more products to go overseasover the next quarter, which is great news. Bakersfield is producing well, butthere’s still more work to be done to get this plant to full capacity with thethree lines we have installed. As of date, Bakersfield is processing about 15loads of raw milk equivalent a day, with a forecast to continue growing thatvolume each month as demand grows.

On a more somber note, the board and staff would like tosend our thoughts and prayers to the Oppedyk family following the sudden lossof Richie Oppedyk, who was a member-owner in District 3. We pray that our Lordcontinues to put his comforting hand upon the family and gives them peace andcomfort as they navigate the road ahead.

The board will not be holding a meeting in July, so the nextOBC will be coming out in August after the board meeting. I wish all of you agreat summer with family and friends, and that you enjoy what God has blessedus with. As always, please feel free to reach out to me or any other directorwith questions.

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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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