YEAR IN REVIEW 2016–2017 Alberta Milk Year in Review 2016–17 5555 ON THE ROAD DAY EVERY worth of milk

DONATED TO DONATED those in need in Alberta $77,175 of our Farmers MET OR EXCEEDED milk quality standards 99% oduction At a Glance At of Canadian milk p 22 schools years celebrated 30 ON CLUB MOO

A record of 740,710,762 LITRES PRODUCED

2016-17 63 MILK TRUCKS 520

milk samples % 8.46 Up to Up WERE TESTED DAIRY FARMS DAIRY 103,000+ 6 Alberta Milk Year in Review 2016–17 Our Vision market-focused industry. vibrant, sustainableand management systemina advocacy ofthesupply the effective operationand dairy industry. We support Alberta MilkleadsAlberta's Our Mission industry. and prosperous dairy Growing avital,sustainable, Contents Table of 24 19 16 22 12 10 25 20 8 Human Resources ...... Committees ...... Producer chart governance ...... Board ofDirectors ...... Review andAppeals ...... PRODUCER GOVERNANCE GENERAL MANAGER’SREPORT CHAIRMAN’S MESSAGE Alberta Farm Animal CareAlberta Farm ...... Johne's DiseaseInitiative ...... Emergency Preparedness ...... Lameness ReductionStrategy ...... ANIMAL CARE Western MilkPoolOverview ...... WESTERN MILKPOOL Transportation Advisory Committee...... Transportation Overview ...... TRANSPORTATION Milk Sampling ...... Celebrating Excellence Milk Measurement ...... Somatic CellCount Top Ten Farms ...... Parameters MILK QUALITY CANADIAN MILKSUPPLY ...... Information Milk Production andPaymentStatistics/ New EntrantAssistanceProgram ...... Equalization StatisticsbyClass ...... Incentive Days ...... Credits ...... Total Production QuotaandUnderproduction Production overview ...... MILK PRODUCTION ...... /21 /25 /25 /25 /25 /24 /23 /22 /21 /21 /21 /21 /20 /20 /18 /18 /17 /17 /16 /16 /15 /14 /13 /13 /12 Alberta Milk Year in Review 2016–17 7 /44 /44 /44 /45 /45 /45 /46 /46 /47 /38 /38 /38 /38 /39 /39 /39 /39 /39 /40 /40 /41 /41 /42 /43 /43 ...... Strategic Procedures ...... Strategic Procedures ...... Risk Prevention MANAGEMENT DISCUSSION AND ANALYSIS Ensuring Accurate Financials We How Are Milk West Sponsorships...... Milk West DFC MARKETING ...... Fluid Milk Marketing ...... Chocolate Milk Masterbrand ...... Cheese ...... DFC NUTRITION ...... Educator Programs ...... Programs Health Professional Digital Activities COMMUNICATIONS ...... Releases Press ...... Website ...... Social Media GOVERNMENT RELATIONS ...... Provincial National ...... International ...... FOR THE FUTURE PREPARING CONSUMER OUTREACH ...... Local Consumer Sponsorships ...... Association Alberta School Athletic ...... Club Moo ...... and Incentives Merchandise MILK WEST WRAP-UP Promotion Milk Mooves You ...... Milk Rewards ...... Chocolate Milk ...... Campaign Youth 42 38 39 40 44 46 47 45 /36 /36 /37 /37 /37 /28 /29 /30 /31 /32 /32 /33 /33 /34 /34 /34 /34 /34 /35 /26 /26 /26 /26 /27 /27 /27 /28 ...... Dinner Starts Here ...... Dinner Starts Here Recipients ...... EDUCATION AGRICULTURE Events ...... Program Agriculture Classroom ...... Ask a Dairy Farmer ...... A Seat at our Table Document Sharing Site Sponsorship ...... Leaders Development Conference Future ...... Dairy Farmers of Canada AGM MILK SCHOLARSHIP ALBERTA PRODUCER ENGAGEMENT ...... AGM and Dairy Conference ...... Meetings Producer ...... Dairy Industry Achievement Award ...... Recognition of Service Award Members Only Website Agsafe Alberta Society ...... Agsafe Alberta Society ENVIRONMENT ...... Group Intensive Livestock Working Partnership of Alberta Arai - Environment DAIRY RESEARCH DAIRY ...... Overview Research ...... Lakeland College Dairy Centre SAFETY FARM Pilot Project ...... Pilot Project ...... Food Safety Module ...... Module Animal Care ...... Module Livestock Traceability ...... Mock Validations Biosecurity Module ...... Module Environment PROACTION 36 30 32 29 28 35 26 8 Alberta Milk Year in Review 2016–17 our goals. along withittocontinuepursueandachieve environment andit’s necessarythatweprogress continued toevolveandadaptourchanging of reasons. Ourorganization andindustry was describedasayearintransitionforlot and represent AlbertaMilk.The2016-17year I amproud toonceagainservetheindustry return totheBoard ofDirectors andaschairman. delegates anddirectors whoelectedmeto I firstwanttoexpress myappreciation tothe Chairman’s Message Tom Kootstra removal programs administered bythe Canadian and changesthelongstanding structuralsurplus change introduced anewclassforingredients all componentsofmilkwas implemented.This reached withprocessors onhowtobetterutilize example, asofFebruary1, 2017,theagreement this yearare farreaching andlonglasting.For progressive changesthatwere implemented understand ourindustry. Theinnovationandthe they havejustnottakenthetimetoreally progressive andneedstobeabolished,Isay management doesnotwork,thatitis or economicinstitutions–thatsaysupply To themanynaysayers–namelyinmedia pursue newmarketopportunities. productivity, aswelldiversifytheirproducts to the processing sectorimprove efficiency and an effort and tohelpCanadiandairyfarmers Both programs were extremely welcomein and theDairyProcessing InvestmentProgram. InvestmentProgramelements, theDairyFarm Program forDairy. Theprogram hastwo announcedtheCETAgovernment Transition Trade Agreement (CETA), thefederal European UnionComprehensive Economic Following theratificationofCanada- and byprocessors are beingplanned. investmentsonfarms their capacityandinturn, production andprocessing facilitiesare reaching required tomeetthemarketdemand.Both and achallengeasweworktoproduce themilk last year. Thegrowth hasbeenbothawelcome million litres compared to725.0millionlitres Our totalmilkproduction fortheyearwas740.7 opportunity tocapitalizeon25incentivedays. quota increase andproducers alsohadthe market. InAlberta,there wasasevenpercent and cheese,wecontinuedtoenjoyagrowing dairy products suchasbutter, cream, yogurt sustainedconsumerpreferencesWith fornatural Alberta Milk Year in Review 2016–17 9 the opposite direction when they announced when they announced the opposite direction DFC from withdrawing their funds they were however remain We for these very programs. the newly developed DFC committed to support and promotion product master brand for dairy marketing. Trade The call for a North American Free initiated by the review (NAFTA) Agreement pressure United States has caused considerable feel that the changes We on our industry. can be of NAFTA needed in other areas impacts achieved without having any negative with the level of very encouraged are on us. We to support the federal government has provided us during the early stages of the negotiations. to new directors we welcomed three This year, to my appreciation to express I want the Board. Albert Kamps, Allan Child, outgoing directors At the same Os. Wim Ruysch and Arnold Van Stuart Boeve and time we welcomed Pieter Ijff, valued and we have Gert Schriver to the Board year. the their input throughout Thanking the many stakeholders, industry our elected members, partners, fellow board Milk never at Alberta delegates and the staff gets tiring for me. Without the dedication of and within the dairy industry across hundreds government, we would not be able to achieve all we have. Dairy Commission. These are impressive impressive These are Dairy Commission. stability in that will provide accomplishments to come. And they build our industry for years we’ve made since supply on the progress 50 years ago. introduced management was for our Our strategic priority of advocating supply management, and building industry, for our paramount consumer trust remains Alberta Milk, in partnership with organization. has actively pursued our the poultry industry, strategies. All targets government relations reception have been met including hosting a able to showcase we were with 39 MLAs where for supply our industries and gain their support continued to also management. Producers Over 1,200 advocate and build consumer trust. on the people attended the two Breakfast Dairy Farm events held in central and southern an on-farm Alberta. These events provide took over experience to the general public and It's events like this 100 volunteers to coordinate. we do. that help consumers understand what and to enhance our relationships continue We to advance partnerships in the industry in order trust These partnerships require our industry. and I believe that we have and mutual respect Pool Milk made major strides. The Western as we progress members have made great work collaboratively to deal with challenges to attract jointly worked and opportunities. We to a collaborative by agreeing new processing milk allocations and in providing approach In January, transportation coordination. our marketing and Alberta Milk transferred nutrition education activities to Dairy Farmers efficiencies greater of Canada (DFC) to create funded value for the producer and increased marketing and nutrition education activities. very concerned to learn we were in However, July that Dairy Farmers in of Ontario was going 10 Alberta Milk Year in Review 2016–17 producers inAlbertaandtothedairyindustry. over 35yearsofdedicatedservicetothedairy Loughlin, marketdevelopmentmanager, forher retirement. IwanttopersonallythankKatherine careers, twoofourseniorstaff membersentered of AlbertaMilk.Afterlongandextensive It wasayearoftransitionfortheadministration issues thathavearisenthroughout theyear. approved businessplanandtoaddress new has takenonthisyeartodelivertheBoard- It hasbeenamazinghowmuchourorganization General Manager’s Message Mike Southwood scarce forthefamiliesthatneedtheseservices. funds wenttowards dairyproducts, astheyare awareness ofmilk anddonateover$4,000.All social mediawhere wewere abletoincrease the campaign, wecreated acampaign through theme ofthe Edmonton andCalgaryfoodbanks.Usingthe staff collaboratedtoraisefundsforthe playoffs, ourmarketingandcommunications as ourAlbertabasedNHLteamsentered the on nationalinitiatives.Forexample,thisspring, illustrate howprovincially we were abletobuild not takelongforthecreativity ofourteam to initiatives withtheDFCmasterbrand.Itdid Our AlbertaMilk-basedteamwilluniteourlocal positive whilestillkeepingaprovincial presence. fully integratedwithinthenationalteamisvery based nutritionandmarketingprofessions tobe opportunities fortheAlberta- the long-term While changeofthismagnitudeisachallenge, continue toworkoutoftheAlbertaMilkoffice. four nutritionstaff andmarketingcoordinator of January1.However, we are fortunatethatthe ofCanada(DFC)as functions toDairyFarmers nutrition educationstaff aswetransferred those We alsosaidgoodbyetothemarketingand worked with. understanding andrapportwithproducers he across theindustryandhadaverygood enjoyed hisrelationships withhiscounterparts manager forpolicyandtransportation.Gerd thedairycontrolgovernment, board andasthe through hisinvolvementwith theprovincial Gerd Andres alsoretired. Heservedtheindustry industry andherleadershipwithinAlbertaMilk. long beremembered forhercontributionstothe is missedbyallthatworkedwithher. Shewill Katherine wastheconsummateprofessional and PouraTall Cold One national Alberta Milk Year in Review 2016–17 11 Canada as we strived to ensure producers producers to ensure Canada as we strived and traceability for the animal care ready were modules. initiative that has The National IT Aggregation was boards involved seven other provincial on a new project as we brought refocused also developed an updated We manager. of this strategy that will now see the conclusion system collaborative milk management software launched by August 2018. Marketing In April, the Agricultural Products of the quota Council initiated a review managed administrative policies of the supply of this commodities. The collaborative approach and our policies proved initiative was rewarding that to be very much in line with the direction has come out of this process. through As always, Alberta Milk is strengthened of Board the commitment of the delegates, None of the achievements and staff. Directors this annual report throughout recorded that are of without the efforts would have been reached all. . This has been a massive file but Enhanced Protection for Farm and Ranch Enhanced Protection The staff changes and transition to DFC resulted to DFC resulted changes and transition The staff The policy of Alberta Milk. in a restructuring the leadership of functions moved under as she added to her role Denise Brattinga as Denise has been leading manager of finance. Ingredients on the development of the National We also used so this was a natural fit. Strategy, this opportunity to combine transportation in the new and our member services functions services. Combining milk division: producer other farm-related transportation and quality, managed services made a lot of sense and is Daria Taylor also welcomed by Mike Slomp. We the to the management team as she assumed services management of the new corporate division, a combination of our marketing and delegate support. and Board activities, IT, for I want to thank the management team as their commitment to making this transition seamless as possible. also While the transition was ongoing, we a number continued to work collaboratively with to advance of industry partners and affiliates Alberta Milk many important files in the industry. continued to play a significant and staff directors with the other members of the in working role an industry position to AgCoallition to create the government of Alberta as they advanced the Act Workers on this united all facets of agriculture has really in to implement proAction® topic. Our efforts has boards of the provincial step with the rest in Alberta Milk taking a multi-pronged resulted that involved workshops, on-farm approach training sessions, articles and printed resources. have worked with other industry Our staff stakeholders such as veterinarians and Holstein 12 Alberta Milk Year in Review 2016–17 elected tostepdown. the Board. AllanChild after nineyearson stepdown provision their mandatory Van Osallreached Wim Ruysch,Arnold Board. AlbertKamps, were electedtothe and Tom Kootstra Boeve, GertSchrijver Pieter Ijff, Stuart Four newdirectors, Producer Governance Initiative andproAction®. extension: antimicrobial resistance, updatesontheHealthyDairyHerd Strategy, industryadvocacyandAlbertaMilk’s role ineducationand workshop focusedonthedetailsaround theNationalIngredients about andprovide feedbackonkeyindustrymatters.Thisyear’s February. Thiseventprovides theopportunityfor delegates tolearn All delegatesparticipatedintheannualDelegateWorkshop in industry. Klooster (central)andAllanChild(north)fortheircommitmenttothe delegates GeraldWeiss van’t (south),RienMeinen(central),Cornel the provincial, regional, andnationallevels.Thankyoutooutgoing Alberta Milk’s operationsandtheissuesthatare beingaddressed at being elected.Theorientationprogram provides anoverviewof participated inthenewdelegateorientationsessionshortlyafter intheSouth Region.Thesenewdelegates and GerritHaarman Vandeand Wim BrakeintheCentralRegionandJohnVan Driesten Alberta Milkwelcomedfournewdelegatesthisyear:MirandaVerhoef Alberta MilkandtotheBoard. met three timesthisyearandare a and eachregion hasacommittee.Onaverage,theregion committees Our province isdividedintothree regions: north,central,andsouth, producers from across theprovince. OurBoardfarmers. ofDirectors (Board) iscomprisedof11elected our direction from ourBoard ofDirectors, whomare alllicenseddairy Alberta Milkisaproducer-driven organization, whereas wereceive reconsider theirfreezing pointviolationwhichwasdenied. The Board heldonereview thisyear. Aproducer requested theBoard defined inthe the Board andtheycanultimatelyappealtoanAppealTribunal, as A review mayberequested byapersonaffected byanydecisionof REVIEWS ANDAPPEALS Marketing ofAgriculturalProducts Act. n essential conduit of information to n essentialconduitofinformation Alberta Milk Year in Review 2016–17 13 d Van Hierden, Hierden, d Van

