Contents Area Farmed By Region Farm Staff Structure (Eastern - PDF document

NZ Farming Systems Uruguay Management Presentation – April 2009 1 Contents • Area Farmed – By Region • Farm Staff Structure (Eastern Example) • Development – Key Statistics • Irrigation – Performance • Demonstration Farms Performance (STD) – Physical Metrics – Financial Overview • Progress – Lessons & Observations 2 1

The Farms Total area West 3,749 ha Total area East Total area Centre 19,211 ha 13,407 ha 3 Eastern Structure (E1 – E6) Group Farm Manager Ben Smit Senior Dairy Senior Dairy Senior Dry Stock Senior Calf Rear Senior Animal Manager Manager Manager Manager Health Manager R. Urrestarazú M. De Freitas A. García Austt S. Cresci S. Cresci Dairy 1 Monasterio Dairy 2 Monasterio Dairy Manager Veterinarian Dairy Manager Dry Stock Foreman Guachera Foreman Dairy 4 Dairy 3 Tobay Tobay Veterinarian Dairy Manager Dairy Manager Dry Stock Foreman Guachera Foreman Dairy 5 Dairy 6 Higuerón Dairy Manager Dairy Manager Dry Stock Foreman Don Pepe Dry Stock Foreman 4 2

Eastern Structure cont. (E1 – E6) Group Farm Manager Ben Smit Senior Dairy Manager Veterinarian Raul Urrestarazú Dairy 1 Dairy 4 Dairy 5 Manager Manager Manager Milkers Milkers Milkers (5) (5) (5) Cook Cook Cook Tractorist Tractorist (Share with other dairy) 5 Development – Key Statistics As at March 31, 2009 • 11 Irrigation Dams Constructed. • 15 Centre Pivots – current position c 400 hectares (c 1,600 available by summer 2009). • 26 new and upgraded dairies. • 44 new + 12 upgraded houses. • 5 new + 2 upgraded storage/implement sheds. • Water Bores – providing 420,900litres/hour. • 1,326km Water lines. • 4,979 Water troughs. • 1,790km new fencing. • 464km new races/roading. • 65.6km New power lines (15kv). • 6.2km New power lines (280v). • 49 Transformers. • 22,000ha new pastures – Autumn 2008. • 9,500ha new pastures – Autumn 2009. 6 3

Irrigation • Drought of 2008 – Limited availability of irrigation water. • East 1 – Dairy 3 (Demo farm) only irrigated area from November 2008. • Statistics compelling: Pasture Growth E1 - D3 (Irrigated v Dry) 90 80 70 60 /ha/day 50 M g D 40 K 30 20 10 0 July August September ctober ber December January February March Novem O Growth Rate Irrigated (kgDM/ha/day) Date Growth Rate Non Irrigated (kgDM/ha/day) 7 MENAFRA (W3 – D2) DEMONSTRATION FARM METRICS 2008-09 YTD (March 31st) 8 4

“Los Azahares de Menafra” (the Orange Trees of Menafra) • 1,019 ha property (900 ha Azahares + 119 ha Montesano) • 629 ha milking platform • Split into two dairies: – Dairy 1 – 271ha – Dairy 2 – 357ha (Demonstration Farm) – Dairy 1 (48ashb) constructed and commenced milking August 2007 (kiwi dairy builders). – Dairy 2 (48ashb) locally built and commissioned October 2007. • Both have Read slide pulsation milking plants • 80ha dam constructed January 2008. Insufficient rain to allow irrigation until the late summer of 2009 • Currently 790,000m3 water stored. Capacity 1,500,000 m3 • Centre pivot irrigation (Fockink – Brazil): – Pivot 1 - Dairy 1: 100ha (37%) – Pivot 2 - Dairy 2: 200ha (56%) 9 Management & Staff • Farm Manager: Ricardo Ferrando (Chileano – NZ Experienced) • Assistant Manager (Vet): Julio Ariztia Dairy 1 5 Dairy 2 5 Tractor driver 1 Calving 1 Calf Rearing 2 Cooks 2 Total 16 • Roster System; 4 days off/month 10 5

Climate Annual Maximum Temperature Range 22 - 32 o C Annual Minimum Temperature Range 8 - 18 o C Maximum Soil Temperature / Date 27°C / December Minimum Soil Temperature / Date 9.5°C / June Rainfall 2008 860 mm Average Annual Rainfall 1,300 mm 11 Soils & Fertiliser • Soils are a deep sandy silt or clay, dark black-brown, with imperfect drainage. • Capital fertiliser applied at purchase 2007. Goal to has been to apply 60kg elemental phosphate/ha/year for 3 years to lift Bray P levels from 9 (at purchase) to 20. • P target level already reached (~30 at January 2009). • On going policy more targeted within farm. • Pastures and cereal crops have received a variety of starter fertiliser. Basic policy is to provide 17-22kg elemental phosphate/ha. 12 6

