Over the course of 2015, the Australian Dairy Industry Council (ADIC) increased its advocacy focus on the impacts of the Murray Darling Basin Plan (MDBP)
and the need for changes to the Plan and its implementation.

Significant achievements were made in 2015 with the Federal Government committing to legislation to cap water buybacks in the MDBP at 1500 gigalitres (GL).
Further, indications that more flexibility will be provided for environmental water trading were welcome. However, the ADIC still has concerns regarding
the MDBP’s unrealistic timelines as well as a lack of planned transition and structural adjustment.

2016 is a critical year in the Plan’s implementation. The deadline for the Sustainable Diversion Limit (SDL) adjustment mechanism is imminent. Progress
with state offset projects leading up to this June 2016 review is also of significant concern.

Secure access to quality water is paramount to dairy’s future. Reduced access to the water resources the industry relies on will impact dairy’s profitability,
productivity and international reputation. To ensure that the dairy industry’s key priorities are effectively represented and addressed in this discussion,
the ADIC has re-formed its Water Taskforce.

The ADIC Water Taskforce, chaired by Victorian dairyfarmer Daryl Hoey, provides a cross-industry group to support the ADIC in driving for pro-dairy solutions
in current and future opportunities for review and change.

The priorities of the Taskforce for 2016 are to seek a review and delay the 450GL ‘upwater’ as part of a stock take to better understand the effects (both
positive and negative) of water recovery. Further, the Taskforce will also push for the delivery of the full 650 GL in environmental offsets to ensure
any shortfall does not have to be covered by farmers. Other targets include a more transparent water market and information as well as ongoing monitoring
and support for regional and state water programs including the Northern Basin and Menindee Lakes and Connections Reviews.

For further information about the ADIC’s Water Taskforce contact the ADF Office via (03) 8621 4200.

Over the course of 2015, Australian Dairy Farmers (ADF), together with state members and industry partners has worked collaboratively with government to
broker new trade deals which increase access to key Asian markets hungry for safe, clean and sustainable Australian dairy produce.

ADF welcomed the China-Australia Free Trade Agreement (FTA) which entered into force on 20 December 2015, followed quickly by a second round of tariff
reductions on 1 January 2016.

Also on New Year’s Day, the Korea-Australia FTA progressed to its third year of benefits for dairy exporters, meaning further tariff reductions and increased
quotas for a range of Australian dairy exports.

Similarly, the Malaysia-Australia FTA moved into its fourth year of implementation, translating to further increased liquid milk tariff rate quotas. The
Thai-Australia and US-Australia FTA’s also celebrated a milestone in passing the 10 year point, and provided improved duty free quotas for Australian
dairy.

Further to this, the finalisation of the Trans-Pacific Partnership negotiations in late 2015, plus the late December announcement of an agreement to abolish
government subsidies on agricultural exports through the World Trade Organisation.

The Australian dairy industry still faces challenges in its export focused markets, especially with regard to technical barriers to trade which translate
to higher production costs, reduced product returns and restricted export demands all combine to lower milk returns for farmers.

With these challenges in mind, ADF is celebrating the progress made in trade reform to the long-term benefit of our industry. This progress boosts the
industry’s competitive position in the global market and contributes to building confidence to invest in a strong future for Australian dairy.

For more information on ADF’s Markets Trade and Value Chain priorities, click here.

A world-leading smart phone app developed by the ADHIS and Dairy Australia to help farmers
choose bulls to meet their breeding objectives is now available to download, free for dairy farmers and advisors.

The Good Bulls app has been designed in close consultation with dairy farmers and advisors and builds on the popular Good Bulls Guide. The app, which can
search from over 20,000 bulls, allows farmers and advisors to search, filter, short list and export bulls based on Australian Breeding Values and Australia’s
three indices.

ADHIS Extension Officer Sarah Saxton has led the team that helped create the Good Bulls app. She said the app will be an invaluable tool to access bull
information anywhere at any time, so farmers can take charge of their herd.

“The Good Bulls app really puts the power of herd improvement in the palm of your hand by giving users on-the-go access to over 20,000 bulls and the ability
to enquire about prices with their supplier at the click of a button” Ms Saxton said.