4 Alberta Milk directors directors Milk 4 Alberta Council Dairy 4 Alberta directors chair non-voting Appointed 9 delegates

Producers Negotiating Agency Agency Negotiating • • • South Region South Region Region Committee Region Committee

Producers 11 delegates Central Region Region Committee Region Committee Board of Directors Licensed Producers Licensed Producers 6 region directors 5 directors at large Committee:Executive vice-chair, second vice-chair chair,

• • •

Producers Producers 10 delegates North Region Region North Region Committee Region Committee members members 5 Alberta Dairy Council Council Dairy 5 Alberta Shared chair 5 Alberta Milk directors directors Milk 5 Alberta

x x Dairy Advisory Committee Advisory Dairy x

Jim Towle, Klaas Vander Veen, Heini Hehli Veen, Klaas Vander Jim Towle, From left: Lorrie Jespersen, Martin Van Diemen, Stuart Boeve, Tom Kootstra, Gert Schrijver, Gezinus Martens, Pieter Ijff, Conra Gezinus Martens, Pieter Ijff, Kootstra, Gert Schrijver, Stuart Boeve, Tom Diemen, left: Lorrie Jespersen, Martin Van From 14 Alberta Milk Year in Review 2016–17 Delegates byRegion AlfonsTen Brummelhuis Michael Vanden Dool Conrad Van Hierden WIllem Vanderlinde Martin Van Diemen Bill Van Rootselaar Klaas Vander Veen John Van Driesten Wim vandeBrake Brian Stoutjesdyk LorrieJespersen Miranda Verhoef Gezinus Martens Gerrit Haarman Arnold VanArnold Os Tietsia Huyzer Greg Debbink Gert Schrijver Albert Kamps Tom Kootstra Stuart Boeve Alain Lavoie Wim Ruysch Tim Hofstra HeiniHehli JP Brouwer Bart Bikker John Wurz Jim Towle Central Pieter Ijff North South Alberta MilkCommittees Milk Quality, Component Dairy FarmersofCanada Research andExtension Market Development DFC Board Member Animal Healthand and Measurement Corporate Affairs Dairy Advisory Transportation Environment omtesDrcosDelegates Directors Committees BalanceCo Executive Finance Vander Veen, Conrad Conrad Van Hierden, Gert Schrijver, Lorrie Tom Kootstra,Heini Tom Kootstra,Heini Stuart Boeve,Heini Tom Kootstra,Heini Klaas Vander Veen, Klaas Vander Veen Jespersen, Martin Towle, MartinVan Vander Veen, Jim Gezinus Martens Gezinus Martens Pieter Ijff, Klaas Martens, Klaas Martens, Klaas Hehli, Gezinus Hehli, Gezinus Hehli, Gezinus Gert Schrijver, Stuart Boeve, Vander Veen Van Hierden Van Diemen Heini Hehli Heini Hehli Pieter Ijff Martens Diemen Hehli Ten Brummelhuis,John Bart Bikker, Van Arnold Albert Kamps,BillVan Michael Vanden Dool, Greg Debbink,Alfons Huyzer, AlbertKamps Verhoef, vande Wim Os, MirandaVerhoef Willem Vanderlinde, Alain Lavoie,Tietsia Albert Kamps, Wim Vanden Dool,Brian JP Brouwer, Gerrit Brian Stoutjesdyk, Tim Hofstra,John Haarman, Greg Haarman, Debbink, Mike Wurz, Miranda Van Driesten Stoutjesdyk Rootselaar Ruysch Brake Alberta Milk Year in Review 2016–17 15 some of the marketing and nutrition resources to resources some of the marketing and nutrition members Dairy Farmers of Canada (DFC), five staff as well. Bethany Milligan also transitioned there marketing department, moved over to DFC’s Cindy Thorvaldson became the assistant director three of nutrition for Alberta, and Alberta Milk’s dietitians, Lee Finell, Colinda Hunter registered to Cindy directly and Jaclyn Chute, now report and continue to work on nutrition education Cory Peterson also in the province. programs and we welcomed Helen Gu to fill the resigned analyst. as financial role with continual learning staff Providing individual than just offering opportunities is more that enhance their courses or conferences knowledge in their particular field; we also provide On Wellness our Work Lunch ‘N’ Learns through we undertook a year- This year, (WOW) Program. that long team performance training program qualified for a $44,000 Alberta-Canada Job Grant. We want Alberta Milk to be a great place to want Alberta Milk to be a great We among a positive culture work and creating for management. In the past is a priority staff celebrated many accomplishments staff year, and navigated a variety of changes. The Board of service milestones length staff’s recognized with Alberta Milk: 15 years – Denise Brattinga, Bill Beisal, Darlene Crenshaw 10 years – Linda Likar Katherine Loughlin, Manager of Market after 35 years with the Development retired Manager of Andres, dairy industry and Gerd after working retired Policy and Transportation thank them for with Alberta Milk for 8 years. We their years of service and wish them the best in retirement. a few As well, this past year also brought significant changes to staff. With the move of BL- Bill Beisal, Cristin Vollrath, Morgan Hobin, Sheldon Appleyard, Mike SLomp, Kelsie Gilks, Kelly Mauthe, Jonathan Ntoni Hobin, Sheldon Appleyard, Morgan BL- Bill Beisal, Cristin Vollrath, Kathy Searle, Helen Gu, Denise Brattinga, Kathleen Heath Linda Likar, ML - Daria Taylor, Kim Skolarchuk Darlene Crenshaw, Karlee Conway, Kirtzinger, Rietveld, Audrey FL - Cndy Thorvaldson, Heather Gillis, Shelley Charmaine Lee Finell, Jaclyn Chute, Blatz, Jim Eisen Hunter, Missing - Mike Southwood, Jodi Flaig, Colinda Human Resources Human 16 Alberta Milk Year in Review 2016–17 Alberta. for dairyproduction in another banneryear making thisyear the highestinhistory, Alberta were, again, butterfat produced in total kilogramsof butterfat density, and The volumeofmilk, Milk Production compared tothepool’s limitof2.4030. SNF production thisyearresulted inanSNF/BFratioof2.2537 densities shippedthisyear, relative tolastyear. TheWMP’s collective over lastyear’s (2.2619)wasmainlyduetohigheraveragebutterfat 2.2416. Theimprovement inAlberta’s SNF/BFratio(i.e.,-0.90percent) well belowitsprovincial SNF/BFratiolimitof2.4167,byproducing Alberta alsoachievedproduction ofSolidsNon-Fat(SNF)tobutterfat produced itsallottedquotaby-4.87percent. per centover-production whileandWestern MilkPool(WMP)under- MilkPool(P5)endedthedairyyearwith+3.09 members oftheEastern many incentivedaysgrantedbytheAlbertaMilkBoard. Collectively, increases (sevenpercent)inproducer quotaissuancecombinedwith provincial quotaallotmentforthedairyyeardespitesignificant especially inbutterfat,Albertaconsistentlyunder-produced itsmonthly demand. Asaresult oftheunprecedented growth indemand, to allowforenoughmilksupplymeettheever-growing Canadian penalties were suspendedbytheCanadianDairyCommission(CDC) production opportunitiesin2016-17.Overandunderproduction Alberta didnotincuranyover-production penaltiesorloseany Alberta produced atotalof29,894,836kgbutterfat. Because ofthisrecord highbutterfatdensityandstrong milkvolume, kg/hl, surpassingtheprevious record highof4.0072kg/hlin2015-16. butterfat (BF)contentofthismilkwasthehighestonrecord at4.0360 representing 8.46percentofCanadianmilkproduction. Theaverage Alberta’s 520dairyproducers shipped740,710,762litres ofmilk, TPQ thatAlbertareceives. in Total ButterfatRequirements which directly result inthequantityof response toaneedrebuild Canadianbutterstocksaswellgrowth and March 1,2017. TheseTPQissuanceadjustmentswere issuedin and January1,2017twopercentincrease eachonFebruary1, for producers, a1.50percentincrease eachonSeptember1,2016 28,868,940 kgofbutterfat.There were fourTPQissuanceadjustments of butterfat,anincrease of7.93percentfrom the2015-16levelof Alberta’s provincial Total Production Quota(TPQ)was31,157,339kg CREDITS TOTAL PRODUCTIONQUOTA ANDUNDERPRODUCTION Alberta Milk Year in Review 2016–17 17 21,403,427 31,743,069 86,472,274 82,076,133 120,218,387 89,943,410 360,117,035 356,837,015 152,499,639 41,870,968 Total 740,710,762 602,470,595 Class (L) Volume $ Value Class 4 Class 3 Class 1 Class 2 Class 4a (1), 5, 7, meter shrink 2016-17 EQUALIZATION STATISTICS BY CLASS STATISTICS 2016-17 EQUALIZATION INCENTIVE DAYS April and issued. Except for January, A total of 25 incentive days were days three one, three, were May 2017 (whose issued incentive days days in place per all other months had two incentive respectively), in TPQ issuance and unusual schedule increases month. The robust demand for to rapidly increasing in response of incentive days were in Market Sharing Quota growth butterfat, contributing to the fastest also issued five incentive years. The Alberta Milk Board in recent July to December 2016. from producers days per month for organic January per month from 15 incentive days they received Additionally, growth demand and projected milk with organic in accordance to July, market. of the organic The total amount of TPQ transferred via the quota exchange was of TPQ transferred The total amount via private while the total amount of TPQ transferred 1,341.14 kg/day, 25.56 kg/day of that TPQ in resulting kg/day, transfers was 510.77 844,349.78 kg of was also to Alberta Milk. There being surrendered producers. between transferred credits underproduction NEW ENTRANT ASSISTANCE PROGRAM Alberta Milk’s NEAP provided a 2:1 ratio of The goal of Alberta Milk’s New Entrant loaned to owned quota each year. The maximum Assistance Program (NEAP) is to assist TPQ loan a successful new entrant may receive passionate, knowledgeable individuals and from Alberta Milk is 25 kg/day and is provided families who want to start a dairy farm by for up to 10 years. Eight applications were alleviating some the start-up costs of dairy received in 2017 and two applicants were farming. The program strives to accomplish this accepted into the program. The 2017 New goal by loaning a small amount of the province’s Entrants were: Total Production Quota (TPQ) to up to two successful applicants each year to assist them in Ÿ Casey and Janine Tilma of Pickardville establishing a viable dairy farm. Municipality Ÿ Dylan and Nichole Wintjes of Penhold Municipality

MILK PRODUCTION AND PAYMENT STATISTICS/INFORMATION

Year 2015-16 2016-17

Provincial Butterfat (kg/hl) 4.0072 4.0360

Provincial Protein (kg/hl) 3.3202 3.3149

Provincial OS (kg/hl) 5.7438 5.7322

Pool Deductions ($/kg) ($0.0006) ($0.0045)

Producer Butterfat Price ($/kg) $11.65 $11.93

Producer PR Price ($/kg) $3.92 $3.59

Producer LOS Price ($/kg) $3.42 $3.42

Average Milk Price $79.33 $79.67

Total Milk Revenue $575,971,850 $589,284,548

Milk Quality Bonus $1,392,802 $1,341,393

Environment Funding ($) $1,006,762 $1,020,259 Alberta Milk Year in Review 2016–17 Alberta Milk Year Total Producer Revenue $577,535,115 $591,646,200

