Australian dairy farmers are dedicated to providing a high standard of care for our animals, and to changing practices when in the best interests of our
livestock and to protect the reputation of our industry.

The Australian dairy industry wants to be proactive on measures to support excellent animal welfare outcomes and to meet the expectations of the community,
our customers and consumers. Failure to meet these obligations, risks the introduction of onerous and unrealistic regulations and/or damage to our
reputation and markets.

In April 2015, following a series of meetings with farmers, vets and processors, the dairy industry agreed to work towards the phase-out routine calving
induction nationally. Subsequently, the Australian Dairy Industry Council (ADIC) has introduced a target for 2016 to limit routine calving induction
to 15% of cows per herd.

This target applies unless an exemption is granted. In 2016, exemptions may be granted either by implementing a herd fertility management plan or by obtaining
dispensation for exceptional circumstances beyond the control of the herd manager. An ‘Oversight and Engagement’ Panel will consider requests for exemptions
and grant approvals as appropriate. Whilst there is no legal requirement on dairy farmers to achieve the 15% target in 2016 the dairy industry is seeking
to achieve industry-wide practice that is over and above the legal requirements and is confident farmers will adopt the recommended voluntary industry
targets as the phase-out progresses.

Progress will be monitored and reviewed to inform the revision of annual targets until the phase-out is achieved and no routine calving induction without
exemption for exceptional circumstances beyond the control of the herd manager are performed. The industry will work with farmers, vets and their advisers
to ensure annual targets are achieved. This approach is similar to the successful New Zealand strategy where routine calving induction was phased out
over a period of time using progressively reduced annual limits.

The ADIC and Dairy Australia will continue to work with farmers, veterinarians, state dairy farmer organisations, processors and other stakeholders, to
ensure all timeframes and targets are workable and achievable. We recognise that this involves a significant management change for some farmers.

As the Australian Cattle Veterinarians play a key role in calving induction, the industry has frequently consulted these experts. In mid-February there
was a workshop for cattle veterinarians servicing dairy farms where routine calving inductions are performed. The workshop provided a forum to discuss
the approaches and support required to implement the revised industry policy on routine calving induction and the need to cease late inductions.

Key items discussed were:

• existing fertility programs such as InCalf, InCharge and Repro Right and additional assistance;
• the implementation of fertility management plans;
• the dispensation process; and
• ongoing monitoring and reporting templates.

The workshop recognised that the tools necessary to improve herd fertility and to phase out routine calving induction are available for both vets and farmers
but that it will not be an easy process and engagement across the industry throughout the whole process is critical. Vets who were unavailable at the
time of the workshop are being contacted by the Australian Cattle Vets and Dairy Australia with information about the phase-out of routine calving
induction.

A particular concern recognised by the industry has been the use of late calving induction.

Late inductions (performed within 4-6 weeks of the due calving date) provide no overall reproductive benefit for the herd and should not be performed except
for the welfare of the cow or her calf. Early pregnancy testing is required by these practices to make sure late inductions are not occurring.

Further information on the phase out of routine calving induction can be found on the Dairy Australia and Australian Dairy Farmers websites.

*Routine calving induction is all non-therapeutic inductions.

Are you a member of Australian Dairy Farmers (ADF) interested in making a contribution to policy for our industry? There are two weeks left to register
your expression of interest in joining one of ADF’s Policy Advisory Groups (PAGs):

• Markets, Trade and Value Chain;
• People and Human Capacity;

• Animal Health and Welfare;
• Farming Systems and Herd Improvement; and
• Natural Resources.

PAGs play a key role in setting business objectives for our industry and driving policy formulation. They help to ensure dairy interests are properly represented
at a domestic and international level.
ADF President, Simone Jolliffe said the role of the PAGs was critical to policy formulation for the long-term future of dairy.

“We face many challenges as an industry and have always relied on the vision, passion and participation of people within dairy to help find viable solutions,”
said Mrs Jolliffe.

ADF PAGs recommend policy settings to the ADF via the National Council and also act in an advisory capacity providing feedback to Dairy Australia, state
dairy farmer organisations (SDFOs) and other bodies like the National Farmers Federation and the Australian Dairy Products Federation.

