1. 2 DFA Regional Meetings October 2013 Managed by Dairy Management Inc.

2. Margaret Speich Senior Vice President, Strategic and Industry Communications U.S. Dairy Export Council mspeich@usdec.org 3 Presenter 3. 4 Unified effort to grow value, volume of exports Provide outlet for U.S. products in growing overseas markets Dairy producers through DMI Industry collaboration through membership 4. 5 5. Program Focus 6 Trade Policy (funded by member dues) Market Access and Regulatory Affairs Research and Marketing Assistance 6. Program Focus 7 Trade Policy (funded by member dues) Get us into markets Market Access and Regulatory Affairs Research and Marketing Assistance 7. Program Focus 8 Trade Policy (funded by member dues) Get us into markets Market Access and Regulatory Affairs Help us stay in the markets Research and Marketing Assistance 8. Program Focus 9 Trade Policy (funded by member dues) Get us into markets Market Access and Regulatory Affairs Help us stay in the markets Research and Marketing Assistance Give U.S. suppliers the tools to meet and compete for customer needs 9. 10 Building Global Demand with Representation Around the World 10. China Japan Mexico, includin g Central America Middle East & North Africa South America South Korea Southeast Asia United States Vietnam 11 Building Global Demand with Representation Around the World 11. 12 Export Performance 12. 2013: On Track for Another Record Year 13 * 2013 USDEC estimate. Source: USDEC, USDA 1,200 2,360 3,520 4,680 5,840 7,000 05 06 07 08 09 10 11 12 13* (million$) U.S. Exports and Imports (total value) exports imports Exports $6.5B est. Imports $3.2B est. 13. U.S. Export Volume Also Up in 2013 14 * 2013 USDEC estimate. Source: USDEC, NMPF, USDA - 800 1,600 2,400 3,200 4,000 05 06 07 08 09 10 11 12 13* (millionlbs.) U.S. Exports and Imports (total-solids basis) exports imports Exports 3.8B lbs. est. Imports 779M lbs. est. 14. 2013: U.S. Export Growth in All Our Major Markets Source: USDEC, USDA 62% to Exports 15 U.S. DAIRY EXPORTS, TOP 10 MARKETS (in millions) (JANUARY-JULY AND % CHANGE VS. PRIOR YEAR) CANADA $327 m, +20% MEXICO $808 m, +15% CARIBBEAN $123 m, +6% SOUTH AMERICA $163 m, +12% MIDDLE EAST/ NO. AFRICA $427 m, +46% CHINA $344 m, +41% SO. KOREA $174 m, +27% JAPAN $181 m, +1% SOUTHEAST ASIA $728 m, +26% OCEANIA $148 m, +10% 15. 16 and Across Almost All Product Categories * Through July. Source: USDEC, USDA 2013* U.S. exports MT Change vs. 2012 NDM/SMP 317,127 +15.9% Whey products 291,477 +5.4% Lactose 212,326 +16.8% Cheese 176,052 +8.1% Food preps (blends) 50,988 +17.3% Fluid milk/cream (000 liters) 45,674 +45.9% Butterfat 40,961 +28.1% 16. More Than 15% of U.S. Milk is Exported 3.7 4.5 4.4 5.0 5.2 5.5 5.1 5.7 7.6 8.3 9.3 9.8 11.0 9.3 12.7 13.3 13.2 15.2 2.7 2.9 3.6 3.9 4.0 4.2 4.2 4.4 4.5 4.6 4.4 4.3 4.0 3.4 2.9 2.9 3.2 2.9 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13* Totalmilksolids,%ofU.S.production U.S. Dairy Trade Balance, 1996-2013 Exports Imports * 2013 USDEC estimate. Source: USDEC, NMPF, USDA 17. 18 Five Things to Watch in 2014 18. 19 1. Supply Comes Back EU and Argentina are milk deliveries. 2013-14 is USDEC estimate. Source: USDEC, USDA, EuroStat, DCANZ, DairyAustralia, Argentina Ministry of Agriculture. 19 +7.2 +8.5 +8.5 +7.2 240,000 245,000 250,000 255,000 260,000 265,000 270,000 275,000 280,000 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14* (000MT) Milk production (July-June) (EU-27,U.S., New Zealand, Australia, Argentina) -3.4 m +6.1m +7.1m +8.3m 19. 20 2. China Demand Underpins the Markets 2013 is USDEC estimate. Source: USDEC, Global Trade Atlas. 