LIC Annual Meeting Presentation

Continued investment in
premium genetics to breed
the best cows, faster
Annual meeting – 20 October 2022

LIC 2022 Annual Meeting
Using the Online Platform
Voting card
Question box
Annual meeting – 20 October 2022
Continued investment in
premium genetics to breed
the best cows, faster
Starts Oct 20th at 12:00 PM NZDT
Continued investment in
premium genetics to breed
the best cows, faster
Annual meeting – 20 October 2022
2

LIC 2022 Annual Meeting
Welcome
Murray King — Board Chair3

LIC 2022 Annual Meeting
Meeting Agenda
1. Business highlights
2. Strategy & commitments
3. Financial overview
4. Breeding the best

cows, faster
5. Honoraria report
6. Meeting resolutions
7. General business
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LIC 2022 Annual Meeting
Business
highlights
Murray King – Board Chair5

LIC 2022 Annual Meeting
Premium AB ProductsAnimal Health TestingNew Chief Executive,
David Chin
Business highlights
Increased farmer spend on premium genetics and herd improvement services
is breeding more efficient cows with a lighter environmental footprint.
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LIC 2022 Annual Meeting
The year ahead
LIC’s focus will be on investing in R&D
for the future and delivering on our
commitments to farmer shareholders.
LIC expects underlying
earnings in 2022-23 to be in the
range of $20-26 million.
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LIC 2022 Annual Meeting
Strategy &
commitments
Murray King – Board Chair
David Chin – Chief Executive
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LIC 2022 Annual Meeting
Strategy
Our Farmers
Deepen our understanding of the current
and future needs of all of our farmers.
Animal
Most sustainable & efficient animal.
Highest value products.
Data & Digital
Modernising the animal data
& digital capabilities.
Innovation
Research & development.
Responsive innovation.
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LIC 2022 Annual Meeting
Our three commitments to you
123
Operational
excellence
Faster genetic
improvement
Software reliability
and performance
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LIC 2022 Annual Meeting
We need to measure
it to manage it
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LIC 2022 Annual Meeting
Operational
excellence
We commit to getting the basics right and delivering for you, on time, every time.
Provide a result for
99.9% of all cows
within 72 hours
5-week turnaround
time for test results
(from booking week)
99.9%


70%
HERD TESTING GENEMARK
5
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LIC 2022 Annual Meeting
Faster genetic
improvement
We commit to having your back when it comes to helping you meet the environmental
challenges you face, in particular animal efficiency, and nitrogen and methane mitigation.
15 BW
increase
per annum
20BW
PREMIER SIRES BULL TEAM GENETIC GAIN
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LIC 2022 Annual Meeting
Software performance
and reliability
We commit to being better at delivering our software to you. We renew our commitment
to continuous improvement and transparency around delivery of new features.
All features
in MINDA Roadmap
released
98%
MINDA ROADMAP
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LIC 2022 Annual Meeting
Financial
overview
David Hazlehurst - Chief Financial Officer15

LIC 2022 Annual Meeting
Products and servicesSolid dividendR&D investment
Financial overview
Delivering value for our farmers is at the centre of everything we do
and it’s results like this that enable us to do just that.
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LIC 2022 Annual Meeting
Financial Highlights
$
263.2m
Total Revenue from
Continuing Operations
up 5.7% from $249 million
last year
$
385.6m
Total Assets
up 1.2% from $382 million
last year
$
26.7m
Net Profit After Tax (NPAT)
up 16.5% from $22.9 million
last year
$
26.2m
18.43 c per share
Full Year Dividend
Representing 80% of
underlying earnings
$
25.7m
Underlying Earnings*
up 15.3% from $22.3
million last year
$20-26m
Expected Underlying
Earnings*
for 2022-23
Please refer to the full market announcement to read notes about financial information17