Mrs Jolliffe welcomed and encouraged direct involvement from dairy farmers to drive policy in the right direction.

Expressions of interest close Friday 18 March 2016. For more information and to receive an application form contact schahine@australiandairyfarmers.com.au.

The Australian Dairy Industry Council (ADIC) is excited to partner with the Agribusiness Outlook Australia 2016conference in Sydney on 24-26 May.

Dairy industry representatives are invited to join agribusiness leaders to explore strategic solutions to the key challenges facing agriculture.

ADIC Chair, Simone Jolliffe will be participating as a panellist during two sessions on how to leverage the benefits of free trade agreements for the
agribusiness sector and exploring brand Australia respectively.
Register before 1 April and save up to $300! For more information and to register, visit http://www.questevents.com.au/agribusiness-outlook-australia-2016 or email info@questevents.com.au.

Are you a member of Australian Dairy Farmers (ADF) interested in making a contribution to policy for our industry? There are two weeks left to register
your expression of interest in joining one of ADF’s Policy Advisory Groups (PAGs):

• Markets, Trade and Value Chain;
• People and Human Capacity;

• Animal Health and Welfare;
• Farming Systems and Herd Improvement; and
• Natural Resources.

PAGs play a key role in setting business objectives for our industry and driving policy formulation. They help to ensure dairy interests are properly represented
at a domestic and international level.

ADF President, Simone Jolliffe said the role of the PAGs was critical to policy formulation for the long-term future of dairy.

“We face many challenges as an industry and have always relied on the vision, passion and participation of people within dairy to help find viable solutions,”
said Mrs Jolliffe.

ADF PAGs recommend policy settings to the ADF via the National Council and also act in an advisory capacity providing feedback to Dairy Australia, state
dairy farmer organisations (SDFOs) and other bodies like the National Farmers Federation and the Australian Dairy Products Federation.

Mrs Jolliffe welcomed and encouraged direct involvement from dairy farmers to drive policy in the right direction.

Expressions of interest close Friday 18 March 2016. For more information and to receive an application form contact schahine@australiandairyfarmers.com.au.

The Minister for Agriculture and Water Resources, the Hon. Barnaby Joyce, has supported changes to the dairy industry levy poll process, voted on by levy
payers in 2015.

The Bill to amend the current Act was introduced to the lower house on 11 February 2016, and debated on 25 February 2016. Debate in the Senate commenced
on 29 February and ADF currently awaits a final decision on the Bill.

“Australia’s dairy sector is an important and forward-looking industry, with good leadership and a strong vision for its future,” Minister Joyce said.

“Levy payers have demonstrated strong support for these changes, which will simplify and streamline the dairy levy process.”

Mrs Jolliffe said the changes are expected to result in a simpler, less costly levy poll process, while still ensuring accountability in spending levy
funds is retained.

“This means these levy funds can be directed towards vital research, development and extension programs, increasing productivity and profitability
and continuing to strengthen innovation within our industry.”

For more information on the levy poll changes please see www.dairylevypollreview.com.au.

Building on the popular Good Bulls Guide, the new Good Bulls app makes it easier than ever for dairy farmers to identify bulls that match their breeding
priorities.

Drawing from an expansive database of local and international dairy bulls, the Good Bulls App allows bulls to be sorted on Australia’s three breeding indices: Balanced Performance Index (BPI), Health Weighted Index (HWI) and Type Weighted Index (TWI).

Up to 50 filters can be used to find bulls that match your breeding objectives. Bulls can be filtered by any trait (e.g. protein, cell count, fertility
or mammary system) or by semen company, pedigree, genetic characteristics and other factors.

The app provides detailed ABVs on each bull making it easy to compare between bulls and shortlist bulls of interest. Shortlisted bulls can be exported
to a trusted advisor to facilitate semen purchasing decisions.

Dan Knee, who milks 400 cows at Toora, Vic was one of the test users in the app development. “The App is great. It makes it quicker and easier to
identify bulls with the traits that are important to me. It has turned a job that once took hours into a simple, fun task,” he said.

Sarah Saxton, from the Australian Dairy Herd Improvement Scheme (ADHIS), said the app would be updated twice a year with the April and August release
of Australian Breeding Values (ABVs).