18 Alberta Milk Year in Review 2016–17 19 the adoption of the National Pricing Formulathe adoption of the for 1 to 4. Under this scheme, milk sold in Classes prices will comprise 50 per adjustments to milk the as established by cent of Cost of Production based on changes in the CDC and 50 per cent Consumer Price Index. Upon implementation, in the National Pricing Formula resulted per (0.4109 adjustments of $0.0446/kg decrease in the price of SNF in classes 1-4 cent decrease) February 1, 2017. effective the extension of the The CMSMC approved program Class 4(m) Liquid MPC and Skim Milk to the until April 30, 2017 to facilitate transition The Strategy is Strategy. National Ingredients of a competitively- on the creation predicated class – Class 7 – for milk priced ingredients and dairy ingredients components, milk products and processing for utilization in the production As well, it's for of milk and dairy products. dairy utilization and sale beyond the primary food industry to other markets in the processing feed and food service industries and animal the Dairy industries. The committee adopted by the pools Billing ratios as approved Product for use in the Harmonized Billing Mechanism. a Last but not the least, the CMSMC approved regulatory that the proper decision to ensure framework is in place at the national and levels, to give CDC and provincial provincial auditors the authority needed to audit and apply the Harmonized Billing Mechanism conditions on milk buyers and non-milk buyers. The CMSMC activity was very busy this year with two additional special meetings (a total of six meetings for the year). These meetings were of the full implementation to ensure required NIS was achieved. The Canadian Milk Supply Management The Canadian Milk is a national advisory Committee (CMSMC) Dairy Commission (CDC), body to the Canadian that makes provinces consisting of 10 voting quota, pricing production, decisions on industrial enhancements of milk and policy/program products. that expands the use of milk in dairy up of member made A technical secretariat, Canada supports the across from organizations CMSMC and the CDC in policy development and economic analysis. of $5.944 refund the CDC’s CMSMC approved received million, to which Alberta producers maintained $430,652. In addition, the CMSMC (GA) effective allowance a five per cent growth of the GA is percent August 1, 2017. Two per cent is three permanent while the remaining and under temporary until July 31, 2018. Over by the CDC still suspended quota penalties are to allow enough until July 31, 2018 in efforts market. to serve the growing production 249.39 were Canadian Butterfat Requirements share million kg of butterfat (BF) and Alberta’s was 18.94 million kg for the period. The annual budget was $629,746. CDC Cost of Production contributed $200,000 to the budget and the contributed the balance. Alberta’s provinces our share contribution was $52,154, representing of total quota (i.e., 8.7582 per cent). Milk Pool (WMP) and the EasternThe Western a CDC support price Milk Pool (P5) approved for skim milk powder and butter increase September 1, 2016. This adjustment effective in a 2.76 per cent in support price resulted milk from revenue in producer overall increase cheese and into yogurt, ice cream, processed blend The overall impact on producer butter. $1.13/hL on all milk. was approximately revenue In addition, the CMSMC, P5 and WMP approved Canadian Milk Supply Supply Milk Canadian 20 Alberta Milk Year in Review 2016–17 producers whichwasanincrease from lastyear. year, atotalof225penalties were appliedto125 producers incurfinancialpenalties.Thispast provincial requirements. Whenthishappens, Occasionally, milkqualitydipsbelowthe *difference from lastyear seen withfreezing pointsandbacteriatests. inhibitors, althoughsmallincreases were also counts andanincrease inthenumberofpositive on milkqualitywasanincrease insomaticcell levels (seetablebelow).Thebiggestimpact quality statisticsare marginally belowlastyear’s to previous years.Asaresult, mostofourmilk overall milkqualitydippingslightlycompared Producers hadsomeproduction challengeswith provincial standard formilkqualityin2016-17. More than99percentofourproducers metthe somatic cells,freezing pointandinhibitors. basis tomeasure milkquality. Theseare bacteria, Raw milkistestedforfourcriteriaonaregular MILK QUALITY Freezing Point Somatic Cells Milk Quality Parameter Inhibitors Bacteria % ofproducers meeting the 0521 2016-2017(*) 2015-2016 provincial requirements for 90 99.01(-0.15) 99.01 99.06 99.16 98 98.28(-0.78) 99.86 99 99.31(-0.67) 99.98 raw milkquality* Milk Quality 1 1 2 2 5 0 5 0 5 0 0 0 0 0 , , , , , 0 0 0 0 0 Hutterian Brethren Church ofPine 0 0 0 0 0 Hutterian Brethren ofThompson 0 0 0 0 0 Pelchat, Fernand orCarol-LynnPelchat, Fernand 0 Top Ten FarmsforMilkQualityinAlberta Roseglen HutterianBrethren Deerfield HutterianBrethren Helmus, MarinusandAlja H &JLeusinkDairyLtd. A Sylvanside DairyLtd.

226,000 l b GDL Farms Ltd. GDL Farms e Fenske, Ken r t a

Haven 217,000

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195,000 l y

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190,000 C

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199,000 r a g e

194,000 s Central North South South South South South North North North

201,000

Alberta Milk Year in Review 2016–17 21 award. This year 117 producers (23%) This year 117 producers qualified for the annual quality MILK SAMPLING milk commitment to excellent quality Producers’ testing is supported by an extensive raw milk than submit more that saw producers program past 12 103,000 samples for testing over the the basis of producer are results months. Test and awards milk quality bonus programs, on a number of industry rely penalties. Producers companies, partners including the milk hauling couriers and the Central Milk dairy processors, lab to collect and deliver samples for Testing manner. testing in a timely and controlled CELEBRATING EXCELLENCE IN MILK EXCELLENCE CELEBRATING QUALITY to awarded is milk quality award Our provincial the farm quality milk in all of with the highest to Hutterian Brethren Alberta. Congratulations 2016-17 provincial the Thompson for receiving milk quality award! (see table below) Alberta Milk has two programs the milk excellence in milk quality, for rewarding quality bonus and the milk quality award. milk quality bonus At or under -0.525H At or under -0.530H No positive inhibitors No positive inhibitors (high of 74%, low of 59%). This year on average 69% of Average of 30,000 cells/ml or lessAverage of 15,000 cells/ml or less Average Average of 250,000 cells/ml or lessAverage of 200,000 cells/ml or less Average producers qualified for the monthly producers Results Bacteria Inhibitors Freezing Point Freezing Somatic Cell Counts Milk Quality Parameter Milk Quality Bonus Milk Quality Award MILK QUALITY AWARDS AND MILK QUALITY BONUS PARAMETERS MILK QUALITY AWARDS MILK MEASUREMENT Calibration Program The on-farm Bulk Milk Tank and re- calibrates all new tanks as required years. calibrates existing tanks every five plants the two processing monitor routinely Staff the Metering and Proportional part of that are is checked This equipment Sampling program. Measures and times a year by Weights three for accuracy and Canada representatives compliance. Somatic cell counts (SCC) is used as an indicator Somatic cell counts well to higher correlates of milk quality and Following the regulatory quality dairy products. of 400,000 cells/ml in change to a maximum consistently have 2012, Alberta producers superior quality milk. While the produced average of 201,000 cells/ml 2016-17 provincial years, it last year was higher than the past few pre-2012. averages was still lower than provincial SOMATIC CELL COUNTS CELL SOMATIC 22 Alberta Milk Year in Review 2016–17 Saskatchewan andBritishColumbia. time inyears,Albertamovedrawmilktoboth milk movementbetweenprovinces. Forthefirst the west.TheWMPcontinuedtocollaborateon of milksupplywithintheprovince andacross to ensure themostcost-effective transportation well asourWestern MilkPool(WMP)partners provincial milkhaulersanddairyprocessors as Alberta Milkstaff interactdailywiththe efficiencies withinthetransportationsystem. production brought challengestomaintain liters inMay. Thecontinuedincreases inmilk average dailyvolumetoppedover2.1million the firsttimeinourprovincial history, Alberta’s to quotaandadditionalincentivedays.For over thepastyearinresponse totheincreases Milk production hascontinuedtosteadilyrise Transportation Some keytransportationstatisticsinclude: Ÿ Ÿ Ÿ cent in2015-16efficiency. at 91.5percentascompared to93.9per 28,500 litres trailershavebeenoperating Basedonalegalvolumecapacityof 16. of 26,088compared to26,759in2015- 25,079 litersupto26,886,withanaverage The averageroute volumehasvariedfrom (the averagewas148in2015-16). 2015-16), withanaverageof155routes increased from 154to162(144in The numberoftwo-dayroutes has to 60in2015-16). each dayhasincreased from 60to63(58 The numberofmilktrucksontheroad Alberta Milk Year in Review 2016–17 23 Transportation Hauler Transportation . This review confirmed that any one . This review for two separate years; September 1, for two separate years; September Hauler Pay for Hauler Allocation Policy The transporter is limited to hauling 25 per cent of the total Alberta transporter is limited to hauling 25 production. of the transportation rates for the A review Formula also for August 1, 2017 2016 to July 31, 2017 (11 months) and to July 31, 2018 (normal the 12 months). For both timeframes, recommendations and forwarded the rates committee reviewed for consideration. to the Alberta Milk Board worked with a Alberta Milk and several other provinces consulting firm to begin delivery of new hand-held devices to modernize data collection. our milk pickup and delivery to all milk haulers will Complete delivery of the new devices occur in the upcoming year.

Ÿ Ÿ Ÿ TRANSPORTATION ADVISORY COMMITTEE ADVISORY TRANSPORTATION worked on several staff Advisory Committee and The Transportation raw milk including: the transportation of affecting policies and issues 24 Alberta Milk Year in Review 2016–17 Ingredients Strategy(NIS). around financialimplicationsandtheNational The keyoutcomesoftheWMPCCfocused are developedforWMPCCconsideration. economic analysisandpolicyrecommendations and technicalcommitteesare forumswhere provinces.each ofthewestern Themembers and sub-technicalcommitteeofstaff from members from eachprovince andatechnical by amemberscommittee,madeupofexecutive Committee (WMPCC).TheWMPCCissupported is theresponsibility oftheWMPCoordinating policies andprograms. oftheWMP Governance provinces,among thefourwestern withshared The Western MilkPool(WMP)isanagreement Western MilkPool 10 provinces. administrative program was establishedbythe came intoeffect February 1,2017,oncethe and implementednationally. TheNISagreement measure theimpactsofNISasitisshared Additionally, there isadesire tomonitorand NIS. of criteriarequired fortheimplementationof Pool. Theworkinggroup developedanumber committee thatisalsosupportedbytheP5 Strategy (WGINIS).TheWGINISisanational implementation oftheNationalIngredients reference establishingaworkinggroup forthe NIS, theWMPCCapproved of theterms To supportthefullimplementationof Management Committee. as approved bytheCanadianMilkSupply WMPCC adoptedtheNationalPricingFormula in theWMPuntilJuly31,2017.Also, resulting from milkreceiving specialtreatment sharing ofrevenue-losses andadditionalcosts The WMPprovinces agreed toextendthe the agreement isrenewed bytheP5andNL. quota sales.Thesecostscontinuetobeshared if between theprovinces according tototalin- production. Thesecostswill thenbeshared WMP, according toshares ofmonthlyindustrial initiatives were shared betweentheP5and to specialclasses,Class3(d)andmarketing Newfoundland andLabrador’s (NL)exposure costs exceedingthe$861,000captolimit Specifically, theWMPCCagreed that Alberta Milk Year in Review 2016–17 25 As the collaborative effort and voice of animal As the collaborative effort in Alberta, Alberta FarmAnimal Care care facilitated discussions on livestock and (AFAC) and resistance, poultry housing, antimicrobial were consumer interaction. These discussions of AFAC structure the new supported through includes and the generation of a council which bringing a all members participation from perspective to those producer grassroots real to AFAC discussions. Alberta Milk contributes leadership. board financially and through which Cattle Benchmarking project, AFAC’s the condition of cattle evaluated and recorded arriving at auction markets and abattoirs, completed its data collection phase. The and all of AFAC a collaborative effort is project AFAC Alberta dairy and beef cattle producers. has begun the evaluation of the collected data to working with its project and looks forward supporters and members to deliver information in the future. and tools to support animal care JOHNE'S DISEASE INITIATIVE JOHNE'S DISEASE with our partners how Alberta Milk reviewed Alberta ongoing support for the best to offer to Disease Initiative and committed Johne’s delivery platformsdevelop sustainable for Alberta to support programs existing and future in their continued drive for dairy producers success. ANIMAL CARE FARM ALBERTA ation on (bTB) event that transpired (bTB) event that transpired Tuberculosis EMERGENCY PREPAREDNESS year has this past The focus of biosecurity efforts for disease preparedness been on emergency Milk, along with Alberta Beef Alberta outbreaks. and Alberta Pork, participated in an emergency efforts These management planning project. that have been completed build on projects in other livestock sectors in Alberta and across Canada, and is particularly timely given the Bovine One of the new programs, the Lameness One of the new programs, Reduction Initiative (LRI), was launched start. to a great early 2017 and has been off As trusted partners in dairy cattle health orientation management, veterinarians received risk lameness to the LRI and then delivered The delivery the province. assessments across often began with on-farm workshops which inform focused on sharing current lameness challenges, identifying potential a variety of causes, and sharing opportunities for management strategies. effective Key takeaways in Alberta over the last year. the importance of bTB event are the from biosecurity and traceability at both the industry levels (eg: premise and individual producer The ID, animal ID and movement reporting). Canadian Cattle Identification Agency has been an important partner in assisting Alberta to understand and access the dairy producers traceability system. LAMENESS REDUCTION INITIATIVE Alberta Milk and its many industry partners Alberta Milk and its to develop new continued the commitment to programs and support existing programs dairy in maintaining healthy assist producers herds. Animal Care Care Animal 26 Alberta Milk Year in Review 2016–17 proAction national basis.To date,176 producers havebeenassessed. where theyrankyearlyincomparisontootherdairyproducers ona lameness, bodycondition,hock,neckandkneelesions anddetermine improvementto gaugetheirindividualfarm ontheparametersofherd benchmark. Producers will beabletousethesebenchmarksasatool being collatedandusedforthepurposeofdeveloping anational assessments through Holstein Canadabeganandtherawdatais encourage themtostriveforcontinualimprovement. animal On-farm recognition toproducers thatare doinganexcellentjobandto care fortheircattle.Thegoalofvalidatinganimalcare istoprovide known thatdairyproducers are committedtoproviding outstanding Animal care ispracticeddailyonAlberta’s anditiswidely dairyfarms ANIMAL CAREMODULE to adjustmanagementpractices. received trainingonstandard operatingprocedures (SOP’s) andtime self-declarations overthelastfewyears.More recently, producers CQM)hasbeenmonitored(formerly through validationsand on-farm provincial Milk,Grade&PriceProgram andtheFoodSafetymodule The MilkQualitymoduleofproAction istransitionedfrom our FOOD SAFETYMODULE objective ofstreamlining thedeliveryofprogram toproducers. (DFC). Thesecommentsidentifiedareas forimprovement withthe provinces ofCanada wascollectedandanalyzedbyDairyFarmers in March. Theirfeedbackalongwiththe from theother were conductedwith25Albertaproducers overathree-week period Mock validationsforthenationalproAction IntegratedPilotProject PILOT PROJECT the pipeline. modules, allowingproducers anin-depthlookatwhatiscomingdown discussions. proAction isevolvingregularly withsoftroll-outs ofnew sessions,andone-on-oneproducerin theMilkingTimes, on-farm producers. We accomplishedthatthrough regional workshops,articles was veryactiveinitsdesign,testing,traininganddeliverywithour proAction® continuedto takeshapeacross CanadaandAlbertaMilk impact ofan animal diseaseoutbreak. Itisalsoanopportunity toassist producers andthedairyindustryprepare for, manageand reduce the The foundationoftheLivestock Traceability Moduleistohelp LIVESTOCK TRACEABILITY MODULE ® Alberta Milk Year in Review 2016–17 27 ENVIRONMENT MODULE Farm Plan is Environmental The provincial the base level of expectation for this module. Module continues to the Environment However, training be under development, with producer to begin in September 2019 and full validations starting September 2021. BIOSECURITY MODULE BIOSECURITY MODULE is a hazards Management of biosecurity on the moderncontinuous practice day dairy to monitor these risks in Alberta. It is essential on the health of dairy as they have an impact of safe and high- animals and the production development of the The quality dairy products. and biosecurity module has been completed and the dairy producers included feedback from validations validators that took part in the mock committee national proAction the and through Milk has discussions. Much of the work Alberta Disease to the Alberta Johne’s done in regards the development of in Initiative was reflected this module. training phase the producer Looking forward, September 2017 to August 2019 will run from to cattle relating focussing on the requirements and health management; cattle additions vehicle and movement; and personnel, visitors, equipment. Playing a critical role in maintaining the Playing a critical role trust of our consumers important for many Being increasingly and countries to which we export animals genetics Including Government, farmers and other industry stakeholders (processors, that we can transporters, etc.) to ensure need rapidly trace back any issue that may such as in the recent to be addressed southern case in bovine tuberculosis Alberta. Ÿ Ÿ Ÿ MOCK VALIDATIONS and Mock validations for the Animal Care to have been offered modules Traceability as another opportunity to prepare producers for their inclusion in full validations beginning September 2017. These mock validations are being completed by either the validator at the time of the CQM validation or by an Alberta Milk contractor and will continue until all producers have been visited. with food safety, animal care and emergency and emergency care animal with food safety, our industry in particular, management. For as: sees traceability proAction closely with Alberta Alberta Milk has partnered the use of the through and Forestry Agriculture Mobile Canadian Cattle Identification Agency’s this (MFR). Through Field Representatives have been encouraged producers relationship, help address to to use their local representative of module requirements the Traceability These MFRs hosted and reporting. recording and worked the province workshops across up accounts to set one-on-one with producers and enter animal information. Alberta dairy as no fortunate for this resource are producers has access to it. other province 28 Alberta Milk Year in Review 2016–17 been working diligentlytoreview andrevise the Canada. Overthelastyear, thepartnershave across theprovince andthroughout western dairy research anditsextension toproducers encourage collaborationamong partnersin and theuniversitiesofAlberta andCalgaryto Alberta Agriculture andForestry, AlbertaMilk Alberta (DRECA)partnership,comprisedof Dairy Research andExtension Consortiumof Alberta MilkworkedwiththeCDRCand milk composition,qualityandsafety. sustainability, animalhealthandwelfare, and research prioritiesare:efficiency dairy farm and National DairyResearch Strategy. Thenew knowledge transferprioritiesbasedonDFC’s funding, AlbertaMilkhasendorsedresearch and In aneffort tosupporttheefficiency of research transfer. a nationalstrategyforresearch andknowledge nutrition anddairyproduction research basedon implementation ofactivitiesrelating tohuman and supporttheoveralldevelopment Council (CDRC).Itsmandateistoguide (DFC) launchedtheCanadianDairyResearch ofCanada At thenationallevel,DairyFarmers funders, andAAF. crop andlivestockcommoditygroups, research AFC includesrepresentation from multiple proposals inanefficient andeffective manner. partnership inreviewing andsupportingresearch Advisory Committeehasmaintainedasuccessful Consortium (AFC),ourResearch andExtension through thelongstanding Agriculture Funding support fordairyresearch inAlberta.Working research prioritiesandensure continuedfunding Agriculture andForestry (AAF)toidentifydairy Alberta Milkhasworkedcloselywith to itsresearch fundingstructure andprocess, ofAlberta’sFollowing theGovernment changes Dairy Research annual DRECAForum. Workshops andassistanceinpreparing forthe Managing People,Production andPerformance producer extensionactivities,includingthe2017 We workedthrough DRECAtodelivernumerous activities. producers through shared extensionefforts and investment inameaningfulmannertodairy investments, leveragefundingandreturn the organizations tostrategically review research milkproducerour colleaguesofthewestern producers. Thisincluded specific efforts with and skillstomeetthechangingneedsofdairy delivery methodsofresearch results, knowledge new dairyfacility. lease fortheexpandedproduction as supported thisproject by providing aquota employees andserviceproviders. AlbertaMilk specific shortcoursesfordairyproducers, their college onneweducationalinitiativesincluding looking forward tofullengagementwiththe in thebuildingplanningprocess andare producer representatives activelyparticipated centre atLakelandCollege.AlbertaMilk’s the state-of-the-artdairyfacilityandteaching The summerof2017sawthecompletion LAKELAND COLLEGEDAIRY CENTRE part ofthe Alberta Milk Year in Review 2016–17 29 AGSAFE ALBERTA SOCIETY AGSAFE ALBERTA committed to farmThe AgCoalition is safety. the creation with is reinforced That commitment will focus only on raising of a new society which education and training and providing awareness Alberta. on farm safety across Alberta The society has been named AgSafe of directors Society (ASAS). An interim board a generic has signed the initial paperwork and Alberta template of bylaws has been compiled. Diemen to the Milk has appointed Martin Van ASAS board. the role While lobbying will continue to be to for the AgCoalition, the ASAS is intended farm only and does not engage in safety address any political lobbying. substantially on business plan builds ASAS’s being done by the crop the work already is group This industry and livestock group. material such as check lists, developing resource work books and videos for farm safety training. will completed by this group The work already to the ASAS. be transferred The AgCoalition sees The Enhanced Protection for Farm The Enhanced Protection Meeting directly with government officials with government officials Meeting directly the impact of the new act on the to review farm community six Participating in the government’s the farm consultation tables regarding safety legislation Investing in the considerable background the associated regulations work to address (ES), such as Employment Standards Labour Relations (LR) and Occupational Health and Safety (OHS). The ES and LR now in place while the are regulations (which will be the most OHS regulations still a work in progress. are comprehensive)

