Dairy Farmers of America 2021 Social Responsibility Report

2021

SOCIAL RESPONSIBILITY REPORT

2

| 2021 Social Responsibility Report

INTRODUCING THE NERD HERD Introducing the Nerd Herd It takes a herd Our sustainability journey

OUR PLANET Working toward our science-based target On our owners’ farms - Cows are the ultimate recyclers - Renewable energy - Soil health - Animal care At our plants With our partners External reporting

5 5 6 8

11 12 14 16 20 22 24 26 28 30

OUR PEOPLE

33

Keeping employees safe during COVID-19 Investing in our employees every day - Happy. Healthy. Safe. wellness program - Value Integrity program - CoLAB innovation program Supporting our family farm-owners during COVID-19 Providing value to our family farm-owners every day

34 36 37 37 38 40 42

OUR COMMUNITIES

45

Helping those in need - Farmers Feeding Families Fund - Dairy donations - Government advocacy - Disaster response Fostering our culture - Diversity and inclusion - Entrepreneurship

46 46 48 50 51 52 52 54

dfamilk.com/sustainability |

3

THE

FARMER Dairy farmers commit their lives to feeding the world. They care for their herd 365 days a year and produce real, fresh, high-quality dairy for families around the world to enjoy. They also take pride in caring for the land. From regenerative agriculture practices to implementing new technologies, they continue to innovate to help their farms run more sustainably and efficiently.

4

| 2021 Social Responsibility Report

INTRODUCING THE

We’re the Nerd Herd and we’re guiding the dairy industry on its sustainability journey.

It all starts with our dairy farmers. They’re the original stewards of the land, with centurieslong traditions of caring for their animals and farming responsibly. But they need the support of a good herd to continue moving forward. Getting to net-zero takes agronomists, engineers, innovators, nutritionists, researchers, scientists, veterinarians and so many more — a complete herd of individuals.

From farm to dairy case and everywhere in between, together we will shape the future of farming and lead the dairy industry to a more sustainable future.

dfamilk.com/sustainability |

5

IT TAKES A HERD There is no doubt that 2020 was an unprecedented and challenging year. Like business operations in all industries, at Dairy Farmers of America (DFA), we too felt the effects of the COVID-19 pandemic.

But through it all, our commitment to producing dairy responsibly, ethically and sustainably never wavered.

Despite the challenges we faced this past year, our more than 12,500 hardworking family farm-owners on more than 7,000 dairy operations across the country, along with our dedicated essential employees, ensured we continued to feed families across the nation and around the world with all the possibilities of dairy. It takes a herd of dedicated individuals to make sure this happens.

Our mission, and our purpose, is to deliver value to our family farm-owners as a global dairy cooperative. We do that in numerous ways — every day and especially in 2020. Beyond our core business of finding secure markets for our family farm-owners' milk and paying them a competitive price, we offer access to valuable resources and services, invest in manufacturing capabilities that allow us to produce a variety of dairy products and connect our family farm-owners with consumers by sharing their stories. This is our purpose.

This past year was also a year of opportunities and achievements. We introduced the first iteration of our Social Responsibility Report, which detailed our commitment to sustainable practices on the farm, as well as outlined the Cooperative’s sustainability strategy (pg. 8) and our three sustainability pillars: our planet, our people and our communities.

Here are just a few highlights of progress made.

OUR PLANET In 2020, we became the first U.S. dairy cooperative to commit to an industry-led, science-based target to reduce greenhouse gas (GHG) emissions by 30% by 2030. (Read more on pg. 12.) It was a big step in our commitment to sustainably and responsibly produce milk and other dairy products. This target also aligned with the work of the Innovation Center for U.S. Dairy and its goals for the U.S. dairy industry to become carbon neutral or better by 2050. Not only did we commit to this initiative, but we made progress toward achieving it through new projects and pilot programs, including using renewable energy methods, utilizing anaerobic digesters, implementing regenerative agriculture pilot programs and more. We also made clear our commitment to monitoring and validating our progress by partnering with third-party organizations that keep us transparent and accountable for our sustainability efforts.