Pastures • Pasture persistence has been problematic. Combination of dry conditions in the autumn of 2008 and the drought of 2009 meant c70% re-grassed in autumn 2009. • Permanent pasture based on fescue/white clover (18/2 kg/ha). Annual/Bi- annual Ryegrass sown alone. • Weed competition high. Chicory (used in past) left out of mix for this reason. • Heat stress problem with perennial persistence. P Ryegrass not viable (unless under irrigation). • Clover broadcast in spring following drilling. • Irrigation to assist in persistence and trialing of variety options. 13 Animal Deaths Category % Cows # 3.1 Calves (dead at calving) * 5.1 Calves (Pre-weaning) 4.3 # Uruguay average is 5% cow deaths. The death rate across NZFSU farms for 6 months to December was 2.4%; Annualised 4.8%. * Reduction in calving problems (and related calf deaths) since the introduction of jersey semen. 14 7

Reproductive Performance • The average for the Menafra milking herd is 65% in calf after 180 days of mating. • Results typical for Uruguay – Below par for NZ. • Indicative of age structure of herd (80+% R3 Yrs), North American genetics, and nature of season. • Jersey semen of NZ origin almost exclusively used. 15 Breeding Plan 2009 • Program 2009: • Dairy herd mating and calving in 3 blocks of 45 days as tabled: Mating Date: June 25 – Aug 8 Aug 29 – Oct 12 Nov 1 – Dec 15 Calving Date: April 3 – May 17 June 7 – July 21 Aug 10 – Sept 23 • Bull selection to be finalised but likely to be 70/20/10 Jersey/Friesian/Crossbred mix of NZ sourced sires. • Heifer mating and calving in 2 blocks of 60 days as tabled: Mating Date: June 10 – Aug 8 Sept 10 – Nov 8 Calving Date: March 19 – May 17 June 19 – Aug 17 • Heifers mated only to Jersey sires of NZ origin. 16 8

Physical Summary & Projections (Dairy 2 Demonstration Data Only): Summary (75% of season): Actual FY Plan W3 - D2 W3 - D2 '08 - Farm: W3 - D2 (March 31) 09 Total Area 357 357 Irrigated Area 200* 200 Irrigated % 56%* 56% Peak Cows/ha 2.40 2.30 Milking Cows (Peak Milked) 850 820 Milking Cows (Average) 670 690 Cows into Vat (Average) 660 690 17 Summary: Actual FY Plan W3 - D2 W3 - D2 '08 - Farm: W3 - D2 (March 31) 09 Performance: Production – (Litres) 2.6million 3.4million Litres/cow 3,900 4,100 Production - Milksolids 182,000 230,000 Milksolids/cow 275 330 Milksolids % 7.05% 6.80% Litres/ha 7,300 9,500 Milksolids/ha 510 650 18 9

Summary: Actual FY Plan W3 - D2 W3 - D2 '08 - Farm: W3 - D2 (March 31) 09 Physical: Total Pasture Supply (kg DM/ha) 7,100 13,700 Pasture Available (kg DM/cow) 3,000 5,200 Supplements (Kg DM/Cow): Silage (kg DM/cow) 440 720 Crop (kg DM/cow) 330 430 Concentrates (kg DM/cow) 940 610 Supplements Produced (Kg DM/ha): Supplements made (kg DM/ha) 1,300 2,100 Nitrogen Use (kg N/ha) 130 150 * Irrigation available only since end of Feb 19 Pasture Growth Season to Date (April 15, 2009) W3- D2 Pasture Growth Data 70 Pasture Growth (kgDM/ha/day) 60 50 40 30 20 10 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Pasture Growth Budget Growth Date • Season to date pasture growth 68% of plan (7.9t/ha v 11.7t DM/ha) • Budget Projections included full year irrigation. 20 10

Make Up of Feed Inputs Season to Date (March 31, 2009) W3 - D2 Pasture (kg DM/ha/day) Silage (kg DM/ha/day) Crop (kg DM/ha/day) Concentrates (kg DM/ha/day) Demand (kg DM/ha/day) 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Jul Aug Sep Oct Nov Dec Jan Feb Mar 2009 21 Financial Menafra – Dairy 2 (STD March 31, 2009) • Season to Date (March 31, 2009): • Production down 2% on planned litres; but up 3% on Milksolids. • Milk sales revenue down 20% on plan. Price/litre 26 v 35c/litre planned. • Total expenses 15% over plan. • Supplementation requiring 420kg DM/cow extra bridging the drought shortfall in feed grown on farm. 22 11

EL MONASTERIO (E1 – D3) DEMONSTRATION FARM METRICS 2008-09 YTD (March 31st) 23 “El Monasterio” (Dairy 3) (The Monastery) • 460 ha milking platform. • Effective area 418ha. • Dairy 48 bale herringbone. Commissioned for milking June 2008. • Westfalia electronic milking plant. • Centre pivot irrigation (Fockink – Brazil): – 520m radius; 85ha (18% of milking platform) • Water sourced from India Muerta dam under a signed contract with COMISACO. Dam provides irrigation water for the major rice growing operations in region. 24 12

Management & Staff • Group Farm Manager: Ben Smit • Farm Manager: Martin De Freitas Foreman 1 Tambero’s (Milkers) 5 Tractor driver 0.5 Cook 1 Total 7.5 • Roster System; 4 days off/month. 25 Climate Annual Maximum Temperature Range 18 - 28 o C Annual Minimum Temperature Range 9 - 19 o C Maximum Soil Temperature / Date 27°C / January Minimum Soil Temperature / Date 9.0°C / June Rainfall 2008 780 mm Average Annual Rainfall 1,120 mm 26 13