Opening milk price announcements made this week by Murray Goulburn and Fonterra have
once again, reinforced the need for improved transparency in the way milk pricing is structured and communicated in Australia.

Not only are the announcements much too late for farmers to properly budget and plan around, but many questions have to be asked to understand them. Add
to the already complex system a loan repayment and the forecast opening price is far from what it first appears.

Both Murray Goulburn and Fonterra’s recent announcements are confusing and difficult to understand – they lack clarity and transparency.

Improving the transparency of the milk pricing system is important, and Australian Dairy Farmers (ADF) continues to work with our state members to this
end. It is essential that processors come to the table and discuss this as a collective, to help protect the future of our sector.

No one can dispute that the current market situation for dairy farmers, whether you are a supplier to the export or domestic market, is rough. Even the
best placed businesses will be making difficult decisions.

While we cannot change the milk price, ADF is working hard with our state members to improve the transparency in the milk pricing system and simplify milk
contracts. We are also fighting for farmers to better manage the risk throughout the supply chain so that they do not always bear the financial risk.

This weekend Australia takes to the polls and by next week the successful party will be moving into Parliament. ADF and our state members will be back
in Canberra as soon as the elected party is announced to keep the pressure on.

As an industry dairy has supported its own and will continue to do so. We’ve never asked for a bail out but rather for targeted assistance that will help
get our industry over the current hurdle and better balance risk throughout the supply chain going forward. We need structural change that improves
fairness and brings more balance into the market – competition law can be improved more.

ADF acknowledges the Dairy Recovery Concessional Loans are now available in SA, TAS and Victoria. We welcome this support, and will continue to advocate
that all affected dairy workers are eligible for this assistance.

I encourage all farmers to keep talking to ADF, your state representatives and RDPs. It’s tough for everyone out there right now, and the season ahead
will be challenging. This will go beyond the farm gate, with our service providers and communities likely to feel the pinch too – keep this in mind
and let’s all look out for one another.

David Basham 

Acting ADF President

Australian Dairy Farmers’ (ADF) first priority in recent months has been
to secure support for our industry led initiatives, and targeted assistance from Federal and State Government to help see farmers through the short
term cash flow crisis. It is frustrating that this has created the expectation of immediate relief yet some farmers are not eligible. We continue to
lobby strong on farmers’ behalf to secure access for all affected farmers to Dairy Recovery Loans, now available in Victoria and Tasmania. We expect
criteria to be released imminently in South Australia and New South Wales.

Many farmers have been calling the ADF and state dairy farming offices to discuss these assistance mechanisms, and highlight accessibility issues. We encourage
all concerned farmers to keep these communication channels flowing as it is vital for ADF to know which issues to target.

As an industry, we are going beyond these short term measures to create stability for our industry’s long term future. Central to this is finding new ways
to manage price volatility for farmers.

ADF in collaboration with our state members has long advocated the need for competition policy reform that addresses the unequal balance of market power
in the supply chain with not only a Mandatory Code of Conduct to control said power, but also a Supermarket Ombudsman to effectively regulate the code.
We have made important in roads in the last two years, but there is still work to be done.

Ideas developed through the Markets, Trade and Value Chain meeting last week are being progressed and work with the Australian Competition and Consumer
Commission is gaining traction.

All three major political parties have come to the table to discuss potential solutions over recent weeks, and this is to be commended. It is essential
that this movement does not stop at political rhetoric, but rather translate to real and tangible changes for our industry.

Ensuring issues that affect our entire sector’s ongoing productivity and competitiveness are on the Federal political agenda remains equally important
during these tough times.

In particular, ADF continues to seek commitments from all political parties to support dairy’s access to secure, affordable water resources. While recent
rainfall has been a welcome reprieve for many regions the long term outlook for water allocations remains bleak. ADF continues to push for vital changes
to the Murray Darling Basin Plan and environmental water trading to make certain enough water is available when farmers need it and at an affordable
price.

Funding for dedicated agricultural health services and resources is urgently required to safeguard the wellbeing of our workforce. Federal Government should
make ongoing commitments to vital resources including the National Centre for Farmer Health to match that of State Government.

We continue to work closely with the National Farmers Federation to accelerate agriculture by addressing key workforce issues including the scrapping of
the backpacker tax, as well as supporting industry’s efforts to reduce carbon emissions intensity.

Ensuring these priority areas are addressed in the upcoming election will enable our industry to take control of its own destiny, and develop a stronger,
more prosperous and sustainable future.