6

| 2021 Social Responsibility Report

OUR PEOPLE

DFA AT A GLANCE

This year looked unlike any other for the people at the heart of what we do — our family farm-owners and the employees who support them. We committed — and remain committed to — implementing best practices to ensure we maintained safe, healthy work environments while remaining in operation for our family farm-owners, customers and consumers. As well, we continued to invest in our people and provide benefits to support them and ensure their success. During the midst of the pandemic, we closed on the acquisition of a substantial portion of Dean Foods’ assets. The transaction was critical to maintaining milk markets and minimizing disruption in the industry. Now operating as part of our Dairy Brands Division, the processing capabilities of the acquired facilities are critical to our core business and offer opportunities to grow in new and exciting ways.

DFA is a cooperative of local family farmers from across the country. As a Cooperative, we are owned and governed by the family farmers we passionately serve.

OUR COMMUNITIES Thanks to the generosity of our family farm-owners, who were looking to address the challenges local food banks were facing during the pandemic, we established our Farmers Feeding Families Fund through the DFA Cares Foundation. With the fund, we have donated money to rural food banks across the country to help them provide dairy products to families in need. As we continue our community giving efforts, we have launched a refrigeration donation initiative to identify food banks lacking cold storage and provide refrigerators stocked with dairy. (Read more on pg. 46).

As you’ll see in the following pages, the story of our Cooperative from the past year is one of determination to continuously improve our social responsibility efforts, achieve our sustainability strategy and support the people it takes to do it — our herd.

12,500 +

family farm-owners

7

geographic Areas ensure every family farm is represented

farmer-owners represented on DFA’s Board of Directors

48

400 + locations 86 manufacturing

facilities

89%

of our

membership has an

average herd size of cows

98

LEARN MORE Rick Smith

Randy Mooney

President and Chief Executive Officer

Chairman of the Board

dfamilk.com/sustainability |

7

OUR SUSTAINABILITY JOURNEY Sustainability strategy To enrich the world through continuous improvement and innovation in the lives we touch, the planet we protect and the communities we reach.

Sustainability pillars

OUR PLANET OUR PEOPLE OUR COMMUNITIES We know the success of our business — today and for future generations — relies on the health and well-being of our planet. We strive to focus on our people by helping all of our employees and family farm-owners succeed. And finally, we enrich the communities we touch through all the possibilities of dairy.

On our farms, in our facilities and on the road, our journey to continuously improve our social responsibility efforts takes a holistic approach. We are committed to developing solutions that reduce or eliminate carbon emissions, feed people around the world and help communities thrive.

8

| 2021 Social Responsibility Report

We’re proud to support the U.N.’s 17 Sustainable Development Goals (SDGs), which are an urgent call for action by all countries — developed and developing — in a global partnership. In the coming pages, look for the SDG icons to read more about our progress.

We work to preserve the ability to pass down the farm to the next generation — the best definition of sustainability.

Randy Mooney Chairman of the Board

dfamilk.com/sustainability |

9

THE

SCIENTIST Scientists and agricultural researchers support America’s farmers in their work to produce safe, quality food to feed the nation and the world. From crop field to lab to processing plant, they conduct research and look for ways to improve the quality and productivity of food and farm animals, while ensuring healthy and sustainable conditions for our planet, people and communities.

Kim Fulton | DFA-owned Eastern Laboratory Services | Medina, Ohio

10 | 2021 Social Responsibility Report

OUR PLANET As leaders in sustainability, we are committed to nurturing our planet through the goodness of dairy — and have taken steps to do so.

We are determined to do our part to help the industry achieve net-zero by 2050 through DFA-led initiatives and collaboration with key partners. We are in a strategic position to ensure long-term opportunities for sustainability, and are committed to reducing emissions across our business by 30% by 2030 through setting and achieving science-based targets (read more on pg. 12).

Our efforts to improve sustainability are part of a collective drive within dairy, agriculture and the sustainability community at large. Leading up to 2020, global food sustainability efforts were beginning to converge toward a set of values surrounding themes of implementation, transparency, collaboration and accountability. As stewards for our planet, we have committed to reporting and validating our progress on the sustainability goals we set. We partner with multiple third-party organizations to monitor our progress.