Ÿ Ÿ Ÿ Since its creation, the AgCoalition has effectively the AgCoalition has effectively Since its creation, than thirty Alberta farm together more brought to the new farm in response safety groups legislation: Act. and Ranch Workers itself as a lobby group and is also viewed and and itself as a lobby group governmentsuch. by the provincial as respected capacity as a It has served the industry well in its political lobby group. Examples of the AgCoalition work include: Farm safety is a high priority area for Alberta Farm high priority area safety is a an active are We Milk and its members. based AgCoalition, a group participant in the of goal to foster a culture on a common industry farm safety in Alberta. Farm Safety 30 Alberta Milk Year in Review 2016-17 interest suchas: groups worktogetheronissuesofmutual activities. Through thisalliance,thelivestock Intensive LivestockWorking Group (ILWG) We activelysupportedandparticipatedinall GROUP INTENSIVE LIVESTOCKWORKING Implementation InsightsReport. Leadership PlanAgri-IndustryWorkshop process wassummarizedintheGOA’s Climate and theagriculture industry. Theconsultation on thecrop andlivestocksectorsspecifically to theGOAregarding thelikelyimpactofthis the intentofCLPandtoprovide feedback GOA consultationprocess tobetterunderstand agricultural commoditygroups participatedina for agriculture specifically. AlbertaMilkandother environmental landscapefortheprovince and was likelythemostsignificantchangein introduced ofAlberta(GOA) bytheGovernment The newClimateLeadershipPlan(CLP) Ÿ Ÿ Ÿ livestock producers. Thisissuemay open case additionaltaxesforthe intensive restrictions, detoursandinatleastone roads andbridgesleadingtoload financial difficulty inmaintaining their certain municipalitieshaveexperienced Rural Infrastructure Revenue Deficit– Creek (nearMarkerville). Kneehill Creek nearAcme)andTindastoll watersheds: AcmeCreek (atributaryofthe lands. Arisktoolisbeingpilotedintwo Alberta managephosphorusontheir projectlong term tohelpproducers in Sub BasinPhosphorusPilotProject -a the middlereach oftheBowRiver a plantoaddress sources ofphosphorusin Bow RiverPhosphorusManagementPlan- Environment Ÿ Ÿ Ÿ Ÿ solution forallofagriculture. are beginningtoworktogethertowards a counties andtheprovincial government local plastic andgrainbags.Farmers, including balertwine,netwrap,silage recycling agriculture plasticscontinues: Ag Plastics–thechallengewithhandling/ Alberta AgSafebanner. families across theprovince underthe education resources andranch forfarm safetyextension and developing farm representatives toensure progress in worked productively withthecrop sector Safety–theILWGFarm members records. producers tokeepmanure management Practices Actwhichdirects livestock in response totheAgriculturalOperations records formanure management.Thisis creation aphoneappwhichwillkeep aregovernment collaboratingonthe the livestockindustryandprovincial Manure ManagementRecord Keeping- infrastructure. of agriculturalequipmentonrural solutions thatwilladdress theimpact and otherindustrypartnerstoachieve working withtheprovincial government regarding liquidmanure wagons.We are enforcing road weightrestrictions Hauling –afewmunicipalitiesare Municipal RoadRestrictionsonManure is assessedandtaxedinthefuture. Actandhowagriculturalland Government up discussionsregarding theMunicipal Alberta Milk Year in Review 2016–17 31 . three levels of government as well as three Agricultural Operations Practices Act Agricultural Operations Practices Act non-government organizations (NGO) to encourage dialogue and (NGO) non-government organizations for the issues environmental understanding of new and emerging and specific commodity group purpose of developing knowledge design. input into government policies and program with the meets regularly Conservation Board The Natural Resources (PAG). its Policy Advisory Group livestock sector and NGOs through potential industry is a valuable mechanism for dialogue on PAG challenges regarding The Agri Environment Partnership of Alberta (AEPA) continues to continues (AEPA) Partnership of Alberta The Agri Environment to and livestock producers forum for the crop serve as a valuable with the work collaboratively AGRI - ENVIRONMENT PARTNERSHIP OF ALBERTA PARTNERSHIP AGRI - ENVIRONMENT 32 Alberta Milk Year in Review 2016–17 as well. electronically monthly also distributed MilkingTimes, cent. Ournewsletter, standard by30per beats theindustry each ofoure-blasts The openrateof Canada’s FoodGuide. on changesto them totakeaction workshops tourging quota toproducer changes totheir stakeholders about our membersand was abletoinform email distributionlist in early2017,our their inbox.Launched to timely information members withmore created toprovide our This newtoolwas Distribution Email List is Producer Engagement of Canada’s activities, proAction inattendance.Updates werefarms provided ontrade,DairyFarmers The springmeetingswere alsowellattended withover40percentof Alberta MilkMarketingRegulation. trade, theNationalIngredients Strategy, andchanges comingtothe were44 percentofourfarms represented. Updateswere provided on The FallProducer Meetingssawapproximately 460participants.About updates onkeytopicstheorganization isaddressing. most current onproduction information andquotamanagement, spring andfalltoprovide producers andindustrystakeholders withthe Alberta Milkhostsannualproducer meetingsacross theprovince inthe PRODUCER MEETINGS Understanding Traditional andSocialMedia,Workplace Safety. ahead. Three concurrent sessionswere: AnimalRightsActivism, on makingsure thatagriculture isprepared forthechallenges dairy intoashoppingcart,whileGord Winkel’s messagewasfocused spoke abouttheretail sectorandspecificallyaboutgettingmore The plenarysessionfeatured twokeynotespeakers.PeterChapman few years. topics, includingissuesthattheindustryexpectstofaceovernext Milk directors facilitatedround tablediscussionsonanumberof networking opportunities.Duringtheproducer-only session,Alberta presentations, chancestodiscusspoliciesandissues,ample over 260participants.Theeventfeatured abalanceofeducational Conference washeldNovember22-24inCalgary where wehosted The 2016AlbertaMilkAnnualGeneralMeetingandDairy ANNUAL GENERALMEETINGANDDAIRY CONFERENCE Milk re-shapes howweengageourfarmers. mission. Astheirneedsandwaystheycommunicateevolves,Alberta engaging themiscriticaltounderstandingachievingourvisionand areOur farmers thesoulofourorganization. Communicatingand Resource Conservation Board process permit whichwaswell received. industry update.PeterWoloshyn presented anupdateontheNatural ® , NationalIngredients Strategy andan Alberta Milk Year in Review 2016–17 33 RECOGNITION OF SERVICE AWARD RECOGNITION is a way Service award The Recognition of committed people who have to recognize It is dairy industry. provincial themselves to the academics and processors, open to producers, members of government agencies or industries was with dairy in Alberta. Mike Pearson affiliated award. the inaugural awarded for the manager As former corporate affairs Council, Mike Marketing Agricultural Products in the dairy Pearson has played a pivotal role development and its relationship industry’s with government. His knowledge of marketing and federal at both the provincial regulations to the dairy valuable level was extremely transition to a industry during Alberta Milk’s in 2002. marketing board Milk did not end assistance to Alberta Mike’s to with the transition in 2002, he continued sage advice and assistance to Alberta provide the Milk, with drafting, amending or interpreting under which Alberta Milk operates. regulations Tim Hofstra (right) presents the Dairy Industry Achievement Award to the Bocock brothers. the Dairy Industry Achievement Award Hofstra (right) presents Tim John and Bill Bocock were the 2016 recipients of the 2016 recipients were John and Bill Bocock Through Achievement Award. the Dairy Industry the Alberta Milk seeks to convey the Award, hold for dairy producers that Alberta’s respect that work so hard the people and organizations personal often to the detriment of their own our industry. farms to help sustain and grow dairy whose trendsetters John and Bill are have spanned decades. They have gone careers their community and to protect lengths to great but future land so it can serve not themselves, generations of farmers—by selflessly donating to the University of Alberta, of land 777 acres Station for the Albert Research the St. to create Life and Environmental Faculty of Agriculture, the linkage Sciences. This Faculty explores greenhouse between agricultural practices and soil erosion gas emissions, water management, In turn, development. the and sustainable crop and Chair in Agriculture Bocock high-profile to oversee research created, was Environment long already activities. This is in addition to their list of accomplishments. DAIRY INDUSTRY ACHIEVEMENT AWARD ACHIEVEMENT AWARD INDUSTRY DAIRY 34 Alberta Milk Year in Review 2016–17 governance, growgovernance, theirleadership skills,and resources toassistthem inunderstandingboard three-day developmentcoursethatprovided Manitoba, andOntariotoparticipateinthe from BritishColumbia,Alberta,Saskatchewan, 2017. Twenty cametogether dairy farmers inJanuary Conference washeldinWinnipeg The secondannualFuture LeadersDevelopment CONFERENCE FUTURE LEADERSDEVELOPMENT across Alberta. showcase ourindustryandtobeapartofevents continue tothriveandgrow andweare proud to organization istoensure thatthosedairyevents achievement daystodairyshows.Astapleofour eventsacrossfarming theprovince from 4-H Alberta Milkcontinuedtosponsordairy SPONSORSHIP foralldelegates. as wellcontactinformation by includingacalendarofmeetingsandevents, new sitewasaupgradedfrom theprevious one computer orsmartphone.UsingSharePoint, this better accesstocurrent from information their in Januarytohelpourelectedproducers have The newDocumentSharingsitewaslaunched DOCUMENT SHARINGSITE negotiations. trade supply managementandinternational on issuesthatchallengeourindustry, suchas events. Theycanalsoreference keymessages and information have quickaccesstoforms, abouttheirquota,butalso see information value ofhavingasitewhere producers can for producers only. Lastyearproved the The Member’s Onlywebsiteisasecure website MEMBER’S ONLY WEBSITE WestGen. ofManitoba,CanWestDairy Farmers DHIand by BCDairyAssociation,AlbertaMilk,SaskMilk, of ourcurrent delegates.Thisprogram isfunded producers from Albertaattendedincludingtwo network withproducers from otherprovinces. Six management. of Alberta’s supportofourindustryandsupply greetings andshowedhistheGovernment Forestry theHonourableO’NeilCarlierbrought honoured thatourMinisterofAgriculture and andvisitedlocalattractions. Wefarms were dairy products, toured adiverserangeofdairy We were abletoprovide agreat showingof and toshowcaseAlbertathedairyindustry. We were pleasedtohostover350participants AGM was Edmonton, July16-19,2017.Thethemeofthe of Canada(DFC)annualgeneralmeetingin Alberta Milkhostedthe2017DairyFarmers DAIRY FARMERS OFCANADAAGM Conference. Attendees ofthe2016-17Future Leaders Development Building aSustainableDairyIndustry. Alberta Milk Year in Review 2016–17 35 Alberta Milk offers Alberta Milk offers at least one $1,000 scholarship to a student in any year of study at an officially post- recognized secondary institution. The applicants are evaluated on an essay about how they plan to benefit the of Alberta’s future as dairy industry, well as scholastic achievement, leadership skills, community involvement, 4-H, and work experience. (Ter Borgh Dairy Ltd, Calmar). Miriam is in her Borgh (Ter (Marylander Holsteins Inc, Picture Butte). Jaime is a (Marylander Holsteins Inc, Picture (K-Vet Holsteins Ltd, Ponoka). Shelby is in her third year Holsteins Ltd, Ponoka). Shelby is in her third (K-Vet (Yff Dairy Ltd, Innisfail). Michael is in his first year of Animal Dairy (Yff