“It’s quick and easy. Select your index and shortlist bulls based on the traits you want to improve in your herd using the Good Bulls app”

The Good Bulls app answers a strong desire by farmers and advisors to be able to filter and sort bulls based on their preferences and to improve profit
in a fun and easy way.

Sarah says “We conducted over 20 hours of one on one interviews with a range of farmers and advisors in the design of the app so we are confident this
is going to be an essential tool for the industry”.

The Good Bulls app is available for both iPhone and Android phones.

For details on how to download the app visit www.adhis.com.au/goodbulls

Since bushfires began burning in Western Australia (WA) in the week of 4 January, fires
have significantly affected the Waroona-Harvey dairying region. Now three weeks on from the devastation, recovery assistance for farmers is the primary
focus.

To support the recovery effort, WAFarmers has established a hay drive and is managing a relief appeal to collect cash donations for affected farmers. One
hundred per cent of the funds raised through the WAFarmers Fire Appeal will go directly to farmers; ensuring financial assistance is available to farmers
for tasks including the rebuilding of fencing and the purchase of feed.

WA’s Dairy Industry bodies, including WAFarmers and Western Dairy, have commenced preliminary assessments. There are approximately 20 dairy farms with
direct fire damage and many more continue to be impacted by loss of power, burnt pasture and feed supplies.

Fencing is an immediate concern, with the fires destroying over 800 kilometers of farm fences, as well as loss of pasture and newly sown crops. There have
been few reports of dairy stock loss to date.

Funds received through the WAFarmers Fire Appeal will be used directly to benefit farmers. Farmers do not have to be a member of WAFarmers to be able to
receive assistance from the funds. We encourage the public to show support for the WAFarmers Fire Appeal.

The GoFundMe account can be accessed here.

Australian Dairy Farmers (ADF) is pleased to welcome new Business Director, Terry Richardson and Independent Director, Dr Dedee Woodside, alongside recently
elected President, Simone Jolliffe to the ADF Board following the ADF Annual General Meeting on 26 November 2015.

With significant experience in various agriculture roles, as well as through their diverse industry leadership and advocacy roles, both Board members are
exceedingly well qualified for their Board position, each bringing a unique perspective to the table.

ADF interviewed each Director to find out a bit more about them. We asked them what they believe the most important policy issues are for ADF to focus
on in 2016…

Terry Richardson

As a native New Zealander I have great appreciation for the vast geographical challenges that Australian dairy farmers face. As a dairy farmer I know that it is difficult to prepare and mitigate these challenges unless we are building sustainable business models. In order to achieve this it is essential to be profitable. For these reasons I believe the short term and long term goals of ADF are intrinsically linked.

Our policy focus will always be set by what stands in the way of building a stronger future for our industry. This will mean the continued implementation of projects that propel us toward the industry’s vision to become prosperous, trusted and world renowned for nutrition.

In order to help achieve this vision, ADF can develop its communication of the role policy plays in helping us be profitable. Price will always be on the front page, but policy is always bubbling away behind the scenes – we often don’t hear much about it. Yet without strong policies that address everything from competition issues to research and development funding, it is impossible for our industry to be profitable. For this reason I am keen to work with ADF to continue to build our members and non-members’ understanding of how important policy is to what we do.

Through key achievements such as the pro-dairy China-Australia FTA we have seen how effective our industry is when united – we must continue this unity in order to see improved policy outcomes for our industry in future.

Dr Dedee Woodside

Dairy’s central focus for 2016 appears to increasingly be on water, soils and energy – and the availability, quality and sustainability of these resources.

I am attracted to the idea that with such a buzz around environmental responsibility and impact at the moment there is a real opportunity for the Australian dairy industry to make some headway on issues of concern to our farmers, processors and consumers. In particular with the recent Paris Climate Summit and the Australian Government’s commitment to energy targets we can highlight that this isn’t an overnight process. Our industry needs strong thought and planning to ensure we are achieving our environmental targets in a way that is reasonable and practical.

Already the industry has begun on this path, particularly in light of the growing opportunity in overseas markets and talk of expanding production. I am interested to contribute to this discussion, to understand whether growth is really a viable option and to understand what the limits are; where we can be smarter about our operations and where we need to change tactics entirely.