Taking care of our planet isn’t just an initiative, it is a responsibility that’s taken to heart — and one we are committed to sharing through transparency, accountability and progress.

Working toward our science-based target On our owners’ farms - Cows are the ultimate recyclers - Renewable energy - Soil health - Animal care At our plants With our partners External reporting

12 14 16 20 22 24 26 28 30 dfamilk.com/sustainability |

11

WORKING TOWARD OUR SCIENCE-BASED TARGET We remain diligent about our responsibility to continue to meet the needs of the present without compromising the needs of future generations.

In 2020, we made a big step forward in our commitment to sustainability, becoming the first U.S. dairy cooperative to set a science-based target to reduce greenhouse gas (GHG) emissions. As a Cooperative invested in the dairy supply chain from farm-to-table, we are taking a strong position by setting a science-based target to reduce GHG emissions, both on the farm and throughout the supply chain, by 30% by 2030.

This includes Scope 1, 2 and 3 emissions, meaning we are dedicated to decreasing both our own emissions and those that are associated throughout the rest of the dairy value chain. Learn more about DFA’s GHG footprint including Scope 1, 2 and 3 emissions.

LEARN MORE

We believe in the goodness of dairy and dairy farm families. While the entire dairy industry, from farm to manufacturer, only contributes roughly 2% of total U.S. GHG emissions, we know that the dairy industry is actively leading the way for environmental solutions for our communities.

Taking action to reduce our carbon footprint and prioritize the environment for generations to come is a commitment we take to heart. Working across the dairy supply chain to reduce GHG emissions will require action guided by these key strategies: •

• • • • •

Mitigating methane emissions from cows by supporting advances in feed efficiency, herd nutrition and feed additives designed to reduce emissions Using renewable energy methods, such as solar panels and wind power, on our farms and in our plants Utilizing anaerobic digesters, which convert manure and food waste to energy, on farms and in plants Capturing emissions through healthy soil and crops Creating transportation and hauling efficiencies to reduce emissions Exploring innovative technologies and solutions to reduce emissions and promote environmental stewardship

For the next decade, we will do all we can to support and advance sustainability and stewardship of the land — setting a science-based target is our first step. As leaders in the dairy industry, it is our utmost priority to deliver value to our family farm-owners, and take care of our planet, people and communities along the way.

12 | 2021 Social Responsibility Report

DFA’s sources of greenhouse gas (GHG) emissions in 2020 Our progress to reduce emissions

ENTERIC | 28% Scope 3 | On-farm Our family farms are exploring ways to reduce enteric emissions from dairy cows, such as using feed additives and optimizing feed rations. Healthy, comfortable cows utilize resources more efficiently, which leads to less enteric emissions per pound of milk.

MANURE | 26% Scope 3 | On-farm Our family farms use manure management practices, such as anaerobic digesters, covered lagoons and composting, to reduce emissions and further utilize their manure for energy production and crop fertilization.

FEED | 23% Scope 3 | On-farm By adopting regenerative agriculture practices through pilot programs, supported by key customers, our family farms are improving soil health and increasing the capacity of their cropland to sequester atmospheric carbon.

TRANSPORTATION AND DISTRIBUTION | 9% Scope 3 | Downstream We utilize some biodiesel and compressed natural gas to reduce emissions from transporting and distributing our family farmowners’ milk. We are also looking at the possibilities of electric trucks in the future.

USE AND END-OF-LIFE OF SOLD PRODUCTS | 8% Scope 3 | Downstream Through our CoLAB Accelerator program to grow startup businesses in the dairy sector, we support end-of-life sustainability advancements, such as compostable packaging and supply chain tracking.

ENERGY | 4% Scope 3 | On-farm We are advancing renewable energy adoption at the farm level through key partnerships with companies like Jordan Energy and Vanguard Renewables in addition to providing our family farms with support and guidance through DFA Energy.

ENERGY | 1% Scope 1 and 2 | Plants Through efficiency audits, on-location solar arrays and the purchase of renewable energy, we are working to minimize the emissions of our 86 processing plants.