Science Technology at Lakeland College. He intends to return to the at Lakeland College. He intends to return Science Technology dairy farm upon completion of his courses. second year at the University of Saskatchewan studying agriculture studying agriculture second year at the University of Saskatchewan science. Miriam was involved in majoring in animal and bioresources, a dairy nutritionist and help 4H for six years. Her goal is to become milk. farmers continue to do what they love doing most: producing Jaime Hummel of Lethbridge working on fourth year student attending the University Jaime plans on teaching her Bachelor of Arts/Education. As a teacher, work that is put and the hard their food comes from where children Jaime was actively involved in 4H before into every food product. attending university. Michael Ijff RECIPIENTS Shelby Devet of her Bachelor towards at the University of Saskatchewan working active in 4H and is a certified Dairy Science in Agribusiness. She is still in She is interested Certificate program. the Green through Technician and upon our milk comes from of where the marketing and awareness she’d like to pursue. feels that this is an area completion of her degree, Miriam ter Borgh The Alberta Milk Scholarship was created to help sustain the dairy was created The Alberta Milk Scholarship a related students who study dairy or industry as it encourages Alberta Milk dairy industry. discipline that furthers the agriculture scholarships that of youth by offering invests in the potential and ability to build youth for their community contributions reward self- at the same time, create sustainability in the dairy industry and, esteem and fuel success. Alberta Milk Scholarship Milk Alberta 36 Alberta Milk Year in Review 2016–17 province: AmazingAgriculture inEdmonton, staff attendedfouragriculture eventsacross the tours,AlbertaMilk addition totheseonfarm to tourandteachthemaboutourindustry. In astheywelcomedchildrentheir farm, andadults We had36producers request itemstouseat EVENTS food comesfrom. andwhere dairyfarming their about modern We are investedinteachingurbanAlbertans ConradVanDairy farmer Hierden connectswithconsumersattheCalgaryStampede. Calgary InterfaithFood Bank. $13,175 inproceeds tothe from Dare foods,andwedonated Stampede, withcookiedonation continued attheCalgary The MilkandCookieShack Agriculture Education Alberta classrooms. oranagriculturewith farmers representative in Grade 4studentshaveanopportunitytointeract Classroom Agriculture Program (CAP)toensure Alberta Milkcontinuestoworkcloselywiththe CLASSROOM AGRICULTURE PROGRAM knowledge andanswerconsumerquestions. ofMilkbooth tosharewith theJourney their our producers whocameouttotheseevents and theCalgaryStampede.Thankyoutoallof Aggie DaysCalgary, Aggie DaysLethbridge, Ÿ Ÿ Ÿ Number ofschoolsreached: 553 23,053 Total studentsthatreceive presentations: 1,017 Total classesthatreceived presentations: Alberta Milk Year in Review 2016–17 37 Breakfast on the Dairy Breakfast Farm huge hit was a with again this year, two events held in central Alberta at Boom Holstein and southern Alberta at den Pol Dairy. Van Combined, the two events saw over 1,200 attendees with the support of over 100 volunteers. in Edmonton The Tomato in Calgary. . This issue is distributed with The Ter Borgh farm in Dinner Starts Here. was featured Borgh The Ter The City Palate and in DINNER STARTS HERE DINNER STARTS a social media guru, dairy farmer Campbell, and owner of Andrew the year about a different Air Media made videos every week of Fresh Bough family farm to shoot his type of farming. He visited the Ter what a day video on dairy farming and the family walked him through in a life of a dairy farmer is like. A SEAT AT OUR TABLE AT A SEAT at Willow and participated in this event hosted sponsored Lane We Barn near Olds to bridge the gap between consumers and producers the together 150 of the up-and-comers, It brought over dinner. fifth generations and the never- established, the industry leaders, the set-foot-on-a-farm meal. It literally to talk about food over a five course put farmers got to hear their story. next to consumers and each The Ask a Dairy Farmer feature on our website, albertamilk.com, on our website, albertamilk.com, The Ask a Dairy Farmer feature This last solution to the curious minds of consumers. continues to be a milk quality to locating dozens of questions from year we answered use multiple platformsWe to of dairy products. specific varieties issue of stage in the consumer but took centre this feature, promote GrainsWest ASK A DAIRY FARMER ASK A DAIRY 38 Alberta Milk Year in Review 2016–17 physical activityandproper nutrition. These eventsteachgirlsabouttheimportanceof event through chocolatemilkandgiveaways. Additionally, AlbertaMilksupportedfiveGoGirl includinghockeyandringette. tournaments throughout theprovince withmilkatprovincial We alsofocusedonsportsponsorships Emergency Shelter, andBlitzSnowshoeRun. Run, StolleryFunBustaMove,Youth Children’s Festival,SportCheckMother’s Day Some oftheseeventswere: International attended 29eventsreaching 38,000participants. with consumersandprovided milksamples.We Through ourpromotion crew, weinteracted Tour ofMorinvilleColony. Prairie onaPlate,Porkapalooza,andFood November, CultivatingConnectionsreception, eating local.Theseeventswere: Christmasin and letthemknowabouttheopportunitiesof reach outtoconsumersandfoodbloggers events inwhichwehadtheopportunityto Alberta MilkparticipatedinsixTaste Alberta new boards were usedin43rinksacross Alberta. throughout Albertawasrevamped thisyear. The Ourchocolatemilkmessagingatrinks awareness todairy. andmuchmoretournaments tobringmore extensive reach intothehomes,rinks,events, of mindforAlbertans.In2016-17,wehadan ensure thatdairyproducts remain atthetop Sponsoring eventsisagreat opportunityto LOCAL CONSUMERSPONSORSHIPS Consumer Outreach College. 2016-17 recipients. Bothare nowattendingOlds and MitchellZorattiofPincherCreek were the their post-secondary. Karley DiekenofVermillion each winnerreceived $1,000toputtowards offer theASAA-AlbertaMilk scholarshipand and AlbertaMilkpartnered againthisyearto Alberta Schools’AthleticAssociation(ASAA) ASSOCIATION ALBERTA SCHOOLS’ATHLETIC ordering. we alsosetupattheannual generalmeetingfor order theirdesired items. Inadditiontoonline, it easierforbothconsumers andproducers to ordering atalbertamilk.comwhichhasmade consumers. Allproducts are availableforonline were produced forAlbertaMilkproducers and A varietyoflogoedmerchandise andincentives MERCHANDISE ANDINCENTIVES children inneedgetproper nutrition. dairy products. Ourfundinghelpedthousandsof towards ensuringtheirparticipantshadaccessto for Calgary’s Kids(BB4CK)withgrants toput Services (YESS),E4C,andBrown Bagging Edmonton- Youth Support Empowerment three feedingprograms withinCalgaryand This year, wealsoprovided $60,000towards time. to continueparticipating,orjoinfortheirfirst encourage schools find solutionsand are workingto present, butwe continue tobe Club Moo.Barriers participated in 313 schools In 2016-17, CLUB MOO Moo years onClub celebrating 30 22 schoolsare Alberta Milk Year in Review 2016–17 39 , ran in the Recovery Camp, Powered by Chocolate Powered Adopt a New Routine Recovery Crew attended nine events Recovery Crew CHOCOLATE MILK CHOCOLATE by Chocolate Powered The As part of Milk West, campaign, YOUTH CAMPAIGN Time, the April 2017 saw the finale of Snack youth. In animated video campaign targeting the launch in from aired total 80 episodes were July 2014 to end of July 2017. MILK WEST SPONSORSHIPS by Chocolate Milk Powered X Challenge, four events, the Warrior sponsored and Spartan Race Red Deer, Triathlon, World over in Edmonton, reaching Triathlon World 22,000 engagements. Milk 4,750 engagements with 3,600 samples reaching of chocolate milk given out. west until December 31, 2016 with digital west until December 31, 2016 with components. MILK REWARDS was program The high school Milk Rewards active in 263 high schools and 46 post- The program Alberta. secondary schools across September 26 to December 2, 2016 ran from to each person who a game card and rewarded milk, plus milk. Prizing included free purchased points that could be accumulated and used to a prize of their choice such as Herschel redeem pack backs, Fitbits and 32“ Sony TV’s. This on-package promotion generated over This on-package promotion 800,000 entries in western Canada, 305,000 million Alberta. Over 27 from of which were chocolate marked cartons and jugs of white and processors, three in market from milk were The prizes were Saputo, Parmalat and Agropur. a 1-2017 Honda Ridgeline EX-L, a 1-2017 Honda In addition, Fit SE and 400 McCafe gift cards. McCafe Lattes, cappuccino or other 500,000 free beverage made with freshly specialty coffee This given as a gift with entry. steamed milk were the winner of the 2017 Ridgeline was Elke year, Foothills, AB. Kusler from Elke Kusler of Foothills, was the winner of the Milk Mooves You promotion. Milk Mooves You Elke Kusler of Foothills, was the winner of the MILK MOOVES YOU PROMOTION Milk West Wrap-Up West Milk 40 Alberta Milk Year in Review 2016–17 Dairy Farmers ofCanadalaunchedthenewlogo Dairy Farmers MASTERBRAND intense orprolonged activity. the perfectbeveragetorecover withafterphysically objective wastocommunicatethatchocolatemilkis and female,rantwoflightsfrom May1to28.The campaign, targeted atthe 35-49yearoldactivemale A chocolatemilkdigital(gym)andtransitshelter CHOCOLATE MILK and reach. 11 to30percentofallcommercials forawareness results showedthecampaignscored inthetop out-of-home, andin-store contestelements.Testing August 27.Thiscomprehensive campaignhaddigital, February 13toApril9andsoftballfrom July3to new light.There were twoversions:hockeyranfrom by portrayingitasbeingdesired andcravedina males 35-49andfemalesappreciate milkagain launched withthecommunicationobjectivetomake In February, the campaign. the firstday, indicatingtheeffective reach ofthis the milkglassesthatwere availablewere outofstock milk raninthefall.Thecampaignwaspopularand a newinvention,glassspecificallymadefordrinking The MilkGlass FLUID MILKMARKETING Canada (DFC)onJanuary1,2017. nutrition educationprogramming of toDairyFarmers Alberta Milktransitionedthefluidmilkactivitiesand , atransitionalcampaignwhichpitched Pour aTall ColdOne Marketing Dairy FarmersofCanada campaign Alberta Milk Year in Review 2016–17 41 cheese campaign: Canadian cheese. Crafted cheese campaign: with Creativity. make imported cheese New trade laws will so consumer, accessible to the Canadian more cheese it was important to establish Canadian worth as a global competitor and an indulgence sharing. With in mind, DFC a millennial target a narrative that separates Canadian created cheese, that European imported, cheese from Mia & Morton, a short being our creativity. the journey animated, digital film that chronicles as she of a young, Canadian cheese-maker herself learns to express the craft and begins Mia & Morton was despite her traditional father. video, pre-roll distributed online as a YouTube Facebook advertisements. targeted and through second The campaign included 15 and six videos, a website, out-of-home advertisements, in and influencer programs national retailer trailer addition to a 13 stop National Cheese of Edmonton where The trailer was at Taste tour. and over distributed 3,455 cheese samples were enjoyed. 2,600 grilled cheeses were CHEESE the integrated In the spring, DFC introduced and brand identity which was developed to and brand identity and the corporate organization both represent new brand The consumer. be the face to the and bring together all was designed to inspire in the dairy industry and stakeholders producers Canada. For consumers, the new logo across made will make it easy to identify products our with quality Canadian milk and to support farmers. Unique and engaging TV commercials the message to consumers with in- brought that highlighted products merchandising store found results made with Canadian Milk. Tracking top 11 to 30 per in the the campaign scored in spend, cent (very good) of all commercials reach. and awareness 42 Alberta Milk Year in Review 2016–17 resources entered towinasmoothie kitfortheir ofCanada (DFC)programsDairy Farmers and Smoothie Power: 967 hard copies) were distributed. and 1,018studentworkbooks (51downloads, teacher guides(76downloads, 59hard copies) well andwereached 20teachers. Overall,135 studies program. Thesessionswentoververy Teachers’ ConventioninCalgaryforthefoods Conference inCanmore andthePalliser offered attheCareer and Technology Studies Power Up!withMilkandEggs:Sessionswere enrolled intheprogram created 172classes.Thismeans1,130students the program and registered for year 82teachers (Grade 7-9):This Power tobeMe compatible. on updatingtheprogram tobetouchscreen school year, andprogress continuestobemade revisions were completedforthe2017-18 students remained positive.Extensiveprogram for theprogram. Feedbackfrom teachersand cent ofcapacitywith467classrooms registered Power4Bones (Grade5):We reached 98per Royal University. teachers attheUniversityofAlbertaandMount total offoursessionswere givento100student schools andatTeachers Conventions.Aswell,a school year159teachersattendedworkshopsin Power toPlay(kindergarten toGrade3):This EDUCATOR PROGRAMS health educatorstohelpshare ourmessages. on educationinschoolsandconnectingwith products are avitalpartofwhatwedo.We focus Educating consumersaboutthebenefitsofdairy

