2016 is proving to be a challenging year for dairy farmers. Australian Dairy Farmers (ADF) recently visited members in New South Wales, South Australia and Western Australia, and across the country farmers are confronted with low milk prices,
increased input costs, and dry weather conditions.
This continued volatility is a reminder of how dependent farming is on a lot of things which are outside our control.

Simone Jolliffe
ADF President

After 20 years of declining dairy cow fertility, the genetic trend has turned around and improved every year since 2011. It is now about 5% higher than
cows born in 2011, and similar to cows born in 1996.

This finding and others are reported in the latest Herd Improvement Report, published recently by the Australian Dairy Herd Improvement Scheme (ADHIS)
and the National Herd Improvement Association of Australia (NHIA).

The Australian Dairy Industry Council (ADIC) has acknowledged the revised country of origin labelling system,
announced by the Federal Government yesterday, as a positive move toward providing consumers with a clearer understanding of where their food comes
from.

ADIC Chair, Simone Jolliffe said the industry provided significant feedback to the proposed system to Government, some of which is reflected in the
announced laws.

“We are pleased to see the revised laws will allow for a minimum transition period of two years. This will ease implementation for manufacturers, allowing
stocks of existing labels to run out and help ensure that unreasonable regulatory costs are avoided,” Mrs Jolliffe said.

“It will also allow for the development of an education campaign to properly inform consumers about interpreting the new system, so that they can make
sound choices.”

The ADIC also expressed its appreciation for the opportunity to state the percentage of Australian product under the revised labelling system.

“The increased flexibility of the sliding scale system as well as the accompanying descriptions of Australian ingredient content on packaging is a positive
improvement.”

The ADIC looks forward to reviewing the full detail of the proposed changes to fully understand the impact on Australian dairy products and ensure implementation
of the system works for consumers, customers and the Australian dairy industry.

Australian Dairy Farmers’ (ADF) Policy Advisory Group (PAG) first round of meetings took place in March, identifying priorities for the election year with
in depth discussion about issues continuing to affect farmers’ productivity and profitability.

Markets, Trade and Value Chain PAG Chair, Adam Jenkins said the group has come back refreshed and invigorated about the next 12 months of work.

“2015 saw considerable progress in the Markets, Trade and Value Chain policy focus area, with the implementation of the China-Australia Free Trade
Agreement as well as developments in Competition policy which will foster a stronger business environment for farmers,” Mr Jenkins said.

“Yet the conditions are always volatile for dairy, and we must continue to find ways to build an even more competitive marketplace for farmers to ensure
they can be productive and profitable.”

To set the scene for the key policy issues ahead, Rabobank’s Michael Harvey presented the Markets PAG with the outlook for 2016-17. PAG Chair, Adam
Jenkins, said addressing technical barriers to trade will continue to be a focus of the Markets PAG this year.

On the natural resources front, the Natural Resource Management PAG discussed key issues for the year ahead. A focus of the meeting was the industry’s
climate change policy, with discussions at the meeting engaging both the Climate Change Authority and Minister for Environment, Greg Hunt’s office
respectively.

Water policy will also remain a major focus for 2016. PAG Chair, Daryl Hoey said 2016 is ‘crunch time’ for the Murray Darling Basin Plan.

“Despite the challenges it is faced with, the Murray Darling Basin is a region filled with opportunity for Australian dairy,” Mr Hoey said.

“We need the government to make sound, well-considered decisions to ensure the viability of dairy businesses in this region can continue long into
the future. This remains a top priority for the Natural Resources PAG for the year ahead.”
ADF has five policy focus areas, each with a dedicated PAG comprised of elected farmer members. These groups are led by a farmer appointed Chair, working
in collaboration with ADF policy officers to discuss priorities and strategic direction.

PAGs recommend policy settings to 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.
Stay tuned to the ADF Update for more information about ADF’s PAG meetings as they roll out over 2016.

After extensive lobbying against the proposed ‘backpacker tax’ and significant concern as to its effect on Australian agriculture, the Federal Government

has undertaken a review of the measure in consultation with affected stakeholders, including ADF.