OTHER | 1% Scope 1 and 2 | Other From electric car charging stations to compostable dishes and cutlery at our office locations, we are committed to pursuing sustainability from all angles. dfamilk.com/sustainability |

13

ON OUR OWNERS’ FARMS By implementing innovative conservation practices and investing in renewable technologies like on-site wind turbines, solar panels and anaerobic digesters, our family farm-owners reduce their environmental impact and bring additional value to their business.

14 | 2021 Social Responsibility Report

Robert Vander Eyk & Sons Dairy | Pixley, Calif.

CURRENT AREAS OF ENGAGEMENT: • Energy efficiency • Greenhouse gas reduction • Soil health • Sustainable packaging • Enteric feed additives • Anaerobic digesters • Reporting and communications • Manure management • Renewable energy • Workforce development • Biodiversity • Deforestation risk assessment • Social compliance audits • Animal care

dfamilk.com/sustainability |

15

COWS ARE THE ULTIMATE RECYCLERS From what they eat …

Dairy cows produce delicious, high-quality milk, and they do it while being sustainable, too.

It begins with what they eat. Thanks to their special stomachs that allow them to digest tough plant matter that would normally be indigestible, cows are the ultimate recyclers.

Part of a cow’s diet includes food processing byproducts that humans can’t digest, such as sugar beet pulp, almond hulls, canola seed pulp, citrus pulp, potato peels, culled vegetables, bakery waste, corn stalks, tomato pulp, grape skins, cottonseed, soy hulls and more.

They turn products we’d throw away into delicious dairy that everyone can enjoy.

16 | 2021 Social Responsibility Report

Ensure sustainable consumption and production patterns What DFA is doing: Through improving efficiency and reducing waste, our family farm-owners are doing their part to ensure responsible consumption and production including increasingly utilizing manure for compost, fertilizer and energy production. Additional practices such as no-till or low-till cropping and cover cropping have helped to reduce nutrient runoff, allow for more efficient water usage and reduce the need for further land use expansion. By doing more with less and wasting less, DFA and the U.S. dairy industry have helped set the bar for global agriculture to continue to do better.

Hunter Ridge Dairy | Eaton, Colo.

dfamilk.com/sustainability |

17

To where it goes …

How a digester works

The byproduct of a cow’s daily diet — manure — gets put to use on the farm, too, ensuring the entire journey is sustainable.

Recent innovations have allowed dairy farmers to make farming more sustainable and productive, including the use of anaerobic digesters to transform waste from their dairies and communities into energy for use on the dairy and in the towns and cities around them.

1. It starts with manure Cow manure from dairy farms is used as fuel for the biodigester, and can also be combined with food waste from local businesses, such as restaurants and stores.

2. Converts to green energy Energy produced from the biodigester powers milk processing plants and can go back to the grid for the local community.

3. Organic fertilizers enrich the fields Fertilizers from the biodigester complete the sustainability circle. Liquid fertilizer produced from the biodigester fertilizes dairy farms’ fields, while the solids can be used as cows’ bedding.

18 | 2021 Social Responsibility Report

Take urgent action to combat climate change and its impacts What DFA is doing: U.S. dairy operations are already some of the most efficient and productive in the world, generating fewer GHG emissions per unit of milk than just about anywhere else.* By furthering the use of renewable energy, decreasing waste, better managing manure, further implementing regenerative agriculture practices and exploring the potential for reducing enteric methane, DFA is poised to lead the way as the U.S. dairy industry strives to emit net-zero carbon emissions by 2050. *Source: FAO and GDP. 2018. Climate change and the global dairy cattle sector – The role of the dairy sector in a low-carbon future. Rome.

36 pp. Licence: CC BY-NC-SA- 3.0 IGO

THE

ENGINEER Engineers develop new technology dairy farms can use to make their farms more sustainable, such as anaerobic digesters. When installed on U.S. dairy farms, the digesters convert waste to natural gas and help successfully reduce greenhouse gas (GHG) emissions.

Peter Melnik | Bar-Way Farm | Deerfield, Mass.

dfamilk.com/sustainability |

19

RENEWABLE ENERGY With almost 200 on-farm renewable energy projects currently in operation, DFA’s family farms continue to advance their commitment to a sustainable future.