I am excited to be a part of ADF’s journey under a new President, Simone Jolliffe and a part of an industry that is growing, changing and opening up. The next few years will be very interesting.

ADF President, Simone Jolliffe welcomed the new additions to the Board and said she looks forward to working with them in 2016.

“Their vision and ideas will help ADF in its work to promote the interests and sustainable profitability of all Australian dairy farmers,” Mrs Jolliffe
said.

For more information on ADF’s Directors see
www.australiandairyfarmers.com.au

With Christmas only two sleeps away, it’s time to reflect on the role that dairy farmers (and for that matter all farmers) plays in the festive season.

We’re all looking forward to the cheese platters, custard, ice cream and all manner of other festive trimmings this holiday period. All of those tasty
dairy products have been produced by the dairy farmers of this country, which is milked and processed even as we unwrap our presents from Santa on
Christmas morning. Milking takes place every day of the year, irrespective if public holidays or religious festivals. Aussie farmers do this to ensure
that there is always milk in our fridges – 365 days a year.

So as you tuck into your Christmas pudding and add custard, butter or cream remember to thank an Australian dairy farmer who got up early to produce it.

Merry Christmas from Australian Dairy Farmers!

More support has been announced for financial counselling in drought-stricken regions in New South Wales, Queensland, South Australia, Victoria and Western
Australia. An extra $920,000 in funding has been provided for Rural Financial Counselling Service (RFCS) providers in those States to continue to help
farmers battling drought.

The funds are in addition to the $14.3 million Commonwealth funding already allocated to the RFCS programme in 2015-16.

Australian Dairy Farmers (ADF) has welcomed this support, acknowledging the financial counselling service as a vital part of supporting dairy farmers through
challenging times, including drought. ADF highlighted that the service helps people take control of their business again rather than allowing their
business to take control of them.

Agriculture needs as many financial counsellors as possible across rural Australia according to ADF, particularly as drought continues to challenge many
dairy regions.

The RFCS can support farmers with business planning, farm debt mediation and helping them access sources of professional, industry and government assistance.
The services can vary from one ten-minute phone call with a person to on-going support across a number of years.

The additional funding provided by the Commonwealth Government toward the counselling initiative will be crucial over the coming months as the pressures
of drought compound continue.

ADF encourages farmers to utilise the service and to keep in contact with neighbours who may be struggling during this time.

To find out about RFCS offered in your region contact your State Dairy Farming Organisation or visit http://www.ruralfinancialcounselling.org.au/.

The Coalition’s response to the independent review of the Water Act 2007 was released in December 2015. The Government’s decision to adopt all of the recommendations,
some wholly and others partially, including to provide greater trading flexibility for the Commonwealth Environmental Water Holder (CEWH),
is positive new for Australian dairy farmers.

The Australian Dairy Industry Council (ADIC) has lobbied hard for increased flexibility for the CEWH in optimising environmental outcomes in ways that
ensure dairy producers have better access to water supplies. Dairy has proved a flexible and responsible user of water. We have adapted our practices
to be more water-efficient. However, reduced access to water resources is already putting pressure on dairy’s productivity and profitability. This
CEWH flexibility is key to helping our industry remain viable. It will also ensure a balanced approach to achieving environmental outcomes in the Murray
Darling Basin.

The Government’s stated commitment to continue to work towards achieving a total 650GL supply offset is also positive. Achieving the full amount through
environmental works means more water stays in the irrigation pools.

Chair of the ADIC’s Basin Taskforce, Daryl Hoey described the response as a positive first step but highlighted greater improvements in the implementation
of the Act and the Murray Darling Basin Plan are still required.

“That the Government didn’t agree with the submissions of many to amend the Act to unambiguously state a triple-bottom-line objective or to strengthen
the current implementation of the legislation is of concern. Such an approach is critical,” Mr Hoey said.

“It’s good to see the Government amend timelines to some evaluations and reviews under the Act. We now need such revisions to be applied to all elements
of the Act.

“In particular, there is a need for a robust evaluation of environmental, economic and social impacts before considering an additional 450 gigalitres (GL)
of water being taken from agriculture.”