ADF representatives joined industry partners including the National Farmers’ Federation at a consultation meeting in Sydney on 21 March.

ADF President, Simone Jolliffe said the meeting acknowledged deep concerns across the agriculture sector surrounding the impact of the tax on rural and
regional Australia.

“By undertaking this review of the tax the government has recognised our concerns that the backpacker tax could have an adverse effect on our industry’s
access to a secure and reliable alternative workforce,” Mrs Jolliffe said.

“We believe it is reasonable for backpackers to pay some tax, but the government’s 32.5c tax is too high and will deter backpackers from travelling to
Australia. We look forward to ongoing consultation with government to find a solution that ensures dairy farmers can operate productive and profitable
businesses.”

For further information on the proposed backpacker tax see here.

Dairy farmers know that providing a safe, nutritious product starts and ends with caring for cows and their calves. This includes providing them a healthy
diet, regular medical care and the right living conditions.

Part of keeping dairy cows and calves healthy involves separating calves from cows within their first 12 to 24 hours. This is to ensure the calves receive
adequate colostrum, are protected from illnesses, which can be spread by manure from adult cows for example.
Once removed from the cow, calves are raised under shelter with suitable bedding in a clean, safe and warm environment.
In cattle the placenta of the cow keeps the maternal blood supply separate from that of the unborn calf. This prevents the transfer of antibodies from
the cow to the calf before birth. For this reason, the calf is born with limited ability to fight disease.
By bringing the calves indoors, the farmer can make sure they receive at least two litres of colostrum at the first feed and another two litres within
the first 24 hours of life. This ensure the calf can build its immunity. Calves left to suckle are less likely to build up their immunity.
Individual care is the key to a healthy and content calf.
Although many dairy farmers would like to raise male calves on farm, there are currently very limited alternative markets to sell the male calves to. The
most common option for farmers, is to sell them as ‘bobby calves’ between 5 and 30 days of age. Another option is to rear the calves and sell them
as dairy-beef. This option requires significant investment by farmers with the need to provide additional housing, feed and labour.
Our industry is always searching for alternatives, including through sexed-semen to reduce the number of male calves born but this does mean we need to
have a market for the additional female calves. Further, we continue to explore market options for the sale of male calves.
Dairy farmers and the dairy industry understand that the practice of killing calves for the dairy-beef market is confronting. We take care of all animals
on-farm to the best of our ability and in line with best practice; no calf is ever treated as a low-value by-product. Once calves leave the farm, we
expect that they will be cared for and treated in a humane way.
The Australian dairy industry supports the draft Australian Animal Welfare Standards and Guidelines for Cattle as well as the Land Transport Standards and Guidelines.
These were developed in partnership with animal welfare groups and Government, and provide industry with clear animal health and welfare standards.
The dairy industry expects that all persons managing livestock abide by these standards and it is committed to working with farmers to ensure best practice
is observed on farm.
ADF, in collaboration with Dairy Australia, and other industry partners continues to work closely with transporters and the meat industry to ensure our
cows and calves are well looked after. We also continue to work with industry, Government and animal welfare groups such as the RSPCA to ensure the
wellbeing of our herds in all farming systems.
For further information on the Animal Health and Welfare Standards and Guidelines, click here. To view the publication, “Rearing Healthy Calves – How to raise calves that thrive”, click
here.

The Dairy Levy Poll process is set to be streamlined following the passing of legislation in March 2016 to alter review procedures while retaining
a strong democratic process for farmers.

The passage of the Bill provides certainty around the process for the 2017 levy review process and future reviews. Australian Dairy Farmers (ADF) has
welcomed the passage of the Bill, re-emphasising that this is not about removing Dairy Australia from scrutiny, but instead about streamlining
the process and making sure every levy dollar invested delivers value back to farmers.

ADF thanked the Minister for Agriculture and Water Resources, the Hon. Barnaby Joyce and the Department of Agriculture for championing the Bill on
behalf of dairy farmers, who voted to make the changes to the process in November 2015.

The changes mean that instead of a mandatory poll, every five years, an industry advisory committee will review whether there is a need to change the
levy or conduct a poll. If no change in the levy is recommended, there will not be a poll. However, a poll must be held if it is recommended there
be a change in the levy.