LIC 2022 Annual Meeting
Continuing Operations Discontinued Operations
NZ $m
300.0
250.0
200.0
150.0
100.0
50.0
0.0
20182019202020212022
Total revenue
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LIC 2022 Annual Meeting
Data and digital 37%
Buildings, including improvements
and fit outs
33%
Vehicles and other property,
plant, and equipment
24%
Computer hardware, office
furniture/equipment 6%
Reinvesting – Capital approvals
CAPITAL
APPROVALS
$
24.8m
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LIC 2022 Annual Meeting
Investment in research
and development
$18.2 million Investment in R&D representing
6.9% of revenue, up from $17.1 million.
LIC is the one of the largest private
investors in R&D in the primary sector.
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LIC 2022 Annual Meeting
Research and development
LIC’s continued investment in R&D is helping dairy farmers build a better herd.
GeneMarkGenomicsShort Gestation
Length Semen
Johne’s Testing
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LIC 2022 Annual Meeting
Breeding the
best cows,
faster
David Chin – Chief Executive 22

LIC 2022 Annual Meeting
The dairy industry needs to continue to
evolve – for climate change and because of
it. The production efficiency of our national
herd has never been more important.
Consumers expect a more sustainable
approach to farming so we must continue
to improve our environmental credentials.
We’re proud to be part of the solution.
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LIC 2022 Annual Meeting
Herd improvement is what we do
We’re providing farmers with precision genetics and technology
tools to improve their herds and be more sustainable.
GeneticsMilk
Analysis
1:1 support
via nationwide
team
Herd
Management
Software
DNA &
Diagnostic
Testing
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LIC 2022 Annual Meeting
The opportunity: All cows aren’t created equal
The best cows are more
efficient at turning feed into
milk – they produce more and
are more emissions efficient.
BW
Quartile
Animal
Count
Average
BW
Average
kgMS
Average
LWGT BV
Average
FERT BV
Q151,375163518370.8
Q251,37510248637-0.2
Q351,3756046737-1
Q451,375-0.844538.6-2.1
Holstein
Friesian
+73 kgMS (16.4%)
-1.6kg liveweight
BW
Quartile
Animal
Count
Average
BW
Average
kgMS
Average
LWGT BV
Average
FERT BV
Q1146,050208505-4.11.3
Q2146,0501524780.70.5
Q3146,0501104645.2-0.2
Q4146,0484744210.7-1.2
Crossbreed
(FxJ)
+63 kgMS (14.2%)
-14.8kg liveweight
BW
Quartile
Animal
Count
Average
BW
Average
kgMS
Average
LWGT BV
Average
FERT BV
Q118,988252431-50.42.9
Q218,988202404-50.92.2
Q318,988166387-51.21.5
Q418,98887382-51.70.1
Jersey
+49 kgMS (12.8%)
+1.3kg liveweight
Source: Herds recording in MINDA with Herd Test results, 4-8 year old cows, 2020-2021 season (best cow is weighted average kgMS of all Q1 cows).
502
kgMS
The best
cows
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LIC 2022 Annual Meeting
We don’t need more cows — we need the best cows
We’ve made good progress over the years but
to continue on this trajectory we need to sharpen
our focus on breeding the best cows.
2020–212030
502
kgMS
The best
cows
397
kgMS
1950–51
188
kgMS
2000–01
288
kgMS
?
kgMS
Source: New Zealand Dairy Statistics 2020-2021, average cow production.
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LIC 2022 Annual Meeting
The size of the prize for New Zealand —
a profitable and sustainable dairy sector
What it’s worth if we accelerate the rate of genetic gain and only breed the best cows:
Increase cow production
relative to liveweight
Maintain total milk
production from fewer cows
Reduce agricultural
emissions
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LIC 2022 Annual Meeting
At an individual farm level there can be many
variable factors but it is conceivable that by
2030 your whole herd could be performing at the
level of your top 25% cows today.
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LIC 2022 Annual Meeting
Breeding the best cows, faster is key to solving
the challenge of being profitable and sustainable
Farmers using
LIC genetics are
already doing this
– they’ve almost
doubled the speed
of improvement
in their herds over
the last decade.
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LIC 2022 Annual Meeting
We’re helping farmers breed the best
cows and get the best from them.
The best
cows
Herd testing –
accurately identify how
your cows are performing
Genomic evaluation –
confidently select your highest
genetic merit heifers to join
the herd and breed from
Parentage verification – take
the guesswork out of matching
calves to parents, adding
precision and selection accuracy
to your breeding programme
Sexed semen – generate
more heifer replacements from
your best-performing animals
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LIC 2022 Annual Meeting
We’re focussed on new solutions for the future too
LIC is one of the largest investors in R&D in the primary sector – $18 million in FY21 (6.9% of revenue)
Methane
Research
Identifying a genetic
link between a bull
and the amount
of methane it
produces, so
farmers can breed
low methane-
emitting cows
Genomic
selection and
evaluation
Utilising cutting-
edge DNA
technology and
genomic science
to help farmers
breed the best
Resilient Dairy
Programme
Utilising disease
management
technologies and
genomic advances
to enhance the
health and wellbeing
of the national dairy
herd and improve
cow productivity
Portfolio
approach with
partners
Exploring
technology options
Slick Gene
Research
and Trial
Enabling farmers
to breed more heat
tolerant cows
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LIC 2022 Annual Meeting
Breeding the best cows, faster is key to helping farmers
solve the challenge of being profitable and sustainable.
Farmers, industry and Government are aligned on the
importance of improving the efficiency of the national dairy
herd to achieve our environment goals.
We’ve got this.
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LIC 2022 Annual Meeting
Honoraria
report
Ian Brown — Honoraria Committee Chair33

