YEAR in REVIEW 2016–2017 Alberta Milk Year in Review 2016–17 5555 on the ROAD DAY EVERY Worth of Milk

YEAR IN REVIEW 2016–2017 2016-17 At a Glance 99% of our Farmers 520 MET OR EXCEEDED DAIRY FARMS milk quality standards of Canadian 8.46% milk p oduction A record of 740,710,762 LITRES PRODUCED Up to ON THE ROAD 63 MILK TRUCKS EVERY DAY 103,000+ $77,175 in Review 2016–17 Alberta Milk Year milk samples worth of milk WERE TESTED 22 schools DONATED TO celebrated 30 years those in need in Alberta ON CLUB MOO 5 Table of Contents 8 CHAIRMAN’S MESSAGE Our Mission 10 GENERAL MANAGER’S REPORT PRODUCER GOVERNANCE Alberta Milk leads Alberta's 12 Review and Appeals ...................................... /12 Board of Directors ......................................... /13 dairy industry. We support Producer governance chart ........................... /13 Committees ................................................... /14 the effective operation and Human Resources .......................................... /15 advocacy of the supply MILK PRODUCTION management system in a 16 Production overview ...................................... /16 Total Production Quota and Underproduction vibrant, sustainable and Credits ........................................................... /16 Incentive Days ............................................... /17 market-focused industry. Equalization Statistics by Class ...................... /17 New Entrant Assistance Program .................. /18 Milk Production and Payment Statistics/ Our Vision Information .................................................... /18 19 CANADIAN MILK SUPPLY ............ /21 Growing a vital, sustainable, MILK QUALITY 20 Parameters ..................................................... /20 and prosperous dairy Top Ten Farms ............................................... /20 Somatic Cell Count ........................................ /21 industry. Milk Measurement ......................................... /21 Celebrating Excellence .................................. /21 Milk Sampling ................................................ /21 TRANSPORTATION 22 Transportation Overview ............................... /22 Transportation Advisory Committee.............. /23 WESTERN MILK POOL 24 Western Milk Pool Overview ......................... /24 ANIMAL CARE 25 Lameness Reduction Strategy ....................... /25 Alberta Milk Year in Review 2016–17 Alberta Milk Year Emergency Preparedness .............................. /25 Johne's Disease Initiative .............................. /25 Alberta Farm Animal Care ............................. /25 6 PROACTION CONSUMER OUTREACH 26 Pilot Project ................................................... /26 38 Local Consumer Sponsorships ...................... /38 Food Safety Module ...................................... /26 Alberta School Athletic Association .............. /38 Animal Care Module ..................................... /26 Club Moo ...................................................... /38 Livestock Traceability Module ....................... /26 Merchandise and Incentives .......................... /38 Mock Validations ........................................... /27 Biosecurity Module ........................................ /27 MILK WEST WRAP-UP Environment Module ..................................... /27 39 Milk Mooves You Promotion .......................... /39 Milk Rewards ................................................. /39 DAIRY RESEARCH Chocolate Milk .............................................. /39 28 Research Overview ........................................ /28 Youth Campaign ............................................ /39 Lakeland College Dairy Centre ..................... /28 Milk West Sponsorships................................. /39 FARM SAFETY DFC MARKETING 29 Agsafe Alberta Society .................................. /29 40 Fluid Milk Marketing ...................................... /40 Chocolate Milk .............................................. /40 ENVIRONMENT Masterbrand .................................................. /41 Cheese .......................................................... /41 30 Intensive Livestock Working Group ............... /30 Arai - Environment Partnership of Alberta ..... /31 DFC NUTRITION PRODUCER ENGAGEMENT 42 Educator Programs ........................................ /42 Health Professional Programs ........................ /43 32 AGM and Dairy Conference .......................... /32 Digital Activities ............................................. /43 Producer Meetings ........................................ /32 Dairy Industry Achievement Award ............... /33 COMMUNICATIONS Recognition of Service Award ....................... /33 Members Only Website ................................. /34 44 Press Releases ............................................... /44 Document Sharing Site .................................. /34 Website ......................................................... /44 Sponsorship ................................................... /34 Social Media .................................................. /44 Future Leaders Development Conference .... /34 Dairy Farmers of Canada AGM ..................... /34 GOVERNMENT RELATIONS Provincial ....................................................... /45 ALBERTA MILK SCHOLARSHIP 45 National ......................................................... /45 35 Recipients ...................................................... /35 International .................................................. /45 Alberta Milk Year in Review 2016–17 Alberta Milk Year AGRICULTURE EDUCATION PREPARING FOR THE FUTURE 36 Events ............................................................ /36 46 Strategic Procedures ..................................... /46 Classroom Agriculture Program .................... /36 Risk Prevention .............................................. /46 Ask a Dairy Farmer ........................................ /37 A Seat at our Table ........................................ /37 MANAGEMENT DISCUSSION AND Dinner Starts Here ......................................... /37 ANALYSIS 47 How Are We Ensuring Accurate Financials .... /47 7 Tom Kootstra Chairman’s Message I first want to express my appreciation to the With sustained consumer preferences for natural delegates and directors who elected me to dairy products such as butter, cream, yogurt return to the Board of Directors and as chairman. and cheese, we continued to enjoy a growing I am proud to once again serve the industry market. In Alberta, there was a seven per cent and represent Alberta Milk. The 2016-17 year quota increase and producers also had the was described as a year in transition for a lot opportunity to capitalize on 25 incentive days. of reasons. Our organization and industry Our total milk production for the year was 740.7 continued to evolve and adapt to our changing million litres compared to 725.0 million litres environment and it’s necessary that we progress last year. The growth has been both a welcome along with it to continue to pursue and achieve and a challenge as we work to produce the milk our goals. required to meet the market demand. Both production and processing facilities are reaching their capacity and in turn, investments on farms and by processors are being planned. Following the ratification of the Canada- European Union Comprehensive Economic Trade Agreement (CETA), the federal government announced the CETA Transition Program for Dairy. The program has two elements, the Dairy Farm Investment Program and the Dairy Processing Investment Program. Both programs were extremely welcome in an effort to help Canadian dairy farmers and the processing sector improve efficiency and productivity, as well as diversify their products to pursue new market opportunities. To the many naysayers – namely in the media or economic institutions – that say supply management does not work, that it is not progressive and needs to be abolished, I say they have just not taken the time to really understand our industry. The innovation and the progressive changes that were implemented this year are far reaching and long lasting. For example, as of February 1, 2017, the agreement reached with processors on how to better utilize all components of milk was implemented. This change introduced a new class for ingredients Alberta Milk Year in Review 2016–17 Alberta Milk Year and changes the long standing structural surplus removal programs administered by the Canadian 8 Dairy Commission. These are impressive the opposite direction when they announced accomplishments that will provide stability in they were withdrawing their funds from DFC our industry for years to come. And they build for these very programs. We however remain on the progress we’ve made since supply committed to support the newly developed DFC management was introduced 50 years ago. master brand for dairy product promotion and marketing. Our strategic priority of advocating for our industry, supply management, and building The call for a North American Free Trade consumer trust remains paramount for our Agreement (NAFTA) review initiated by the organization. Alberta Milk, in partnership with United States has caused considerable pressure the poultry industry, has actively pursued our on our industry. We feel that the changes government relations strategies. All targets needed in other areas of NAFTA can be have been met including hosting a reception achieved without having any negative impacts with 39 MLAs where we were able to showcase on us. We are very encouraged with the level of our industries and

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