The changes also provide a mechanism to allow dairy farmers to request a poll with the support of at least 15 per cent of levy votes.

Now that the legislation is passed ADF will oversee the development of more in-depth procedures for the revised process.

For further information regarding the Dairy Levy Poll process review, visit www.dairylevypollreview.com.au

There is a rising demand worldwide for companies and industries to meet the needs of people today without compromising the ability of future generations
to meet their needs.

Australia’s dairy farmers and manufacturers are proud to be part of a global movement which aspires to meet this demand, whatever understanding people
have of sustainability.

One of the ways we demonstrate our whole-of-industry commitment to increasing prosperity for industry and communities, our care for people and animals,
and minimising our environmental footprint is through the Australian Dairy Industry Sustainability Framework.

Established in 2012 to help guide Australian improvement against 11 targets and 41 performance measures the Framework is lead by the Australian Dairy Industry
Council, managed by an industry Steering Committee, and supported by Dairy Australia.

Our 2015 Progress Report shows our improvement, but also our challenges. During 2015 there were several
areas of improvement including:

• The industry’s efforts in helping the Government to secure Free Trade Agreements with China, Japan and Korea, will help increase our competitiveness
  and profitability;

• The intensity of waste sent to landfill by manufacturers, which has dropped 46% since 2011, exceeding the target for 2020 several years ahead of schedule;

• The proportion of farmers with nutrient management plans, which at 58% is on-track to achieve the 2020 target of 80%, having almost doubled since 2013;
  and

• The reduction in the use of routine calving induction – 88% of farmers do not use it compared to 80% in 2014.

Although we made good progress against some targets, there are others where more progress is needed, such as increasing the proportion of dairy farmers
who are aware of, and implement, the recently agreed (January 2016) standards and guidelines for animal welfare. Currently, awareness stands at 56%
and our target for 2020 is 100%.

There are other areas where the industry’s performance has declined, such as the proportion of people who recognise dairy as a quality product, which slipped
to 69% from a baseline of 72% (the 2020 target is 80%).

To ensure our industry remains current, relevant and accountable in the context of changing global and domestic conditions and expectations, a review of
all the targets, indicators and performance measures in the Framework will be undertaken during 2016.

The review will take into consideration a broad range of emerging issues, stakeholder views, industry priorities, political agendas and global trends.

The ADIC is excited to share our progress thus far – it demonstrates just how powerful dairy can be when the whole supply chain works together toward its
common goals.

We encourage you to take the time to have a look at the key areas that interest you in the online report and look forward to hearing your thoughts.

A snapshot of the Australia dairy industry and our sustainability progress…

Looking for a way to build your leadership capabilities in preparation for further involvement with the industry, and your community? The Emerging Dairy Leaders Program (EDLP) could be the perfect opportunity for you.

The recently announced EDLP provides an outstanding opportunity for potential and current leaders across the sector to build their leadership skills and
capacity to contribute to development of the Australian dairy community.
Australian Dairy Farmers and Dairy Australia have established the program to invest in the development of the industry’s people by further expanding on
existing leadership programs available. 

The program will run over the course of a year, commencing April 26 and concluding April 2017 in Adelaide. The aim of the EDLP is to help emerging leaders
to better understand themselves and others and therefore how to improve their communication skills and teamwork.
The program will feature a variety of learning and networking opportunities—including exposure to leaders and experts as well as challenging assignments.
This provides a rich development experience with long-lasting practical outcomes for participants and the community.
Participants in the program will earn a Diploma of Agribusiness Management from the National Centre for Dairy Education/TAFESA using a variety of learning
tools such as online self-paced study, webinars, peer discussion, workplace and mentor discussions. The EDLP participants will also be eligible to
take part in the Developing Dairy Leaders Program afterward if interested.

All costs associated with education enrollment, travel, accommodation and meals while away from home will be covered by the program.
To apply or for further information head to the People in Dairy website or contract Program Coordinator,
Karen Conrad via 0488 099 891. Applications open on Thursday 10 March 2016 and close on Monday 28 March 2016. 

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.