Australian dairy farmers know we’re not immune to significant market forces such as the slowdown in the Chinese economy, or the Russian ban on importing
product. But the low prices announced recently will be below the cost of production for many farmers. While some have faced such volatility before
their current situation is no doubt compounded by the unprecedented challenges driven by processor decisions in the 2015-16 financial year.

ADF continues to work with all our state members – QDO, NSWFarmers, SADA, TFGA, UDV and WAFarmers as well as industry partners to hold State
and Federal Government to their promises of support, and to drive real, meaningful change throughout the supply chain for the betterment of our industry.
Together we are stronger than we will ever be divided – and united we will support farmers through the challenges they currently face.

David Basham

Acting ADF President

Australian Dairy Farmers’ (ADF) first priority in recent months has been
to secure support for our industry led initiatives, and targeted assistance from Federal and State Government to help see farmers through the short
term cash flow crisis. It is frustrating that this has created the expectation of immediate relief yet some farmers are not eligible. We continue to
lobby strong on farmers’ behalf to secure access for all affected farmers to Dairy Recovery Loans, now available in Victoria and Tasmania. We expect
criteria to be released imminently in South Australia and New South Wales.

Many farmers have been calling the ADF and state dairy farming offices to discuss these assistance mechanisms, and highlight accessibility issues. We encourage
all concerned farmers to keep these communication channels flowing as it is vital for ADF to know which issues to target.

As an industry, we are going beyond these short term measures to create stability for our industry’s long term future. Central to this is finding new ways
to manage price volatility for farmers.

ADF in collaboration with our state members has long advocated the need for competition policy reform that addresses the unequal balance of market power
in the supply chain with not only a Mandatory Code of Conduct to control said power, but also a Supermarket Ombudsman to effectively regulate the code.
We have made important in roads in the last two years, but there is still work to be done.

Ideas developed through the Markets, Trade and Value Chain meeting last week are being progressed and work with the Australian Competition and Consumer
Commission is gaining traction.

All three major political parties have come to the table to discuss potential solutions over recent weeks, and this is to be commended. It is essential
that this movement does not stop at political rhetoric, but rather translate to real and tangible changes for our industry.

Ensuring issues that affect our entire sector’s ongoing productivity and competitiveness are on the Federal political agenda remains equally important
during these tough times.

In particular, ADF continues to seek commitments from all political parties to support dairy’s access to secure, affordable water resources. While recent
rainfall has been a welcome reprieve for many regions the long term outlook for water allocations remains bleak. ADF continues to push for vital changes
to the Murray Darling Basin Plan and environmental water trading to make certain enough water is available when farmers need it and at an affordable
price.

Funding for dedicated agricultural health services and resources is urgently required to safeguard the wellbeing of our workforce. Federal Government should
make ongoing commitments to vital resources including the National Centre for Farmer Health to match that of State Government.

We continue to work closely with the National Farmers Federation to accelerate agriculture by addressing key workforce issues including the scrapping of
the backpacker tax, as well as supporting industry’s efforts to reduce carbon emissions intensity.

Ensuring these priority areas are addressed in the upcoming election will enable our industry to take control of its own destiny, and develop a stronger,
more prosperous and sustainable future.

Australian dairy farmers know we’re not immune to significant market forces such as the slowdown in the Chinese economy, or the Russian ban on importing
product. But the low prices announced recently will be below the cost of production for many farmers. While some have faced such volatility before
their current situation is no doubt compounded by the unprecedented challenges driven by processor decisions in the 2015-16 financial year.

ADF continues to work with all our state members – QDO, NSWFarmers, SADA, TFGA, UDV and WAFarmers as well as industry partners to hold State
and Federal Government to their promises of support, and to drive real, meaningful change throughout the supply chain for the betterment of our industry.
Together we are stronger than we will ever be divided – and united we will support farmers through the challenges they currently face.

David Basham

Acting ADF President

The first priority over the last few weeks has been to secure targeted assistance and roll
out support to help farmers with their most pressing needs.

At the same time, we remain focused on the big picture – especially when it comes to water. It won’t be enough to help farmers get over this hurdle if
their businesses later fall over because water is too scarce and expensive to stay milking in seasons to come.

We can’t control the weather. The recent rains are a welcome reprieve, but to make a substantial difference to the bleak outlook on water allocations for
next season it will need to keep raining heavily in the catchments over the next few months..

So while we watch the skies, our priority remains achieving long-term objectives on what can be controlled. Environmental water trading, the Murray Darling
Basin Plan and the Connections reset all have an important bearing on whether enough water will be available when farmers need it and at a price they
can afford in 2016/17 and beyond.