20 +7.2 +8.5 +8.5 +7.2 +8.3m 0 90 180 270 360 450 540 2008 2009 2010 2011 2012 2013* (millionMT) China WMP imports 20. 21 3. United States Adds WMP Source: USDEC, Global Trade Atlas. 21 +7.2 +8.5 +8.5 +7.2 +8.3m WMP Importers WMP Exporters 2012, million MT 2012, million MT China 405.5 NZ 1,261.3 SE-Asia 5 237.1 EU-27 387.5 Venezuela 216.2 Argentina 200.7 Algeria 187.7 Australia 109.1 Nigeria 75.5 Uruguay 61.9 Brazil 70.7 Singapore 52.6 Sri Lanka 70.5 United States 20.9 21. Getting down to the tough stuff 22 4. Transpacific Partnership (TPP) Gets Done 22. Getting down to the tough stuff Our negotiating priorities New access, esp. Canada and Japan 23 4. Transpacific Partnership (TPP) Gets Done 23. Getting down to the tough stuff Our negotiating priorities New access, esp. Canada and Japan Enforcement of SPS rules 24 4. Transpacific Partnership (TPP) Gets Done 24. Getting down to the tough stuff Our negotiating priorities New access, esp. Canada and Japan Enforcement of SPS rules Address NZ 25 4. Transpacific Partnership (TPP) Gets Done 25. Getting down to the tough stuff Our negotiating priorities New access, esp. Canada and Japan Enforcement of SPS rules Address NZ 26 4. Transpacific Partnership (TPP) Gets Done Completed by mid-2014? 26. Fonterra issues got a lot of attention in 2013 27 5. Safety/Quality Stay in the Headlines Plant Food Manufacturers & Outlets PlantTransportation Farm Bulk Tank Food Manufacturers & Outlets Domestic Brokers Exporters Importers Export Domestic Ingredients Additives Equipment Packaging 27. Fonterra issues got a lot of attention in 2013 Consumers remain highly sensitive 28 5. Safety/Quality Stay in the Headlines Plant Food Manufacturers & Outlets PlantTransportation Farm Bulk Tank Food Manufacturers & Outlets Domestic Brokers Exporters Importers Export Domestic Ingredients Additives Equipment Packaging 28. Fonterra issues got a lot of attention in 2013 Consumers remain highly sensitive U.S. traceability best practices for plants should help 29 5. Safety/Quality Stay in the Headlines Plant Food Manufacturers & Outlets PlantTransportation Farm Bulk Tank Food Manufacturers & Outlets Domestic Brokers Exporters Importers Export Domestic Ingredients Additives Equipment Packaging 29. Summary 2013 exports record value 30 30. Summary 2013 exports record value Cautiously optimistic about 2014 because world production in growth mode again 31 31. Summary 2013 exports record value Cautiously optimistic about 2014 because world production in growth mode again Though anticipate demand from China and other countries to be strong to help markets from weakening 32 32. Summary 2013 exports record value Cautiously optimistic about 2014 because world production in growth mode again Though anticipate demand from China and other countries to be strong to help markets from weakening U.S. becoming more responsive to buyer needs with whole milk powder 33 33. Summary 2013 exports record value Cautiously optimistic about 2014 because world production in growth mode again Though anticipate demand from China and other countries to be strong to help markets from weakening U.S. becoming more responsive to buyer needs with whole milk powder Free trade agreements will be important 34 34. Summary 2013 exports record value Cautiously optimistic about 2014 because world production in growth mode again Though anticipate demand from China and other countries to be strong to help markets from weakening U.S. becoming more responsive to buyer needs with whole milk powder Free trade agreements will be important Food, quality issues to continue 35 35. Margaret Speich Senior Vice President, Strategic and Industry Communications U.S. Dairy Export Council mspeich@usdec.org 36 Thank you