Teachers whouseAlberta Milk/ Nutrition Dairy FarmersofCanada Contest. Over400teachersvisitedthebooths. education programs andthe SmoothiePower Moo2You andDFCpromoted ournutrition promoted theirschoolmilkprograms and north centralandEdmonton.AlbertaMilk an interactiveboothattwoteacherconventions: dietitians partnered withAlbertaMilkandhosted Teacher ofCanada’s Conventions:DairyFarmers feedback onthedraftwellnesscurriculum. participated intwofocusgroups togive areas whileteachingnutrition.DFCsubsequently teachers tomeetoutcomesfrom othersubject impressed withthefactourprograms allow education inthecurriculum.Thegroup was importance ofcontinuingtoincludenutrition Working Groups withAlbertaEducationonthe dietitian wasinvitedtopresent totheExpert Working withAlbertaEducation:ADFC subscribe. 2017 thatmadeitnecessaryforteacherstore- new CanadianAnti-SpamlegislationinJanuary Unfortunately, oursubscriptionsdecreased due help teachersteachnutritionintheclassroom. programs, Pinterest pagesandactivitiesto subscribed. Thenewsletterhighlightsourschool Eating forYour Classroom were senttoteachers School Newsletter:Three issuesofHealthy continued in2017-18. winners inthespring.Thisprogram willnotbe classroom. We had10winnersinthefalland19 professionals andeducators,200+ nutrition skills. Theprogram reached 300+health sport nutrition,dietaryfats andinterpersonal participants. Topics included: themicrobiome, and outstandingspeakers, requested byour Hot Topics: ByRequest.We examined hottopics Nutrition FileSeminar:The2017eventwastitled HEALTH PROFESSIONALPROGRAMS Alberta Milk Year in Review 2016–17 43 . Over DIGITAL ACTIVITIES DIGITAL Collaborating with Local Dietitians: Building dietitians in with registered relationships Alberta is mutually beneficial. For DFC, we that it helps to establish a local fortunate are amplifies our messages and increases presence, work with Albertan dietitians We our credibility. in the digital world in a variety of ways such as and Nourish Move Healthy., Tasty. on the Easy. Thrive blogs, digital campaigns that include and features, dairy farm tours and recipe media segments. sponsorship of dairy-related Eating Tips to Help New Moms Thrive to Help Eating Tips distributed were resources 32,000 single print on the we did research In March, this year. Over (NMT) program. Nourish Move Thrive that the nutrition agreed half of fitness leaders NMT contributed either a great from resources share deal or somewhat to their ability to nutrition information with class participants. The annual Alberta Fitness Leadership Certification in May Association, Fit Rendezvous Conference attended was a success. Fifty-five fitness leaders also had a display our nutrition session. We and sponsored featuring our nutrition resources During the break. at an energy dairy products sessions to nine in-person year we delivered courses, trainer recertification fitness leaders at NMT continuing the workshops and through education course.

Healthy and The Hunger Scale, ewsletter and over and Our 2017 resource Our 2017 resource

Smoothies catalogue was developed and distributed to and educators. over 5,000 health professionals nutrition education our free promoted also We our e-n through resources ordered. 260,000 individual pieces were Nourish Move Thrive: Fitness leaders continue to 239 subscribers had connect with us online. We blogs per two to the website blogs (release also had 860 likes on our Facebook month). We August since page, a 21 per cent increase nutrition free 2016. Fitness leaders can order A the online store. from education resources this revised were number of print resources year such as Nutrition File for Health Educators newsletter: Nutrition File for Health Educators published Four issues of the e-newsletter were Viewingand distributed to 600+ subscribers. very high at over 50 per cent and rates were subscribers extended by greatly was our reach the newsletter to their colleagues. on forwarding Nutrition Resources: developed called were and two new resources During Pregnancy Eating Well students. The program generated overall students. The program to the participant According positive feedback. learning objectives evaluations, the program overwhelmingly met, the speakers were were excellent, and participant rated as good or 2018 we will celebrate met. In expectations were our 20 year anniversary of the program. 44 Alberta Milk Year in Review 2016–17 This campaign received over1,600retweets onTwitter andwe donatedover$4,000to the foodbanks. every goalscored byanAlbertateamduringtheplayoffs. need totheCalgaryorEdmonton foodbanksfor donated onemonth’s costofmilkforoneperson in one servingofmilktosomeone inneed.We also For everyretweet ourimagegot,we donated were competingthisyear. Milk withtheNHLplayoffs asbothAlberta teams campaign, PouraTall ColdOne,connectedAlberta World MilkDay/DairyMonth.Ourmostsuccessful at specificaudiencesaround NutritionMonth and Facebook. We hostedvarious campaignstargeted engagement andfollowersonbothTwitter and However, wesawnearly15percentincrease in to DFC,thesocialmediawasalsotransitioning. thetransitionofmanymarketingteam With SOCIAL MEDIA digital footprint. In October, weconsolidatedmoreaboutmilk.com intoalbertamilk.comtoprovide amore cohesive WEBSITE helps improve ourrelationship withthemedia. Additionally, wehaveastaff memberthatisadirector Writer’s ontheAlbertaFarm Associationthat Assistant Program, aresponse toPresident Trump’s comments,andthenewleadershiponourBoard. of press releases thisyear. Theyvariedfrom theDairyIndustryAchievementWinner, NewEntrant Alberta Milkdistributedavariety PRESS RELEASES radio shows. Express andvariousothernewspaper the Western Producer, AlbertaFarmer We alsofacillitatedmanyinterviewswith perspective. all ourmajormediaoutletswanting about theCanadiandairyindustryhad following President Trump's comments our biggestyearinmedia.Thebacklash large audiences.The2016-17 yearwas The mediaisaneffective tooltoreach Communications Digital andMedia Dairy farmer JeffDairy farmer NonayposesonthecoverofEdmontonJournal. Alberta Milk Year in Review 2016–17 45 INTERNATIONAL announced that the USA Trump President American the North would be withdrawing from and stated he (NAFTA) Agreement Trade Free market in had his eye on accessing the dairy the Canada. DFC and Alberta Milk reiterated country and value of supply management for our the government team with provided negotiation valuable input into the consultations. the completion of the As a fallout from Agreement Trade European Comprehensive the Canadian government announced (CETA), a five-year transitional funding to compensate dairy farmers for the additional five per cent of cheese that would soon access our European market. Alberta Milk facilitated that information they would have the to ensure to our producers funding to modernize best chance at receiving their operations. of a The year finished with the introduction the Liberals that would from new tax proposal farmers’ We pockets. look at taking funds from started working with the Canadian Federation of support crowd to bring a larger of Agriculture as this issue pushes of agriculture all facets from into 2017-18. As part of the Liberal Government’s Healthy Government’s As part of the Liberal to three changes proposed they Eating Strategy, the dairy industry: front things that will impact having they proposed of pack labelling where of “unhealthy food” which icons on the front a sugar tax, as included some dairy products, Food Guide well as an overhaul of Canada’s of the prominence to reduce they want where all dairy as a staple for Canadians. In response, helped launch a campaign to bring provinces to this issue as the year came awareness more these to a close in hopes that MPs will rethink changes. proposed NATIONAL annual Once again, we participated in DFC’s met with a record We lobby day in February. number of MPs in Ottawa to discuss supply management, sugar tax and the Trans-Pacific Minister MacCauley Partnership. Agriculture also publically stated his support for supply supply management by stating that “Canada’s management system is a model for the world.” The whole industry was watching the election of a new Conservative Party of Canada’s The dairy industry had concerns over leader. the election of Maxime Bernier whom vowed to dismantle supply management. However, who is a Scheer, farmers united and Andrew supporter of left supply management, narrowly on the vote. PROVINCIAL The New Democratic Party fundamentally was there supports supply management and MLAs to learn our marketing about support from hosted system. This was illustrated at an event in with Alberta Supply Management (SM5) nearly 40 MLAs come we saw November where We and show their support for our industries. during meetings continued these relationships MLA and with rural caucus, MLA Cortes-Vargas, we also met Littlewood. In partnership with SM5, with MP Sohi and MP Boissonnault. continued our annual sponsorship of the We in Calgary and Edmonton, Breakfasts Premier’s with directly able to connect which we were Notely and many lead officials. Premier The 2016-17 year proved to be a challenge proved The 2016-17 year Both front. on the government relations obstacles, and federally presented provincially times illustrated the these hard but throughout tenacity of dairy farmers to unite and their ability and succeed. Relations Government Government 46 Alberta Milk Year in Review 2016–17 following fivestrategicpriorities. dairy industryAlbertaMilkhasdevelopedthe the issuesfacingandopportunitiesfor Based onathorough environmental scanof STRATEGIC PRIORITIES focused industry. system inagrowing, sustainableandmarket- to supportaneffective supplymanagement Alberta Milkpartnerswithindustrystakeholders MISSION: trusted source ofqualitymilk. Growing asustainabledairyindustrybybeing VISION: statements. the Board adoptedrevised andMission Vison During theannualstrategicplanningprocess which setstheorganization’s direction. Board ofDirectors developsthestrategicplan Guidelines andGovernance, In accordance withthe Ÿ Ÿ Ÿ Ÿ Ÿ

members. environment that meetstheneedsofour operations andmaintainthe regulatory We willensure effective andefficient region.western We willthink,decideandexecuteasa stimulate sustainablegrowth. We willencourageindustryinvestmentto and opportunities. agriculture groups oncommonconcerns other dairyindustryorganizations and We willbeatrustedpartnerworkingwith management. We willeffectively advocateforsupply

Alberta MilkOperational the AlbertaMilk Preparing fortheFuture meet thefollowingaccountabilities. measurement ofsuccess.AlbertaMilkstrivesto to advancethesepriorities.Akeyfactoristhe Targeted specificactionsare alsodeveloped measures. Thefiveareas ofriskinclude: and definitionofriskmitigationstrategies risk identification,evaluationofprobability, in theupcomingyear. The process includes and opportunitiesthattheorganization willface environmental scantoidentifysignificantrisks management andtheBoard an performed During thebusinessplanningprocess, RISK PREVENTION Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ 5. External risk–structuralchange,disasters, External 5. Operationalrisk–capacityconstraints, 4. Organizational risk–leadershipdepthand 3. Financialrisk–liquidity, investment,theft 2. Strategicrisk–failure toimplementor 1.

leadership, knowledgeandengagement. delegates’ andBoard members’ Building strong through governance region.executed asawestern Identified strategiesare developedand addressing mutualinterests. Effectively leveragingrelationships in A growing, sustainabledairyindustry. Strong publictrustforthedairyindustry. management. Strong stakeholdersupport forsupply government support/change government quality ,membershipsatisfaction quality, managementcapacity develop strategy Alberta Milk Year in Review 2016–17 47 financial audit and the development with the financial audit and to the Board. presentation budget, prior to their access to the have free auditors The Board’s of their to discuss the results Finance Committee concerns their and opinions. work and to express of the The following discussion and analysis and financial position of operating results 31, 2017, Alberta Milk, for the year ending July in conjunction with the financial should be read statements. higher than budgeted by were Actual revenues higher restricted from $41,509,779, resulting the operation from resulting (revenues revenues pools). These payment of various producer higher than accounted for $41,172,469, due to than 14 anticipated milk volumes of greater milk volume also This increased million litres. assessment fees of in higher board resulted revenue $411,519 however milk transportation due to was slightly under budget by $192,384 efficiencies. greater higher than budget by Expenses were payment pool $40,054,049. Producer exceeded budget by $41,314,336. expenditures The costs of operating the milk transportation pool and quota management operations were under within budget. Marketing activities were budget by $790,745 associated with the timing of transition to Dairy Farmers of Canada in 2017. Our member services activities January, under budget $440,829 due to a also were grant and reduced delayed funding of a net zero activities. costs associated with proAction Management Discussions and Discussions Management Analysis Alberta Milk’s management team is responsible team is responsible management Alberta Milk’s and all informationfor our financial statements The statements have in this annual report. with Canadian in accordance been prepared for not-for-profit accounting standards These statements have been organizations. audited using generally accepted auditing reporting 1, which provides Schedule standards. of our statement of operations in accordance is considered with our business plan and budget, unaudited as the firm was not engaged to budget figures. of conduct an audit review in elsewhere Financial information presented with the statements is consistent this report provided. for financial its responsibility In discharging management maintains and relies reporting, systems on financial and management control reasonable and practices designed to provide authorized, assurance that transactions are are records and proper safeguarded, assets are practices ensure and maintained. These controls conduct of business, the accuracy the orderly of the timely preparation of accounting records, information, financial reliable and the adherence policies and statutory requirements. to board adopted and Accountability systems are as a key component of Alberta Milk’s approved a report receives Business Plan. The Board at each on the operations of the organization of review meeting, a comprehensive Board operations at mid-year and a summary of The Finance Committee operations at year-end. for responsibilities oversees management’s systems and the maintaining adequate control support of this reporting. In quality of financial quarterly the committee reviews responsibility, financial statements and oversees the annual HOW ARE WE ENSURING ACCURATE ACCURATE HOW ARE WE ENSURING FINANCIALS?