LIC 2022 Annual Meeting
Meeting
resolutions
Murray King — Board Chair34

LIC 2022 Annual Meeting
Resolution 1:
Approval of LIC Directors’
Remuneration
To receive and consider the LIC Honoraria Committee’s
recommendation as to Directors’ remuneration, and if
thought fit, to resolve by way of ordinary resolution to:
“Approve the total remuneration of all nine Directors
to be $664,000 per annum”
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LIC 2022 Annual Meeting
Resolution 1:
Director Remuneration
CurrentRecommended$ Increase% Increase
Chair$123,600$132,000$8,4006.80%
Director$54,000$59,000$5,0009.26%
Discretionary Pool*
$60,000$60,000No changeNo change
Total for LIC Board$615,600**$664,000$48,4007.86%
* Maximum pool available for additional duties and specialist skills, including roles as Committee Chairs.
** Based on current Board size of nine Directors. Shareholders approved total remuneration of $669,000 in 2019 for a Board of 10 Directors.
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LIC 2022 Annual Meeting
Resolution 2:
Approval of LIC Shareholder
Reference Group Remuneration
To receive and consider the LIC Honoraria Committee’s
recommendation as to Shareholder Reference Group’s
remuneration, and if thought fit, to resolve by way of ordinary
resolution to:
“Approve the total remuneration of all Shareholder
Reference Group members being increased from
$171,000 to $179,500”
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LIC 2022 Annual Meeting
Resolution 2:
Shareholder Reference Group Remuneration
CurrentRecommended$ Increase% Increase
SRG Chair$35,000$36,500$1,5004.29%
SRG Deputy Chair$16,000$17,000$1,0006.25%
SRG Member$12,000$12,600$6005.00%
Total$171,000$179,500$8,5004.97%
Daily Allowance
Daily Allowance*$320 $350$30 9.38%
* Paid for time spent on extraordinary duties.
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LIC 2022 Annual Meeting
Resolution 3:
To reappoint KPMG as
External Auditor
T
o consider, and if thought fit, to resolve by way of ordinary
resolution to:
“Re-appoint the chartered accountancy partnership KPMG
as the Auditor until the conclusion of the Company’s next
A
nnual Meeting, and that the Directors be authorised to
fix its remuneration”
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LIC 2022 Annual Meeting
Resolution 4:
To elect one Elected Director
for the South Island
To consider, and if thought fit:
“Elect ONE (1) candidate representing the South Island, as
an Elected Director to the Board of Directors with effect from
the conclusion of this Annual Meeting”
Note: That only shareholders in the South Island are eligible to vote on this resolution40

LIC 2022 Annual Meeting
Resolution 4:
To elect one Elected Director for
the South Island
Siobhan O’MalleyCorrigan SowmanVictoria Trayner
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LIC 2022 Annual Meeting
Resolution 5:
To ratify the re-appointment of
Tim Gibson as an Appointed Director
To consider, and if thought fit, to resolve by way of ordinary
resolution to:
“Ratify the re-appointment of Tim Gibson as an
Appointed Director for a term expiring at the
conclusion of the third Annual Meeting following this
Annual Meeting (approximately three years)”
Tim Gibson
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LIC 2022 Annual Meeting
Resolution 6:
To elect two members of the Shareholder
Reference Group for the Upper North Territory
To consider, and if thought fit:
“Elect TWO (2) candidates from the Upper North
Territory to the Shareholder Reference Group with
effect from the conclusion of this Annual Meeting”
43
Note: That only shareholders in the Upper North Island Territory are eligible to vote on this resolution