The app is available for both iphone and android.
For details on the app visit www.adhis.com.au/goodbulls

There has been a lot of discussion about investment for a stronger future this month, with a great deal of excitement generated by recent investments in
Australian dairy.

Such investment will have positive impacts for farming communities.Investors may be interested in further value added opportunities for milk processing.
This could be a generator of new growth and development for the whole industry. Investment that passes our foreign investment regulatory tests continue
to the benefit of Australian dairy.

Importantly, our industry recognises that this stronger future depends equally on economic, environmental and social outcomes. Dairy continues to hold
itself accountable by not waiting for change to occur, but by initiating positive change ourselves. The industry’s progress is highlighted by the Sustainability
Framework’s 2015 Progress Report – set to be released shortly via www.sustainabledairyoz.com.au.

It was my great pleasure to discuss the industry’s performance against the key targets with the Department of Agriculture and Water Resources in late February
at the Canberra Dairy Forum, and to share more about our industry’s commitment to retaining our social licence to operate.

I encourage you all to take a look at the Progress Report when it is released in mid-march and provide feedback.

Part of tackling sustainability challenges and helping the industry demonstrate performance to the Australian community, is investing in agile representative
structures. On the heels of a period of significant policy achievement, ADF is in the strongest position it has ever been. Much of this we owe to our
2012 restructure which helped build greater transparency and engagement with key stakeholders, particularly decision makers in government.

We recognise that there is room to further improve our representative models, to ensure that we can continue to effectively advocate on behalf of all dairy
farmers in all dairying regions. The proposed National Farmers’ Federation’s restructure has begun this conversation and ADF looks forward to furthering
this discussion to ensure dairy representation has a future that maintains currency, relevance and accountability.

Simone Jolliffe

ADF President

Competition law has been the focus of a Government overhaul over the past fiver years, with the intention of preventing situations such as the $1 per litre
milk campaign – a damaging state of affairs for dairy farmers which highlighted the significant imbalance of market power between retailers and suppliers
in the grocery supply chain.

In its discussion paper on the Options to Strengthen the Misuse of Market Power Law, Australian Dairy Farmers (ADF) once
again emphasised the need for an ‘effects test’ to be inserted into Australia’s Competition Law.

Without an effects test the current tactics and actions of the major retailers will continue to result in substantial lessening of competition in the market
place. This means a significant impact on the viability of proprietary branded dairy products, less product variety on supermarket shelves, less choice
and in the long term, higher prices for consumers.

The Australian Competition and Consumer Commission (ACCC) must be
given the ability to examine the effect of such strategies, with particular emphasis on the impact on competition (including small businesses like
corner stores and regional supply chains), consumer choice, farmer viability and future prices.

Of the six options proposed to amend the current misuse of market power provisions, ADF believes the most practical option proposes that the existing provision
be amended by removing the words ‘take advantage’. The law would be amended with the wording, ‘purpose, effect or likely effect of substantially lessening
competition’ test.

However, ADF does not agree with the inclusion of the ‘purpose’ element due to the practical difficulties of proving purpose. Inclusion of the purpose
element and defence as outlined in the Harper Review recommendation 30 may make the effects test unworkable in reality.

An effects test is in line with competition policy around the world – almost all western nations, except for Australia and New Zealand have an effects
test.

There is strong support for the proposed changes to the effects test, from competition experts, including the Harper Review Panel, the ACCC, former Chairmen
of the ACCC, Rod Sims as well as small businesses, suppliers and farmers across Australia.

ADF will continue to advocate for stronger misuse of market power laws to foster a more competitive business environment. To view ADF’s submission to the
discussion paper, click here.

Extreme weather conditions in February continue to challenge farmers across all dairying regions. Bushfires in Tasmania and Western Australia have impacted
dairy farms. As farm businesses may be affected by elements beyond their control, preparing for threats is essential to protect your family, staff,
livestock and business. ADF’s primary focus is to ensure famers are equipped with fundamental information and to work with its state members with recovery
efforts.

To access resources and tools to help manage extreme weather events, refer to Dairy Australia’s website here.

Australian Dairy Farmers (ADF) has joined the National Farmers Federation (NFF) in calling for the Federal Government to halt the proposed backpacker tax.