Grant Thornton LLP 1701 Scotia Place 2 10060 Jasper Avenue NW Edmonton, AB Independent Auditor’s Report T5J 3R8

T +1 780 422 7114 F +1 780 426 3208 To the Board of Directors of Alberta Milk E [email protected] www.GrantThornton.ca

We have audited the accompanying financial statements of Alberta Milk, which comprise the statement of financial position as at July 31, 2017 and the statements of operations, changes in net assets and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Organization's preparations and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, these financial statements present fairly, in all material respects, the financial position of Alberta Milk as at July 31, 2017 and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations.

Camrose, Canada

October 20, 2017 Chartered Professional Accountants

Audit • Tax • Advisory Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd

ALBERTA MILK STATEMENT OF OPERATIONS FOR THE YEAR ENDED JULY 31, 2017

Quota 2017 2016 Exchange MNE Scholarship Research Other Total Total

REVENUES: Assessments: Administrative $ - $ - $ - $ - $ 3,703,569 $ 3,703,569 $ 3,625,233 Class 1 Market Recovery - - - - 1,678,559 1,678,559 1,763,439 Marketing, Nutrition, Education (MNE) - 11,110,677 - - - 11,110,677 10,875,667 Research - - - 370,357 - 370,357 362,523 Restricted Revenue - Equalization - - - - 607,726,404 607,726,404 588,474,095 Hauling Fees - - - - 27,074,836 27,074,836 26,418,853 Interest Revenue - - 2,344 - 147,982 150,326 83,344 Grant Revenue (Note 6) - 31,680 - - 644,811 676,491 264,228 Processor Audit Recovery - - - - 131,659 131,659 129,872 Quota Lease - - - 608,268 - 608,268 600,875 Quota Exchange Sales 52,049,961 - - - - 52,049,961 41,953,106 Other Income - 25,596 - 710 529,711 556,017 463,661 Total Revenues 52,049,961 11,167,953 2,344 979,335 641,637,531 705,837,124 675,014,896

EXPENSES: Salaries and Contract Services - 554,538 - 46,920 3,092,183 3,693,641 4,059,661 Director and Delegate per diems - 6,356 - 18,964 355,790 381,110 411,861 Travel - 34,915 - 21,656 465,822 522,393 670,119 Office - 462,159 - 1,921 859,226 1,323,306 1,333,562 Data Processing - - - - 720,279 720,279 683,873 Meeting Costs - 20,187 - 2,537 410,406 433,130 308,630 Professional Fees - 1,801 - - 216,276 218,077 181,367 Communications - 6,236 - - 6,518 12,754 15,685 Advertising - 8,909,476 - - 83,660 8,993,136 8,396,824 Project Costs ------13,528 Hauling Fees (Note 10) - - - - 27,074,836 27,074,836 26,418,853 Research - 10,828 - 137,025 - 147,853 137,164 Sponsorships - 517,424 4,000 - 44,507 565,931 318,215 Grants - 17,710 - 900,370 33,500 951,580 1,106,953 Quota Exchange Purchases 52,049,961 - - - - 52,049,961 41,953,105 Restricted Expenses - Equalization - - - - 607,726,404 607,726,404 588,474,095 Amortization/Write Offs - 29,306 - - 372,387 401,693 343,621 Total Expenses 52,049,961 10,570,936 4,000 1,129,393 641,461,794 705,216,084 674,827,116 EXCESS OF REVENUES OVER EXPENSES FOR THE YEAR $ - $ 597,017 $ (1,656) $ (150,058) $ 175,737 $ 621,040 $ 187,780

See accompanying notes and schedules to the financial statements. ALBERTA MILK STATEMENT OF FINANCIAL POSITION AS AT JULY 31, 2017

2017 2016

ASSETS CURRENT ASSETS: Cash and investments (Note 3) $ 12,558,526 $ 12,404,862 Due from processors, producers and others 26,253,092 27,784,430 Accounts receivable 3,477,410 2,205,051 Inventories 70,991 - Prepaid expenses 335,155 624,771 Total current assets 42,695,174 43,019,114

CAPITAL ASSETS (Note 4) 2,358,496 2,220,229

TOTAL $ 45,053,670 $ 45,239,343

LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Accounts payable and accrued liabilities $ 4,679,591 $ 2,102,882 Deferred contributions (Note 5) 28,749,888 30,519,641 Deferred grants (Note 6) 386,237 396,907 Current portion of long term debt (Note 7) - 60,000 Total current liabilities 33,815,716 33,079,430

NET ASSETS: Invested in capital assets 2,358,497 2,160,229 Internally restricted: Marketing 2,985,952 4,088,935 Research 479,331 537,391 Scholarship 126,391 128,047 Quota exchange (Note 12) 997,721 997,721 Unrestricted 4,290,062 4,247,590 Total net assets 11,237,954 12,159,913

TOTAL $ 45,053,670 $ 45,239,343

Commitments (Note 9)

APPROVED ON BEHALF OF THE BOARD:

See accompanying notes and schedules to the financial statements. ALBERTA MILK

STATEMENT OF CHANGES IN NET ASSETS

FOR THE YEAR ENDED JULY 31, 2017

Internally Restricted Quota Invested in 2017 2016 Exchange Marketing Scholarship Research Unrestricted Capital Assets Total Total

BALANCE AT BEGINNING OF THE YEAR $ 997,721 $ 4,088,935 $ 128,047 $ 537,391 $ 4,247,590 $ 2,160,230 $ 12,159,914 $ 15,273,134

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENSES FOR THE YEAR - 597,017 (1,656) (150,058) 175,737 - 621,040 187,780

ADMINISTRATION COSTS TRANSFERRED (Note 13) - - - 91,998 (91,998) - - -

PURCHASE OF CAPITAL ASSETS - - - - (539,960) 539,960 - -

AMORTIZATION OF CAPITAL ASSETS - - - - 401,693 (401,693) - -

DEBT REPAYMENT - - - - (60,000) 60,000 - -

TRANSFER OF NET ASSETS - (1,700,000) - - - - (1,700,000) (3,000,000)

PENSION REMEASUREMENT LOSS (Note 11) - - - - 157,000 - 157,000 (301,000)

BALANCE AT END OF THE YEAR $ 997,721 $ 2,985,952 $ 126,391 $ 479,331 $ 4,290,062 $ 2,358,497 $ 11,237,954 $ 12,159,914

See accompanying notes and schedules to the financial statements. ALBERTA MILK

STATEMENT OF CASH FLOW

FOR THE YEAR ENDED JULY 31, 2017

2017 2016

CASH PROVIDED BY (USED FOR): OPERATING ACTIVITIES: Excess of revenues over expenses from operations for the year $ 621,040 $ 187,780 Items not affecting cash flow: Amortization of capital assets 401,693 343,621 Gain (loss) on pension 157,000 (301,000) 1,179,733 230,401 Changes in non-cash working capital items: Due from processors, producers, and others 1,531,338 (2,386,826) Accounts receivable (1,272,359) (83,432) Prepaid expenses 289,615 (66,347) Inventories (70,991) 84,521 Accounts payable and accrued liabilities 2,576,711 (544,984) Deferred contributions (1,769,752) 708,930 Deferred grants (10,671) (17,155) Net cash from (to) operating activities 2,453,624 (2,074,892)

FINANCING ACTIVITIES: Loan repayments (60,000) (90,000) Transfer of Net Assets (1,700,000) -

Net cash to financing activities (1,760,000) (90,000)

INVESTING ACTIVITIES: Purchases of capital assets (540,500) (409,827) Proceeds on sale of capital assets 540 100 Net cash to investing activities (539,960) (409,727)

INCREASE (DECREASE) IN CASH AND INVESTMENTS FOR THE YEAR 153,664 (2,574,619)

CASH AND INVESTMENTS AT BEGINNING OF THE YEAR 12,404,862 14,979,481 CASH AND INVESTMENTS AT END OF THE YEAR $ 12,558,526 $ 12,404,862

See accompanying notes and schedules to the financial statements. ALBERTA MILK

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2017

1. AUTHORITY AND PURPOSE OF THE BOARD:

Alberta Milk ("the Board") is a non-profit organization established on August 1, 2002 through the approval of the Alberta Milk Plan Regulation under the authority of the Marketing of Agricultural Products Act of Alberta. Alberta Milk is subject to supervision by the Alberta Agricultural Marketing Council, which is appointed by the Government of Alberta, for supervisory and enforcement purposes in respect of Alberta producer boards and marketing commissions. Pursuant to Section 149(1)(e) of the Income Tax Act Alberta Milk is exempt from income tax.

The Board's purpose is to promote the viability and sustainability of the Alberta Dairy Industry through programs, policies and services.

2. SIGNIFICANT ACCOUNTING POLICIES:

Basis of presentation

The Board has prepared these financial statements in accordance with Canadian Accounting Standards for Not-for-Profit Organizations (ASNPO).

Revenue Recognition

Alberta Milk follows the deferral method of accounting for contributions.

Funds collected in the operation of price equalization pools or under various agreements are restricted contributions subject to externally imposed stipulations that specify the purpose for which the funds are to be used. Restricted contributions are recognized as revenue in the period in which the related expenses are incurred. These revenue sources include restricted revenue - equalization, hauling fees and quota exchange sales. Grant revenue which include restricted contributions received for future expenses is deferred until the expenses are incurred. Assessment revenue, processor audit recovery and other income is recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Interest revenue is recognized as revenue when earned.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, balances with banks and other institutions, money market funds, mutual funds and term deposits with maturities of three months or less, or able to be cashed on demand.

Inventories

Inventories consisting of clothing and other merchandise are carried at the lower of cost and current replacement value with cost determined using the first-in, first-out method.

ALBERTA MILK

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2017

2. SIGNIFICANT ACCOUNTING POLICIES (continued):

Capital Assets

Capital assets are recorded at cost less accumulated amortization. Amortization is provided using the declining balance method over the estimated useful life of the assets at the following annual rates:

Office furniture and equipment 20% Computer hardware and equipment 20-30% Display booth and tent 20% Software development 30% Vehicles 30% Buildings 5% Consumer displays 5 yrs straight-line

When a capital asset no longer has any long-term service potential to the Board, the excess of its carrying amount over any residual value is recognized as an expense in the statement of operations.

Employee Future Benefits

For the Board's defined benefit pension plan, the defined benefit obligation is determined using the most recent actuarial valuation report prepared for funding purposes.

Plan assets are measured at fair value.

The Board recognizes the plan's funded surplus, which is the net amount of the defined benefit obligation and the fair value of plan assets, on the statement of financial position.

Actuarial gains and losses and past service costs are included in the cost of the plan for the year in the statement of operations.

The Board only recognizes a defined benefit asset on the statement of financial position to the extent it is expected to be recoverable. A valuation allowance is recognized for any excess of the adjusted benefit asset over the amount expected to be recoverable as pension re-measurement directly in the statement of change in net assets.

Due from Processors, Producers and Others

Section 29(6) of the Alberta Milk Marketing Regulation allows the Board to "set out all amounts payable among processors, producers and Alberta Milk ... and pay the net amounts." As a result, amounts due from processors, producers and others were netted against amounts owing to processors, producers and others.

ALBERTA MILK

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2017

2. SIGNIFICANT ACCOUNTING POLICIES (continued):

Financial Instruments

Initial measurement The Board's financial instruments are measured at fair value when issued or acquired. For financial instruments subsequently measured at cost or amortized cost, fair value is adjusted by the amount of the related financing fees and transaction costs. Transaction costs and financing fees relating to financial instruments that are measured subsequently at fair value are recognized in operations in the year in which they are incurred.

Subsequent measurement At each reporting date, the Board measures its financial assets and liabilities at cost or amortized cost (less impairment in the case of financial assets), except for equities quoted in an active market, which must be measured at fair value. The Board has also irrevocably elected to measure its investments in bonds at fair value. All changes in fair value of the Board's investments in equities quoted in an active market and in bonds are recorded in the statement of operations. The financial instruments measured at amortized cost are cash, due from processors, producers and others, accounts receivable, accounts payable and accrued liabilities and long-term debt.

For financial assets measured at cost or amortized cost , the Board regularly assesses whether there are any indications of impairment. If there is an indication of impairment, and the Board determines that there is a significant adverse change in the expected timing or amount of future cash flows from the financial asset, it recognizes an impairment loss in the statement of operations. Any reversals of previously recognized impairment losses are recognized in operations in the year the reversal occurs. Use of Estimates

Management reviews the carrying amount of items in the financial statements at each balance sheet date to assess the need for revision or any possibility of impairment. Many items in the preparation of these financial statements require management's best estimate. Management determines these estimates based on assumptions that reflect the most probable set of economic conditions and planned courses of action.

The estimates are reviewed periodically and adjustments are made to net income as appropriate in the year they become known.