LIC 2022 Annual Meeting
Mark BennsAleisha BroomfieldMurray Hawkings
Resolution 6:
To elect two members of the Shareholder
Reference Group for the Upper North Territory
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LIC 2022 Annual Meeting
Resolution 7:
Re-election of Scott Montgomerie
to the Honoraria Committee
To consider, and if thought fit, to resolve by way of ordinary
resolution to:
“Approve the re-election of Scott Montgomerie
to the Honoraria Committee, with effect from
the conclusion of this Annual Meeting”
Scott Montgomerie
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LIC 2022 Annual Meeting
Resolution 8:
Re-election of Shirley Trumper to the
Honoraria Committee
To consider, and if thought fit, to resolve by way of ordinary
resolution to:
“Approve the re-election of Shirley Trumper
to the Honoraria Committee, with effect from
the conclusion of this Annual Meeting”
Shirley Trumper
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LIC 2022 Annual Meeting
General
business
Murray King — Board Chair47

LIC 2022 Annual Meeting
Q & A
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LIC 2022 Annual Meeting
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LIC Annual Meeting
Thursday 20 October 2022
Chairman’s and Chief Executive’s Address

Address by the Chair, Murray King

Good afternoon everyone and welcome to LIC’s annual meeting. I’m Murray King, Chair of LIC.
Thank you for attending today’s meeting. I’d like to acknowledge that this is a busy time for our
farmers – both this time of year and this time of the day - so I’d like to thank you for being here, we
really appreciate your attendance.
Before we start the proceedings, I have a small number of housekeeping matters to cover.
There are eight resolutions to be considered today - a poll will be held on each one. Resolutions four
and six are elections for the Board of Directors and Shareholder Reference Group. Shareholders in the
South Island can vote on resolution four. Shareholders in the Upper North Island can vote on
resolution six. We use the First Past the Post system for Board of Directors and Shareholder Reference
Group elections, this means that candidates receiving the highest number of votes will be appointed.

All shareholders can vote on all other resolutions - one, two, three, five, seven and eight. These are
ordinary resolutions and require 50 per cent approval. Results will be announced soon after the
conclusion of the meeting.

If anyone joining online has any items of general business or questions they would like to ask, please
send them via the “ask a question” button at any time throughout the meeting. These will be collated
by the team and answered in the general business section towards the end of the meeting. For those
in the room, please raise your hand to ask a question during the general business section. We may
take a few minutes to collate and review these before general business.

We have designed the procedures for today’s meeting so that those online have the same opportunity
to participate as those in the room with us. I understand that these meeting formats can cause some
complications with voting and asking questions so before we officially begin the meeting, I would like
to cover a few points regarding using the online platform.

To vote you will need your shareholder number provided by Link Market Services. You can vote
using the online platform, please click on the “Get a Voting Card” button and enter your shareholder
number. Voting remains fully confidential, no one on the call will see your vote. To ask questions
using the online platform, please click on the “Ask a Question” button. You will then need to enter
your shareholder number. We may take a few minutes to collate and review these before general
business. It’s worth noting that your questions will only be visible to myself and the team who will be
moderating and answering the questions.

The Notice of Meeting has been circulated to all shareholders and is taken as read. With a quorum
present, I now declare the meeting open.
Firstly, I’d like to extend a warm welcome to fellow shareholders, LIC staff, The Shareholder
Reference Group, Ian Brown from the Honoraria Committee as well as LIC’s auditors, lawyers,
bankers and advisors.

Also joining us today is LIC’s CE David Chin, our CFO David Hazlehurst and LIC’s eight Directors - Ben
Dickie, Dr Alison Watters, Gray Baldwin, Matt Ross, Sophie Haslem, Tim Gibson, Candace Kinser and
Ken Hames.

