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August President’s Message

The
Australian dairy industry has historically managed price volatility, global supply and demand issues and the fluctuations of the Australian dollar
to good effect, maintaining international competitiveness, innovation and resilience to market volatility.

While we’re in volatile times, there is a lot more to be factored into the market in the next few months. Rather than panic, we need to ensure we are prepared
for the short term difficulties facing us and remember that the long-term outlook for dairy is positive, despite current market volatility.

Industry needs to work to its strengths as a cost-efficient milk producer of quality dairy products in order to face the expected challenges. Within the
industry there are considerable resources and work being applied to help dairy farmers confront the volatility challenge. Australian Dairy Farmers
(ADF) is working in partnership across the industry and with government to undertake work and analysis to support Australian dairy farmers in their
decision making.

It is reasonable to ask why up until now the Australian dairy industry has not been affected to the same degree as New Zealand. Unlike New Zealand Australia
has more the 50 percent of its production consumed domestically. This provides a dampening effect on the downward trend of international markets on
farm gate pricing. Our product mix has also allowed for the pricing trends to be less severe. However, there is no doubt that this international pricing
impact is placing downward pressure on expected farm gate pricing that was not even seen two to three months ago.

Those farmers who supply processors that are uncontracted and exposed to world export pricing should treat the 2015/16 season with a significant amount
of caution, understanding their underlying costs and being aware of input costs which will affect profitability.

Whether you’re a farmer, state organisation or peak body, we are all striving for the same outcome – a healthy and sustainable dairy industry. Industry
projects such as the Sustainability Framework and the Australian Dairy Vision help provide a strategy for ADF’s efforts. On this note, it is with great
pleasure that I welcome Benjamin Stapley as incoming Chief Executive Officer (CEO) of ADF. With a strong background in member advocacy, stakeholder
engagement, policy development and media management, Mr Stapley comes into the role after two years as Director of Policy and Regulation at the Plastics
and Chemicals Industries Association (PACIA).

I look forward to the fresh perspective and expertise that Ben brings to the role and along with my fellow Directors, National Council and staff look forward
to working with him to continually improve the sustainability and profitability of farmers across all dairying regions. I hope you will all join me
in welcoming Ben to our dynamic industry when he commences as CEO on 1 September 2015.

Noel Campbell

ADF President

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