We are advocating for State and Federal Government commitments to assist our industry by making more water available next season. Potential untapped sources
include trade in northern Victorian allocations to urban centres such as Melbourne, as well as a share of the environmental water held in Victorian
and Commonwealth accounts.

The amendments to the Federal Water Act last month mean that the Commonwealth Environmental Water Holder (CEWH) now has more flexibility to trade water
it may not need. As of 31 March, the CEWH still had just over 300 GL in storage; while it has no plans to trade in 2016-17 at this stage, this may
change as part of environmental planning now underway.

We also remain focused on the Connections reset. The announcement that only $388 million is left to deliver more than 100 GL savings was unwelcome news
at a time when farmers already have so much on their plates. Now more than ever, we must get this reset right to provide sustainable infrastructure
for a resilient dairy industry.

Once the election is over, we will be back in Canberra to keep the pressure on the elected party to achieve the Murray Darling Basin Plan’s environmental
outcomes without removing any more water from irrigated agriculture.

State and Commonwealth Governments have an in-principle agreement to deliver the full 650GL in environmental offsets, and undertake more robust socio-economic
assessment before any attempt to achieve more than the 2750 GL target. We are holding them to all of these commitments.

ADF has welcomed back well respected former CEO, John McQueen in an interim role after
the departure of Benjamin Stapley, who resigned last week.

As CEO for over 20 years, Mr McQueen stepped down in 2007 – however dairy was never far from his thoughts as a senior agriculture advisor to past Prime
Ministers Kevin Rudd and Julia Gillard and recently in his independent consultancy.

Prior to his time at the helm of ADF, John held the position of CEO at the Australian Dairy Herd Improvement Scheme (ADHIS). John also spent time working
with ABC-TV’s Science Unit, producing, researching and directing programs such as the first three series of Towards 2000.

Mr McQueen’s significant policy expertise, strong industry relationships and political connections are a very welcome addition to the team at ADF, which
is working hard to support farmers through a period of unprecedented challenges.

Outcomes-focused, non-prescriptive is a mantra that John is proud of and will continue to be part his approach in his return to ADF.

Representatives from Australian Dairy Farmers (ADF) embarked on a series of national roadshows beginning in Tasmania on 4 May, in partnership with state
dairy farming members.

Comprised of a series of farmer focused forums across the course of 2016, the roadshow offers farmers the opportunity to engage with national and state
dairy member representatives on the issues most important to them and their region.

The roadshow is also an opportunity to get up to speed on progress and developments which have occurred over the past year, as well as talking through
the industry’s election priorities for 2016.

ADF Senior Policy Manager, David Losberg said the regional forums would provide farmers with the opportunity to discuss the issues of critical importance
to their region.

“Our industry is experiencing unprecedented challenges at present and we want our members and the public to engage with us, and ensure their interests
are effectively represented. Our aim for these forums is to help provide clarity on the policy support mechanisms secured on farmers’ behalf and facilitate
opportunities to make recommendations for future improvements.”

“Now more than ever it’s important that our farmers know who is representing their interests, and that we are tirelessly working on your behalf with minimal
resources to gain the results farmers need to be successful in businesses and provide succession opportunities.”

Since May, ADF has visited dairy regions in Tasmania, New South Wales and Queensland. Queensland Dairyfarmers Organisation President, Brian Tessmann said
the forums were a valuable opportunity for members to air their thoughts and express their needs to the people who represent them.

“The ADF Roadshows are always useful and insightful for our Queensland farmer members. The most recent events in Warwick and Maleny were extremely timely
and helpful for our members who had a number of national industry questions given the situation down south.”

“It is important that we continue to work closely with ADF to continue getting results for our members at a national level and events such as these ensure
that ADF have the opportunity to hear directly from Queensland farmers.”

The next roadshow forum takes place in Western Australia on 26 July. For more information on the roadshow schedule or any other details please contact
Shona McPherson, ADF Media Officer via media@australiandairyfarmers.com.au or mobile 0447
293 844.

Representatives from ADF and QDO speak with farmers at the Maleny Dairy event in June. 

Dairy farmer representatives on the ADF Markets, Trade and Value Chain Policy Advisory
Group (PAG) gathered in Melbourne this week to discuss a range of measures to establish a fairer, more transparent dairy market.

Simplifying supplier contracts and agreements featured heavily and methods to make them simpler and more transparent. Further to this the lack of transparency
regarding milk pricing, and its ability to be retrospective is unacceptable and must be addressed.

The PAG also reviewed the methods to give clear, independent and credible market and price signals to dairy farmers and how this might be practically applied
to the Australian dairy market.