I’d like to take a moment to thank long serving board member Gray Baldwin, who is stepping down
from his role after 10 years serving the co-op. Gray has been an asset on the Board, helping to guide
us soundly over the last 10 years, providing a wealth of knowledge and expertise in the sector. Gray
has always kept farmers and their animals at the forefront of everything he did and he leaves a strong
legacy for years to come.

I’d also like to take this opportunity to thank former Chief Executive Wayne McNee. David inherits a
strong financial foundation from his predecessor, and I’d like to acknowledge that the strength of this
result is partly attributable to Wayne and his dedication to the business.

I have apologies from the following Shareholder Reference Group members - Mark Benns, Jared
Clarke, Phil Lowe, Christine Macbeth and Johan van Ras.

Here’s the agenda for today’s meeting, which I will run you through briefly. I will cover our business
highlights and outlook for the year ahead. David Chin and I will then recap on strategy and present
how we are tracking when it comes to delivering on these commitments.

I’ll then hand over to CFO David Hazlehurst who will present a financial overview and outline our
spend on research and development.

Our CE David Chin will then talk to his priorities, including herd improvement, the results some
farmers are achieving and LIC’s focus on future solutions.

From there Ian Brown, Honoraria Committee Chair will present the Honoraria Report and we will
then move to Voting Resolutions. Finally, we will cover General Business where there will be an
opportunity for Q&A.

I will now give an overview of the business highlights for the year.

Business Highlights

Key highlights for us this year are the uptake of premium genetics and the results they are delivering
on farm, a continued focus on animal health testing and the appointment of our new CE David Chin.

Premium AB products
This year, our result was driven by increased farmer spend on premium genetics and herd
improvement services.

Farmer shareholders know that all cows aren’t created equal and they are investing in solutions to
breed the best cows, faster. During the year, 71 per cent of fresh semen straws used for breeding
replacements were from LIC’s premium bull teams, that’s 2.1 million straws, up from 60 per cent the
year prior (1.8 million straws). Orders for sexed semen almost doubled from the previous year,
exceeding 200,000 straws for the first time.

These breeding decisions will serve farmers well into the future to build a more profitable and
sustainable dairy sector to help the industry reach its climate goals.

Animal health testing
It’s also pleasing to see that farmers are investing more heavily in some of the non-genetics products
we offer, such as milk pregnancy testing and the Johne’s test. LIC commercialised the Johne’s Disease
test in the 2015/2016 season and it’s now one of our most popular animal health tests with close to
one million samples tested, up 28 per cent from last year. Overall animal health tests were up 21 per
cent. We’re proud of the significant growth we have seen in this area of the business, it has grown to
account for $10 million in revenue.

Chief Executive Appointment
David Chin’s appointment as CE in January was an exciting milestone for us. David’s appointment
continues a legacy of passionate and experienced people leading our business. David has a natural
empathy for people, knows our farmers well and knows the business having led several key strategic
initiatives including the recent transformation programme.

Importantly, David was heavily involved in the refinement of LIC’s strategy. The implementation of
this strategy has been a key focus for the co-op under David’s leadership, and will continue for years
to come. I am confident that David’s leadership, combined with his deep operational knowledge and
passion for delivering value for our farmers will serve the co-op very well.

The year ahead
Over the next 12 months we will continue to focus on new and existing research projects with an aim
to deliver sustainable advantage to our dairy industry.

We expect underlying earnings in 2022-23 to be in the range of $20-26 million.

Delivering on our commitments to farmer shareholders remains a key focus for 2022/23. We will
give a quick recap on strategy and then present to you delivery against those commitments.

Strategy and Commitments

Creating value for our farmers is at the heart of everything we do. Our refined strategy, announced
last year, focuses us on building a strong sustainable co-operative, leading the world in our field and
delivering outstanding value for our customers, shareholders and industry, this year, in 5 years and
for another 100 years.

We will create value through a focus on four key areas - Our farmers, Animal, Data & digital and
Innovation.
We would quickly like to cover a few examples from the past year that show our strategy in action.
Sitting in the Data & Digital and Partnership segments, we have partnered with six leading cow
wearable technology suppliers to integrate our MINDA herd management system with their systems
meaning farmers no longer have to double-handle data. MINDA continues to evolve we will cover
this shortly when speaking about measuring our commitments.