As part of the 2015 Federal Budget the government announced that from 1 July 2016 all working holiday makers will be taxed at a rate of 32.5 per cent on
all income.

ADF President Simone Jolliffe said that dairy farmers rely on backpackers for vital on-farm roles which cannot be filled locally or to complement their
existing workforce during peak times.

“The dairy industry is suffering a skilled labour shortage which means that we need overseas workers, such as backpackers, when we cannot find suitable
local staff,” Ms Jolliffe said.

“If this tax is brought in as it currently stands, backpackers may choose to travel to other countries such as New Zealand.”

“This would be damaging to the dairy industry, regional communities and the tourism industry, as well as the broader economy.”

Backpackers currently earn, on average, about $15,000 while in Australia, and may be eligible to claim the tax-free threshold.

“ADF believes it is fair and reasonable for backpackers to pay some tax, but 32.5c is excessive,” Ms Jolliffe said.

“We are supporting NFF’s position that 19 per cent, achieved through deactivation of the tax-free threshold, is fairer to both backpackers and the agricultural
industry which relies on them.”

We encourage everyone who understands the significant contribution backpackers make to agriculture to support NFF’s campaign by signing an online petition.

To join the petition, go to https://www.change.org/p/australian-government-stop-the-backpacker-tax

The official signing of the Trans Pacific Partnership (TPP) in Auckland, on 4 February has been welcomed by the Australian Dairy Industry Council (ADIC).
The signing follows an agreement reached between the twelve negotiating countries on 6 October 2015.

The TPP made some gains made for the Australian dairy industry in improving opportunities in key export markets such as Japan.

The conclusion of the TPP continues a historic period of increased trade liberalisation over the past few years.

Following the signing ceremony, Australia must now go through a domestic ratification process. This means that before any binding treaty action is taken,
the TPP text and a National Interest Analysis will be tabled in Parliament for 20 joint sitting days.

The Joint Standing Committee on Treaties (JSCOT) will conduct an inquiry into the TPP and report back to Parliament on ‘matters arising from the TPP treaty
and related National Interest Analysis and proposed treaty actions presented or deemed to be presented to the Parliament.’

The ADIC will provide a submission to the inquiry.

Welcome to the New Year. I hope you have all had the chance for a short break at least, and are ready to work together to tackle the challenges and
opportunities that 2016 brings.

In recent years, Australian Dairy Farmers (ADF) has strengthened dairy’s ties with Canberra to raise the profile of the issues that matter most to
our farmers. ADF has maintained our reputation of acting apolitically, being accessible to all politicians, and being willing to listen.

This year we will continue to build this profile, while simultaneously building on our capacity to deliver value to members.

So far in 2016, key members of the ADF team have visited members in central New South Wales. In February our CEO will visit Western Australia – to
talk and listen about priorities for the year ahead. These are the first of many 2016 interstate meetings to follow.

I encourage you to take the opportunity and introduce yourself to our team. The passion and commitment that the ADF staff has to help achieve a stronger
future for our industry is evident, and we are all prepared to listen to your thoughts, ideas and constructive feedback.

The beginning of the year has been challenging for farmers. Extreme weather conditions brought drought or very dry conditions in Tasmania, West Victoria,
South Australia as well as savage bushfires in Western Australia. ADF is seeking to assist its state members with recovery efforts. I commend the
efforts of WA Farmers, Western Dairy and Dairy Australia, in providing practical support and counsel to the affected farmers in WA.

Events like these are a timely reminder that so many aspects of our business are affected by elements beyond our control. ADF is committed to ensure
that farmers have the information and resources they need to take control of what they can. Dairy Australia also has a great resource of tools
and information to assist in preparation and recovery.

In February, ADF will host an environmental scanning and industry planning workshop with key stakeholders such as our state members and Dairy Australia.
These sessions will aid in setting our advocacy priorities for 2016, to establish a sound policy platform which ensures we can capitalise upon
growth opportunities delivered by 2015’s advocacy.

I look forward to getting out and about in order to meet with as many members and non-members as possible over the course of 2016 to ensure ADF can
continue to deliver value for the industry.

Simone Jolliffe

ADF President