Providing farmers with the right tools and resources to manage the opportunities and risks associated with a fluctuating dairy market was also a focus
to help bolster the industry’s resilience in the long term.

Significantly, the meeting agreed upon the need to modernise the Australian industry’s pricing structures and contracts to recognise the complex operating
environment that farmers face, to better balance financial risk along the supply chain. ADF is working with all state members, levels of Government
and industry to achieve these endeavours.

ADF continues to press for the release of the full dairy support package as soon as possible and will update farmers as soon as this information is released.

We have had a couple of operational changes at ADF in recent weeks, with the resignation of ADF CEO Benjamin Stapley announced yesterday. The ADF Board
has already taken steps to ensure that the role of CEO is well served in both the short and long term.

Contact has already been made with former ADF CEO John McQueen, now an industry consultant, to step into this important leadership role on an interim basis
while the recruitment process is completed. Mr McQueen steps into the role as early as Monday morning and there will be a smooth, effective transition
so no time is lost in fulfilling ADF’s mission to lobby for a stronger future for Australian dairy farmers.

These are unprecedented times and we need to ensure we have the right leadership balance to effectively address these issues, while not losing sight of
other priorities important to building farmers long term sustainability.

The small team at ADF, remains committed to driving strong policy to transform the way our industry operates for the better.

Many farmers have been calling our offices in recent weeks seeking advice, assistance and information on what ADF is doing on their behalf. We encourage
you to keep connecting with ADF to ensure we effectively represent your interests.

David Basham

Acting ADF President

Keeping Australian dairy in business for the long term. This was the catch-phrase
of the Australian Dairy Industry Sustainability Framework when it was first endorsed by the Australian Dairy Industry Council (ADIC) in 2012.

This long term thinking is especially relevant today, says the Chair of the Framework’s Steering Committee, Chris Griffin, a Gippsland dairy farmer.

“The Australian dairy industry is facing unprecedented challenges, yet securing our industry’s triple bottom line approach to sustainability remains as important as ever,” Chris says.

“Although the industry’s immediate priority is to support dairy farmers through the recent step downs, the Framework helps us keep an eye on the horizon.
Importantly it tracks our progress and drives practice change where necessary to ensure the industry is sustainable for the long term.”

In June, the ADIC was recognised for its sustainability framework by the United Nations Association of Australia (UNAA) with its 2016 Organisation Leadership Award.

Judges said that the Framework was “exceptional and inspiring, particularly its whole-of-supply-chain focus; rigorous targets and reporting; impacts to
date; stakeholder and community involvement; and communication”. They also recognised the Framework’s potential to act as a model for other whole-of-industry
approaches for an even broader impact.

Further acknowledgement of the value of the Framework and support for dairy farmers’ commitment to sustainable production comes from Ian McConnell at WWF
Australia, a member of a stakeholder reference group for the project, the Dairy Sustainability Consultative Forum.

“The value of the Framework is helping the dairy industry to know where the pressure points are coming from,” says Ian.

“By being in front of the issues, the industry can better shape its response. And when issues do emerge, such as pricing or producer profitability, it
can be in more control and shape the conversation.

“It’s not just about the milk. The Framework helps Australian dairy to tell the wider story about the industry and its producers.”

Whenever a dairy farmer takes steps to improve their business or their practices, or reduces their environmental impact, they are contributing to the industry’s
progress on sustainability under the Framework,” says Chris.

“The challenge is to make sure we are focussed on targets that will deliver the best outcomes for the industry, the community and the environment.”

For more information, visit www.dairysustainabilityoz.com.au

The 2016 Feeding the Genes study, conducted by Dr John Morton, for ADHIS, investigated interactions between sire genetics and feeding systems on:

• milk solids production;
• and the cow’s chance of lasting in the herd.

The milk production results were clear. The study found that in all feeding systems, the daughters of high index (BPI, HWI or TWI) sires produce more milk
solids than daughters of low index sires.

In terms of survival, the daughters of high index (BPI, HWI and TWI) sires last longer than daughters of low index sires in all pasture-based feeding systems.
The scale of effects of sire index vary by index and feeding system:

The HWI has larger effects on longevity than BPI or TWI.

In low bail feeding systems the daughters of high BPI and HWI sires last longer than daughters of low index sires.

In moderate to high bail feeding, partial mixed ration (PMR) and hybrid feeding systems, the daughters of high index (BPI, HWI and TWI) sires last longer.

In total mixed ration (TMR) systems the daughters of high HWI sires last longer.

The findings support the take-home message that herd managers should select high index sires whose ABVs are aligned with the breeding objectives for their
herd, regardless of their feeding system.