Sitting across a number of segments in the strategy, including Innovation, Animal and Partnerships is
the methane research programme which has confirmed that bulls’ genetics play a role in how much
methane they emit. We are in the second year of the programme and this year methane emissions
are being measured from approximately 300 young bulls from LIC and CRV’s 2022 Sire Proving
Scheme.

Genomics, which also aligns to several sections in the strategy, remains a key focus which will enable
us to continue delivering value for our farmers. The Board remains 100% committed to genomics
and this is reflected in our investment in the technology over the past 12 months.

We continue to focus on delivering on the three commitments made in our strategy, these include
Operational excellence, Faster genetic improvement and Software reliability and performance.

Our farmers rightly ask how they can hold us accountable for delivering on the commitments – this
has been a priority for us this year. Internal governance groups were formed to develop measures
and targets for each commitment and to monitor progress. The measurements provide our business
with clear goals and expectations for what delivering on our commitments looks like. They are not
about perfection, they are the improvement we are aiming for.

We’re pleased to report that we have achieved the majority of our targets this year – and exceeded
our targets in some areas. We remain focused on meeting the targets that we have not yet achieved
and will continue to work towards achieving those in the coming year.

In the interest of time, we won’t run through all the results today, but we will share an example from
each commitment. The full suite of commitments and our progress against them is outlined in our
latest Sustainability report and on the website.

For operational excellence we committed to getting the basics right and delivering for you, on time,
every time. One of the measurements of this commitment is for Herd Testing and providing a result
for 99.9% of all cows within 72 hours, we’re pleased to report that we have achieved this target.
Another measurement of this commitment was to achieve a 5-week turnaround time for GeneMark
tests (from booking week), we have achieved 70% of this goal, we recognise we must improve on this
number to deliver on this commitment.

For faster genetic improvement we committed to having your back when it comes to helping you meet
the environmental challenges you face, in particular animal efficiency, and nitrogen and methane
mitigation. One of the measurements of this commitment is to achieve a 15 BW increase per annum
for our premier sires bull team, we achieved 20 BW.
For software performance and reliability we committed to being better at delivering our software to
you and renewed our commitment to continuous improvement and transparency around delivery of
new features. One of the measurements of this commitment is to deliver all features in the MINDA
roadmap, we released 98% of these, meaning we have not fully achieved our target, this will be a
focus for the year ahead.
That is just a snapshot of the progress we have made this year. We encourage you to head to the LIC
website to view the measurements and achievements in their entirety.

While these metrics have been recognised as important to farmers and these targets are where we
believe we can improve and make a difference, we know that the needs of farmers can change. Based

on how we’re tracking and the needs of our farmer shareholders, the measurements and targets will
be reviewed and updated in the future.

We will now pass on to David Hazlehurst to reflect on our performance in Financial Year 2021/22.

Financial Overview, CFO, David Hazlehurst

Thank you. We are proud to report another strong financial result this year. Delivering value for our
farmers is at the centre of everything we do and it’s results like this that enable us to do just that -
through herd improvement products and services, a solid dividend and importantly, the right R&D
investment to keep their herds profitable and sustainable into the future.

This year we reported:
• Net Profit After Tax (NPAT) was $26.7 million, this was up 16.5% last year
• A dividend of $26.2 million, or 18.43 cents per share
• Underlying Earnings of $25.7 million, this was up 15.3% last year
• Expected Underlying Earnings in the range of $20-26 million
• A strong balance sheet with no debt at year-end and total assets $385.6 million - up 1.2%
• Total Revenue from Continuing Operations was $263.2 million - up 5.7%.

Several key on-farm drivers are impacting the revenue uplift demonstrating continued farmer
confidence in LIC’s products and services. Some of these products and services include
LIC’s premium genetics, Herd Testing, GeneMark and Johnes and other animal health testing.

Capital Approvals
Capital approvals demonstrate the areas where we are reinvesting into the business. 37 per cent of
our spend went towards data and digital. This includes investment into technology and data, including
MINDA projects, and software and server upgrades. We will continue to drive investment in this
category into the future.