To see the ADIC submission to the Water Amendment Bill 2015 click here.

The industry bid farewell to dedicated dairy advocate, Howard Lee who sadly passed away on his way home from a meeting of NSW Farmers on the Mid North
Coast in late November.

Mr Lee, who was born in Kempsey on 10 October 1939, was an inspirational man who was admired by many. A keen industry representative, Mr Lee was part of
the NSW Farmers Dairy Committee for many years and held several other roles with the industry body, including on the NSW Farmers Executive Committee.

Mr Lee was a passionate community leader for Kempsey. For over five years he was a member of the Mooneba-Turners Flat Rural Bush Fire Brigade, which began
with a tractor and trailer. He was also President of the Kempsey Show Committee and former director of the Kempsey Heights Bowling Club.

Colleagues at New South Wales Farmers recall Mr Lee as a gentle, smiling man and a well respected community leader. Fellow North Coast NSW Dairy Committee
member and long-time friend of Mr Lee, Julie Moore described him as a real “go-getter”.

“Howard was always looking for a way to improve things for dairy farmers and to promote the good practices of dairy. He was particularly keen to see farmers
get a better milk price,” Ms Moore said. “He was a passionate advocate. He will be greatly missed.”

On behalf of the dairy industry, ADF extends its deepest sympathies to Mr Lee’s wife Shirley as well as his friends and family.

NSW Dairy Committee member, Howard Lee is remembered as a “go-getter” with a gentle spirit.

The Australian Dairy Industry Council (ADIC) has welcomed the China-Australia Free Trade Agreement (ChAFTA) entry into force on 20 December 2015.

ADIC Chair, Simone Jolliffe said the dairy industry was extremely pleased that the historic agreement has been ratified before the end of the 2015 calendar
year.

“The entire dairy value chain, led by the ADIC, has lobbied strongly for the implementation of ChAFTA and we are pleased to see its entry into force,”
Mrs Jolliffe said.

“On 20 December, Australian dairy exporters experiences the first year’s tranche of tariff reductions. This will be followed by a second round of tariff
cuts on 1 January 2016.”

“In the long term this will mean more jobs across the Australian dairy industry both on farm and in processing plants. It will provide our industry with
the confidence it needs to invest for a strong future.”

The ADIC thanked the Minister for Trade and Investment, Andrew Robb, and his team of negotiators as well as the Australian government, industry and the
broader dairy community for its ongoing support and for ensuring the deal will be ratified in the 2015 calendar year.

Open until the 31 December, the 2015 Regional Wellbeing Survey forms an important piece of social research that farming organisations and government agencies
draw on to understand farmers’ views and social impacts on a range of regional issues.

This year’s survey covers issues such as drought, water reform, green tape, CSG and mining, sustainable farming practices, markets, farm finance, and innovation.
With more than 9000 respondents in 2014, the survey results to provide a sound statistical policy resource.

For more information and to complete the online survey visit: http://www.regionalwellbeing.org.au

The results of voting on the Dairy Levy Poll Process Review were delivered on
2 December 2015, with the majority of voters in favour of the recommended changes. The levy payer vote drew 24.70% of votes, with 89.95% voting in
support of the recommended changes.

ADF President, Simone Jolliffe said the Federal Government has now be advised of the outcomes of the three month consultation process.

“The essential question was whether levy payers believed we should opt for a levy poll only when a change in the levy was being sought,” said Mrs Jolliffe.

“Every levy payer has been contacted through the consultation process. They’ve been provided opportunity to comment and to vote for or against the recommendations
of the review. The most significant recommendation is that a levy poll should only be held if a change to the levy is proposed.

“The response from levy payers including through the vote, which closed on Friday 27 November, provides a strong signal that dairy farmers believe the
industry should make the changes to the levy poll process.”

Once the changes are made, if farmers believe a poll is necessary, there is a failsafe mechanism for a group of levy payers representing at least 15 per
cent of levy votes to call a Dairy Australia general meeting and propose a resolution that a poll be held.

“Against the benchmark of a shareholder vote, the consultation and voter turnout for this review demonstrates significant engagement and support by levy
payers,” Mrs Jolliffe said.