Read more about the results of this exciting research in this factsheet or contact Michelle Axford on 0427 573 330 or maxford@adhis.com.au for more information.

Many in the dairy industry feel under enormous pressure at the moment. Farmers not
only have the challenge of adapting their business plans to recent price shocks – we also pick up the paper to read about it every day. With more processors’
opening milk prices due in coming weeks, following Warrnambool Cheese and Butter’s (WCB) announcement today, no doubt some will feel the pressure begin
to mount once more.

We recognise that the announcement from WCB will come as a shock to many, given it is well below the cost of production. Despite the disappointing low
price, we must recognise that they have heeded calls for early price signals and provided much needed certainty to their suppliers.

While we are an industry under pressure, we are also an industry that has the know-how and motivation to overcome these adversities and thrive in the long
term. No one is alone in this scenario and we need to ensure that all farmers feel supported during tough times.

ADF, together with our state members and Dairy Australia is fighting for our farmers. We can’t solve all of the issues farmers are currently facing, but
we can work to relieve some of the immediate pressures and accelerate change to ensure this doesn’t happen again.

We have welcomed the promises made by State and Federal Government, now they must stop playing politics and deliver. Farmers need certainty as to their
options right now.

While we await Government decisions, there are industry resources available to help farmers manage the impact of recent events. It’s important to make
the time to take up these opportunities. Dairy Australia’s Taking Stock provides free one-to-one
business analysis that can help you prepare for the season ahead.

The Dairy Farmer Central website launched this week by the Victorian dairy industry, lists all of these
tools and more. It also signposts events – some of these events will inform and help you plan for the season ahead, others provide an opportunity to
take time out from the farm and get some perspective. We are working to make this website applicable Australia-wide.

These tools are not a silver bullet to restore our businesses but they will help navigate the challenges, so we can move toward a stronger, fairer and
more sustainable future.

David Basham

ADF Acting President

Since heavy rains and wild winds hit the south east cost on 5 June, flooding has significantly affected dairying regions in Queensland, New South Wales
and Tasmania. These floods have added further issues to the industry which is already dealing with significant strain and instability.

The Australian dairy industry has mobilised quickly to provide farmers with support. 48 hours on from the damaging events, recovery assistance is the primary
focus. We are working to understand the full impact of the floods to ensure targeted assistance for farmers. 
We are working to ensure farmers have adequate access to clean water and power to enable them to keep milking. Farmers are working to protect and
care for their animals during these extreme events. Unfortunately, there have been reports of cows being lost to the floods and we empathise with farmers
having to face this difficult situation.
Fencing is also an immediate concern, with the high water speed having destroyed many farm fences, as well as loss of pasture and newly sown crops. 
Please see below for information on seeking flood recovery assistance, further updates will be made as the information is made available: 
If my property has been affected, what should I be doing?

• Try to focus on your priorities by writing a quick checklist of all the jobs that come to mind – classifying them by what needs to be done today, this
  week and later in the month. Download your Dairy Australia ‘recovery priority list’ here.
• Take photos of the damage on your property to build up an inventory of losses (i.e. pumps, fencing, feed, etc).
• Keep records of damage on your property until Helplines become available. Accurate and timely information will help the relevant departments secure
  the best possible level of disaster assistance.
• Keep all your receipts associated with recovery efforts.
• Remember to ask for help. 

What other support is there to assist me?

• Find out about the options for milking without electricity supply here. 
• Find out how to manage the health and welfare of cows during floods here.

The industry has bid farewell to dedicated
dairy advocate, Max Jelbart who sadly passed away in June.

Mr Jelbart, who farmed successfully in Gippsland and Caldermade, was an admired intellectual who shared his time and knowledge freely.

During his career in dairy, Max served on various industry boards and committees and was a supplier of Murray Goulburn for 38 years – and a director
since 2012.
A Director on the ADF Board for seven years and a past President of the United Dairyfarmers of Victoria’s South Gippsland Branch, Mr Jelbart was this
year presented with an Order of Australia medal for his services to the dairy industry and the community.
A Nuffield Farming Scholar and member of the Nuffield Australia Investment Committee, Mr Jelbart was renowned for seeking out new ways to develop his
capacity as a farmer as well as opportunities to give back.
“Max was extremely passionate about helping to foster the next generation in dairy, and ensuring they had the right tools to grow their businesses,”
ADF President, David Basham said.
“His readiness to share his expertise with industry and the community alike was inspirational – he was a tireless advocate and will continue to be
remembered very fondly.”
On behalf of staff and representative leaders past and present, ADF expressed its deepest sympathies to Mr Jelbart’s family.