33 per cent of our spend covered buildings, including improvements and fit outs. Some noteworthy
investments here include scoping upgrades to the Shannon Building where majority of our semen
processing and despatch takes place as well as an upgrade of the Invercargill Herd Testing depot.
These are both projects that will continue to deliver value to our farmer shareholders.

24 per cent of our spend went towards vehicles and other property, plant, and equipment. This
includes investment into our Herd Testing fleet and the ongoing transition of our vehicle fleet to
electric vehicles wherever practical. We are replacing approximately 10 fuel-based vehicles with EVs
each year and currently approximately 26 per cent of our vehicle fleet is either hybrid or full EV.

This also includes a significant investment in new equipment to increase our herd testing capacity in
the South Island.

Research and development
Investment in R&D was $18.2 million (6.9 per cent of revenue), up from $17.1 million the year prior
maintaining our position as one of the largest private investors in R&D in the primary sector.

Murray has touched on some of the current R&D programmes, including animal health and genomics,
and David will cover some of the future focused solutions too, including the slick breeding programme
and methane research programme.

But I wanted to touch on some of the R&D projects that we have commercialised that are delivering
value on farm. Over the last ten years, we have invested $156.4 million into R&D projects, and this
past year has seen some particularly exciting findings. Four key projects are highlighted here and I
will give you an update on a couple of them.

GeneMark
Knowing which cow gave birth to which calf in peak calving can be difficult and prone to error. So
through R&D LIC scientists developed a solution.

Using a small tissue sample from an animal’s ear, our GeneMark service uses DNA technology to match
calves to their parents, ensuring farmers retain their best calves that will grow into highly efficient
milk producers. Approximately 550,000 animals were tested for parentage this past year, and 3.88
million since 2012. In 2021 LIC scientists discovered six genetic variants that impact animal health. We
estimate that these variants could be worth up to $10 million in lost production each year across the
national dairy herd. GeneMark allows farmers to screen for those variants free of charge so they can
be informed of such affected animals in their herd.

Genomics
Having access to young, genetically superior bulls to breed the next generation of dairy cows is the
key to increasing a herd’s production efficiency, but traditionally it has been difficult to get an accurate
prediction of their performance at a young age.

LIC scientists developed a process utilising genomic technology, adding a young bull’s DNA into its
evaluation to provide a much earlier, reliable prediction of the offspring it’ll produce. This ultimately
gives farmers access to the latest elite bulls for artificial breeding at two years of age, instead of five.
We’ve genotyped 250,000 animals for genomic evaluation.

We are achieving high rates of genetic gain contributing significantly to the industry each year - David
Chin will cover these rates and more on the impact of genomics in his address.

Address by the CE, David Chin

Thanks David, it is great to speak with you all today, having been fortunate to get to know many of
you here over the past 15 years.

I came into this role excited to lead a company with a critical role in New Zealand’s dairy industry, and
a great team of dedicated people. Today, it is a pleasure to reflect on what we have achieved this year
and to look ahead to what is next for the co-op.

We have made commitments to our farmers in areas that deliver value to them - as CE a key focus of
mine will be making sure we are meeting those commitments. I believe that breeding the best cows
faster is key to helping farmers meet the challenges of both today and tomorrow, to ensure our
industry is both profitable and sustainable.

Herd improvement is what we do at LIC and we’ve already heard today that farmers are making solid
progress – I’m committed to helping farmers breed the best cows faster.

Herd Improvement

Farmers know that all cows aren’t created equal.

The dairy industry needs to continue to evolve – for climate change and because of it. The production
efficiency of our national herd is key to this. Consumers expect a more sustainable approach to
farming, so we must continue to improve our environmental credentials – and we’re proud to be part
of the solution.

We provide farmers with the precision genetics and technology tools they need to improve their herds
and we’re amplifying this through genomic science to deliver results for farmers at a faster rate.

Our full suite of LIC products is supporting farmers to be more profitable and sustainable, and the 1:1
support they receive via our nationwide team ensures they have access to the best combination of
tools for their situation.

Our tools work and farmers value them, but we are continuously working to see how we can improve
the performance of the national herd.

If you’d like more detail on our herd improvement tools and our progress on them this year, you can
read more in our sustainability report. At the heart of this is our commitment to delivering faster
genetic improvement.