Items subject to significant management estimates include allowance for uncollectible accounts receivable, amortization of capital assets, valuation of employee future benefits, and valuation of contingencies. ALBERTA MILK

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2017

3. CASH AND INVESTMENTS:

2017 2016

Cash and cash equivalents $ 9,398,108 $ 9,327,089 Fixed income 1,516,275 2,003,469 Equities quoted in an active market 1,410,592 946,259 Mutual funds quoted in an active market 233,550 128,045

$ 12,558,525 $ 12,404,862

Interest income includes the following: 2017 2016

Net increase in fair value of investments $ 28,112 $ 27,145 Interest earned on scholarship investments 2,343 4,552 Interest earned on pooling funds 117,004 93,323 Interest and dividends earned on corporate funds 119,870 51,647 Interest rebated to producers (117,004) (93,323)

$ 150,325 $ 83,344

4. CAPITAL ASSETS:

2017 2016

Accumulated Net Book Net Book Cost Amortization Value Value

Display booth and tent $ 91,404 $ 77,255 $ 14,149 $ 17,686 Office furniture and equipment 352,854 296,964 55,890 69,047 Consumer display 235,159 166,778 68,381 - Computer hardware 1,318,822 1,009,928 308,894 104,882 Computer software 1,393,950 1,012,353 381,597 437,563 Vehicles 39,070 35,788 3,282 4,689 Building 2,107,443 966,315 1,141,128 1,201,187 Land 385,175 - 385,175 385,175 Total $ 5,923,877 $ 3,565,381 $ 2,358,496 $ 2,220,229 ALBERTA MILK

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2017

5. DEFERRED CONTRIBUTIONS:

Deferred contributions represent unspent resources externally restricted for price equalization.

2017 2016

Contributions received $ 605,956,651 $ 592,183,026 Transferred to revenue (607,726,404) (588,474,095) Increase (decrease) during the year (1,769,753) 3,708,931 Deferred contributions at beginning of year 30,519,641 26,810,710 Deferred contributions at end of year $ 28,749,888 $ 30,519,641

Under Section 29 of the Alberta Milk Marketing Regulation, the Board operates a price equalization pool whereby all revenues generated from the processing and sale of milk within Alberta are shared by all Alberta producers in accordance with their quota holdings. The Board, acting as agents to processors, performs the administrative responsibility for payment to Alberta dairy producers. This payment represents each producer's share of the pool less associated marketing expenses.

The Board has an arrangement with the signatories of the National Milk Marketing Plan. This arrangement provides for the pooling of revenues from sales of milk components in special classes of milk used to service domestic and external markets. The Special Class Pool is administered by the Canadian Dairy Commission (CDC). Based on each province's monthly special class sales, the CDC will either distribute revenue or require a contribution to the national revenue pool.

Effective March 1, 1997, four provinces (Alberta, British Columbia, Saskatchewan, and Manitoba) and the Canadian Dairy Commission entered into the Western Milk Pooling Agreement. The purpose of the agreement was to extend the pooling arrangements within each of the provinces so that all milk revenue is pooled among producers in all four provinces, as if the western provinces constituted a single market. Based on each province's monthly sales, the CDC either distributed revenue or required a contribution to the Western Milk Pool.

6. DEFERRED GRANTS:

Deferred grants represent unspent resources consisting of the following:

2017 2016

Contributions received $ 665,821 $ 247,074 Recognized as revenue (676,491) (264,229) Decrease during the year (10,670) (17,155) Deferred contributions at beginning of year 396,907 414,062 Deferred contributions at end of year $ 386,237 $ 396,907 2

ALBERTA MILK

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2017

7. LONG-TERM DEBT:

2017 2016

Mortgage payable - bearing interest at prime minus 0.25%, 2.45% as of July 31, 2015 repayable in monthly principal installments of $7,500 plus interest, maturing December 2017. Secured by the land and building with a net carrying amount of $1,586,361. $ - $ 60,000

Less portion due within one year - 60,000

Total long-term debt $ - $ -

8. ASSESSMENT REVENUE:

The Board collected the following producer assessments during the year:

2017 2016

Administrative $0.50/hl $0.50/hl Marketing, Nutrition, Education $1.50/hl $1.50/hl Research $0.05/hl $0.05/hl Hauling $3.09/hl $3.09/hl Hauling yard charge per pickup $21.82 $21.82

9. COMMITMENTS:

The Board rents office equipment under long-term operating leases. Future minimum annual lease payments are as follows:

2018 $ 23,480 2019 23,480 2020 21,380

Total $ 68,340 ALBERTA MILK

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2017

9. COMMITMENTS (continued):

The Board has made the following commitments to the Dairy Farmers of Canada:

(a) $1.36 per hectolitre on milk produced during the year.

In January, 2017 Alberta Milk transferred our marketing and nutrition education activities to Dairy Farmers of Canada to create greater efficiencies and increased value for the producer funded marketing and nutrition education activities. In previous years Alberta Milk disclosed commitments for media purchases. Effective January 2017 this commitment is the responsibility of Dairy Farmers of Canada. In recognition of this change in responsibility Alberta Milk transferred $1,700,000 of net assets to Dairy Farmers of Canada during the year.

(b) membership fees of $270,508.

The Board has committed $468,631 under contractual agreements for database development in association with a National Information Technology Aggregation project over the next year.

The Board has a funding commitment to several universities for academic advisor positions in the amount of $560,000 to be disbursed in annual installments over a five year period.

10. HAULING FEES :

2017 2016

Paid by producers $ 25,626,082 $ 24,612,880 Processor recoveries 1,448,754 1,805,973 Total for the year $ 27,074,836 $ 26,418,853

Cost per hectolitre $ 3.66 $ 3.83

Producers were assessed a volume fee of $23,251,201 (2016 - $22,227,639) as well as $2,374,881 (2016 - $2,385,241) in yard stop charges. A surplus of $1,635,508 (2016 - $1,266,656) resulted from a lower intra-provincial milk transportation costs than anticipated. This surplus will be used to offset next year's producer assessments.

11. PENSIONS:

Effective January 1, 2007 the Alberta Milk Employees' Pension Plan ("the Plan") was established on behalf of employees of Alberta Milk. Prior to January 1, 2007 certain members had accumulated retirement benefits under the Western Canadian Dairy Herd Improvement Services Association Employees Pension Plan ("the Predecessor Plan"). As of January 1, 2007 the Predecessor Plan benefits for such members, and the liability thereof, have been transferred to the Plan and shall be paid in accordance with the terms of the Plan. The Plan is a defined benefit plan and specifies the amount of the retirement benefit to be received based on the length of service and final average earnings. The most recent funding recommendation for the Plan was completed as at December 31, 2015 and has been updated for current assumptions in the actuarial report dated September 6, 2017. ALBERTA MILK

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2017

11. PENSIONS (continued):

2017 2016

Accrued benefit obligation Balance at beginning of year $ 3,730,000 $ 3,214,000 Current service cost 254,000 280,000 Interest cost 197,000 196,000 Expected benefits paid (464,000) (171,000) Actuarial loss (gain) - 211,000 Accrued benefit obligation (ABO) at end of year $ 3,717,000 $ 3,730,000

Plan assets Fair value at beginning of year $ 4,390,000 $ 4,028,000 Actual return on plan assets 382,000 148,000 Employer contributions 155,000 254,000 Employees' contributions 113,000 131,000 Actual benefits paid (464,000) (171,000) Fair value at end of year $ 4,576,000 $ 4,390,000

Reconciliation of funded status Accrued benefit obligation - end of year $ (3,717,000) $ (3,730,000) Fair value of plan assets - end of year 4,576,000 4,390,000 Funded status - plan surplus $ 859,000 $ 660,000

Accrued benefit obligation not funded $ - $ -

Net benefit plan cost Current service cost (employer portion) $ 141,000 $ 149,000 Interest cost 197,000 196,000 Expected return on plan assets (225,000) (238,000) Amortization of net actuarial loss (157,000) 301,000 Net benefit plan cost $ (44,000) $ 408,000

Losses in year - to be recognized in net assets Actuarial asset experience gain (loss) $ 157,000 $ (90,000) Actuarial (loss) on ABO - (211,000) Losses in year $ 157,000 $ (301,000) ALBERTA MILK

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2017

11. PENSIONS (continued): 2017 2016

Actuarial Assumptions Discount rate - beginning of year 5.25% 5.75% Discount rate - end of year 5.25% 5.25%

Expected return on plan assets 5.25% 5.75%

Rate of compensation increase - beginning of year 3.75% 4.00% Rate of compensation increase - end of year 3.75% 3.75%

Inflation rate - beginning of year 2.25% 2.50% Inflation rate - end of year 2.25% 2.25%

Distribution of the total market value of the fund by major asset category Canadian equities 27.9% 31.9% International equities 14.4% 14.6% U.S. equities 15.7% 16.1% Debt securities 38.1% 35.7% Cash and other 3.9% 1.7%

Total 100.0% 100.00% ALBERTA MILK

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2017

12. QUOTA EXCHANGE:

The Board operated a quota exchange each month. Producers submit bids to purchase quota or offers to sell quota. The exchange cleared each month at the level where volumes offered for sales and volumes requested to purchase are the smallest.

13. INTERFUND TRANSFERS:

The research and marketing producer assessments rates per hectolitre are authorized by the Alberta Milk Marketing Regulation and as such, any associated net assets have been set aside by the Board as internally restricted net assets to be used to fund future marketing and research activities. The Board has also set aside internally restricted net assets for the operation of the quota exchange. These net assets result from previous cash surpluses generated from the operation of the quota exchange and are to be used to manage any potential risk associated with a producer non payment for quota purchases. The Scholarship internally restricted net assets are to be used to provide future scholarships to post secondary students in support of the dairy industry.

In 2017, the Board transferred $91,998 from the Unrestricted net assets into the Research net assets to cover administration costs.

14. FINANCIAL INSTRUMENT RISKS:

The Board's main financial instrument risk exposure is detailed as follows:

Credit risk The Board has determined that the financial assets with credit risk exposure are accounts receivable and due from processors, producers and others since failure of any of these parties to fulfil their obligations could result in significant financial loss for the Board. There was no significant change in exposure from the prior year.

Interest rate risk Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Board is exposed to interest rate risk with respect to investments in bonds; however the Board has determined that it is not exposed to a significant amount of interest rate risk. There was no significant change in exposure from the prior year.

Other price risk The Board is exposed to other price risk on its investments in equities quoted in an active market since changes in market prices could result in changes in the fair value of these investments. There was no significant change in exposure from the prior year.

Liquidity risk The Board's liquidity risk represents the risk that the Board could encounter difficulty in meeting obligations associated with its financial liabilities. The Board, is therefore, exposed to liquidity risk with respect to its accounts payable and accrued liabilities and mortgage payable. There was no significant change in exposure from the prior year. Schedule I ALBERTA MILK

SCHEDULE OF REVENUE AND EXPENSES BY GOAL

FOR THE YEAR ENDED JULY 31, 2017

2017 Budget 2016 (unaudited) (unaudited) (unaudited)

REVENUES: Administrative Assessment $ 3,703,569 $ 3,631,756 $ 3,625,233 Class 1 Market Recovery 1,678,559 1,561,443 1,763,439 MNE Assessment 11,110,677 10,895,268 10,875,667 Research Assessment 370,357 363,176 362,523 Hauling Fees 27,074,836 27,267,220 26,418,853 Restricted Revenue - Equalization 607,726,404 566,553,935 588,474,095 Interest Revenue 150,325 142,290 83,344 Grant Revenue 676,491 625,592 264,228 Sponsorship Revenue 91,089 98,052 41,692 Program Revenue 206,922 225,892 154,364 Processor Audit Recovery 131,659 120,000 129,872 Quota Lease 608,268 587,000 600,875 Other Income 258,007 205,760 267,605

TOTAL REVENUES 653,787,163 612,277,384 633,061,790 EXPENSES BY GOAL/PROGRAM (Schedule II) 653,166,123 613,112,074 632,874,010

EXCESS OF REVENUE OVER EXPENSES BEFORE QUOTA EXCHANGE 621,040 (834,690) 187,780

QUOTA EXCHANGE: Sales and interest revenue 52,049,961 48,000,000 41,953,106 Purchases of quota 52,049,961 48,000,000 41,953,106

Net quota exchange - - -

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENSES FOR THE YEAR $ 621,040 $ (834,690) $ 187,780 Schedule II ALBERTA MILK

SCHEDULE OF EXPENSES BY GOAL

FOR THE YEAR ENDED JULY 31, 2017

2017 Budget 2016 (unaudited) (unaudited) (unaudited)

EXPENSES BY GOAL/PROGRAM: Adequate supply of dairy products: Manage Alberta Milk Supply $ 213,356 $ 205,194 $ 245,833 Manage an effective quota system 27,496,798 27,550,445 26,821,984 Policy Development: Work with stakeholders 738,597 795,212 589,406 Improve industry competitiveness 165,099 191,369 197,869 Health and Welfare of dairy industry 216,771 210,560 150,713 Sustainable environmental practices 66,864 242,580 26,242 Member Services 388,790 425,572 438,344 ProAction 169,066 320,723 146,416 Increase dairy product consumption: Increase milk consumption in adult women 7,642,123 5,390,700 5,455,183 Increase milk consumption in youth 2,057,799 4,404,771 3,966,727 Work with health educators 272,328 407,569 491,814 New Product Development 76,109 110,000 111,709 Promote and participate in research: Maximize research funding 91,997 117,770 71,014 Dairy research to benefit dairy farmers 1,037,395 899,400 1,030,813 Manage fiscal and human resources: Administer regulations 6,844 27,000 28,760 Manage financial and human resources 653,710 785,736 596,608 Accurate producer payment 608,123,271 566,808,935 588,800,337 Corporate costs 2,718,494 3,228,423 2,762,587 Develop and attract delegates/directors 52,901 43,000 77,493 Communicate with members, stakeholders and consumers: Stakeholder Communication 450,644 452,883 462,010 Extention and Communication 188,299 286,507 159,932 Create visual awareness 338,868 207,725 242,216 Total Expenses $ 653,166,123 $ 613,112,074 $ 632,874,010 1303-91 Street SW Edmonton, Alberta T6X 1H1 toll-free. 1-877-361-1231 albertamilk.com