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1

International Update

Milk Production

European milk production continues to trend downward, down 3.6% versus prior year,

while US milk production continues to grow and is projected by Blimling to continue:

January 2017 Planning Meeting - Philippines

In January, all our international representatives met in the Philippines in place of

our traditional January meetings in San Francisco. The efficiency of meeting

closer to most of our international markets saved approximately 50% of the

historic cost and provided an opportunity to have both individual planning

meetings and joint sessions. Jen also met individually with each country’s team to

customize their launch plans for social media using the global platform that Jen

has developed. We had a “lessons learned” session from 2016 where each country

shared their greatest challenge and success. We discussed e-commerce and other

growth platforms of the future. Imalinx, our new Mexico agency, was also present

and able to develop contacts and hear best practices from all our Asian country

teams.

Mexico

Concerns about US and Mexico trade relations seem to be creating unease. Every

month, about 25% of US NDM/SMP production goes to Mexico. Talk about

redoing trade agreements, building walls and altering immigration policies don’t

instill confidence today, even if things don’t ultimately become worse tomorrow.