As part of our commitment to faster genetic gain, this year our team of scientists investigated the full
spectrum of MINDA herds in search of the ‘best cows’ and whether a clear correlation existed between
breeding worth (BW) and milk production efficiency.

The research reaffirms that the best cows (with high BW) are more efficient at turning feed into milk,
they produce more and are more emissions efficient. The best cows are generating 502 kgMS, this is
the weighted average of the top quartile from each breed.

If we’re going to help our sector meet its environmental goals, New Zealand farmers must breed more
of those highly efficient cows that sit at the top, and fewer of those who sit at the bottom.
We’ve made good progress over the years but to continue this trajectory we need to sharpen our
focus on breeding the best cows.

Today’s best cows are producing 502 kgMS, compared with an average of 188kgMS in 1950.
Considering that progress, supercharged by the introduction of genomics, it is incredible to think the
kinds of genetic gains we could achieve by 2030. If we accelerate the rate of genetic gain and only
breed the best cows we can increase cow production relative to liveweight, maintain total milk
production from fewer cows and reduce agricultural emissions.

Of course at an individual farm level there can be many variable factors, but we can dare to believe
that by 2030 your whole herd could be performing at the level of your top 25% of cows today
Farmers who utilise the cooperative’s breeding programme have almost doubled the speed of
improvement in their herds over the last decade. They’re breeding better cows faster, and genomics
is the key contributor.

Over the past 30 years we have invested significantly in genomics, and alongside farmers’ herd
management decisions, it has played a key role in the faster rates of genetic improvement we’ve seen.

The increased utilisation of genomics in our breeding programme and increased farmer uptake of
young genomically selected sires has gone hand-in-hand with higher rates of increased genetic gain in
farmers’ herds.

The second part of the equation is getting the best from the best cows. We do this with sexed semen,
herd testing, parentage verification and genomic evaluation. These tools enable farmers to confidently
select their highest genetic merit animals, adding precision to farmer’s breeding programmes and
breeding high quality replacement animals.

We’re focused on future solutions too. As David mentioned earlier we invest heavily into R&D, this is
so we can continue to deliver for farmer’s with better genetics. I would like to talk through some of
the projects that we’re currently working on – we’re pleased with the results these projects are
achieving.

Methane Research
LIC is in its second year of our methane research programme investigating the link between a bull's
genetics and its methane emissions.

The research measures methane emissions from the burps of young bulls set to father the next
generation of New Zealand's dairy cows with an aim of providing Kiwi dairy farmers with the ability to
breed low methane-emitting cows from low methane-emitting artificial breeding bulls.

Over the first year of our trial in which scientists measured burps from 281 bulls set to father the next
generation we have found that bulls genetics do indeed play a role in how much methane a bull emits.
This is promising for our animal’s impact on the environment, but we are equally focussed on ensuring
our animals are resilient to a changing climate.

Slick gene research and trial
We are one step closer to enabling farmers to breed more heat tolerant cows after the trial found that
dairy cows with the ‘slick’ gene are less affected by heat stress compared to their non-slick
counterparts.

The research tells us that if the breeding programme continues to progress as expected, Kiwi farmers
will be able to breed heat tolerant cows by 2029.

This slick gene research is complemented by our genomics works, as instead of requiring years of back-
crossing and progeny testing, with genomics we can generate animals on the ground, evaluate them
quickly and utilise them once they reach maturity.

The updates this year demonstrate how all of LIC’s products, services and R&D investment work
together to ensure we are breeding world class dairy cows. Farmers, industry and the New Zealand
Government are aligned on the importance of improving the efficiency of the national dairy herd.

The results some farmers are achieving show that if we sharpen our focus on herd improvement, we
can continue to have the world’s most efficient dairy herd.

High producing, more emissions efficient cows aren’t just a hope for the future - they exist in the
national herd today and are well within reach for every dairy farmer. We simply need more of them.

I’d like to take this opportunity to thank you all for attending and for all you do for LIC. These results
are made possible by our team who are committed to maintaining New Zealand’s position as the
world’s most efficient dairy herd. I’d also like to thank Murray and the board for their hard work and
support. Finally, thank you to our staff for their hard work over the past year, we look forward to
working together and delivering another great result next year.

I’ll now hand over to Ian Brown, Chair of the Honoraria Committee to present the Honoraria Report.