Use "options ndots:2" in global DNS resolver
I have this same issue. I was able to easily fix this on my linux desktop by adding the line to /etc/resolvconf/resolv.conf.d/head

OSX is a different beast though, hoping someone smarter than I am can find a way. I miss being able to "ssh server1.prod" :(

The alternative is to set up "ssh" as an alias to a script, and the servername is your $1. The script can see if the last 5 chars of $1 are ".prod" and if so ssh to the fqdn.