Progress on renewable energy: • Partnerships with key allies such as Jordan Energy and Vanguard Renewables are helping to increase solar panels and anaerobic digester adoption • Some projects produce so much energy that farmers are contributing clean energy back to the grid • By moving into mixed waste digesters (manure and local food waste), smaller farms are able to invest in digesters

Sustainability projects on our farms

RECYCLING WATER RECYCLING WIND SOLAR ANAEROBIC DIGESTER

20 | 2021 Social Responsibility Report

More than

More than

15 50 SOLAR PROJECTS in planning stages in 2020

ANAEROBIC DIGESTERS in planning stages in 2020

DFA Energy is devoted to helping our farmer-owners navigate the complex field of energy conservation and on-farm renewable energy production.

Through DFA Energy, our family farm-owners can learn about energy opportunities best suited for their operation, including energy partnerships and information on available state and federal funds.

Ensure access to affordable, reliable, sustainable and modern energy for all What DFA is doing: Dairy has a unique opportunity to move the needle in relation to renewable energy usage. In partnering with leading companies, we have begun the process of transitioning farms to utilize dairy waste to produce energy from renewable natural gas. Additional efforts are also being made to incorporate more solar and wind energy on farms and at processing plants. By setting the standard in this space, we are showing that the transition to renewable energy in agriculture is possible and achievable.

To make it easy for our family farm-owners to decide if a solar system makes sense for their operation, DFA Energy offers a calculator that makes solar system recommendations and shows the environmental benefits for the farm.

LEARN MORE

Our family farm-owners will soon have access to additional calculators for anaerobic digesters and wind turbines.

dfamilk.com/sustainability |

21

SOIL HEALTH The humble dirt at our feet and in our farmers’ fields sustains life on our planet — and it’s important we all care for it. An exciting area within agricultural sustainability, regenerative agriculture does just that. These farming and grazing practices maintain and enhance soil health now and for the years to come. It includes timeless concepts that our family farm-owners have used for decades coupled with new technology and practices.

These practices help to replenish soil nutrients, reduce runoff, increase the longevity of the soil’s quality and maintain soil carbon stocks. In fact, there is a lot of evidence in recent studies that these practices can even increase the amount of carbon sequestered in soil.

5 principles of regenerative agriculture Increasing soil cover through integrating cover crops, especially where those crops can be integrated into forage for dairy cattle Maximizing biodiversity through growing crops that help to improve the organisms present in the farm ecosystem

Enabling living root systems through methodical inclusion of perennials that maintain root presence in the soil for longer periods

Minimizing soil disturbance through no till or low till field practices

Integration of organic fertilizers, like manure, in a precise manner such that soil nutrients are prudently used for maximizing crop growth

Our efforts: Given our unique role within the dairy value chain, we have generated funds for our interested family farm-owners to begin employing these practices through a series of region-specific trials. Whether it be covering costs related to cover crop seed or connecting interested farmers with consultants to help integrate more of these practices on their farms, our regenerative agriculture presence is growing. These pilot programs enable farmers to measure benefits, track changes and continually improve using cutting-edge data tracking and analysis.

22 | 2021 Social Responsibility Report

Lou Brown | Brownhaven Dairy | New Bremen, Ohio

Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss What DFA is doing: U.S. dairy farmers have long been stewards of American farmland, and DFA intends to both continue and amplify that work. Through continued land management improvements and gains in production efficiency, our dairy farms have been and will continue to improve soil health, decrease runoff, promote biodiversity and decrease the demand for increased land use. In finding a healthy balance between agricultural production and protecting important ecosystems, we have been able to foster practices that help to ensure that life on land is protected for many more generations.

dfamilk.com/sustainability |

23

1,900

More than document improvements were achieved in 2020. Improvements included updated veterinary signatures, employee training records and herd health protocols. These improvements resulted after our field staff conducted virtual desk audits with our family farm-owners.

100% participation All of DFA’s family farms participated in our Gold Standard Dairy Program, where farms are evaluated every three years. This also includes participation in the Farmers Assuring Responsible Management (FARM) program. These are the industry-leading animal care standards.

ANIMAL CARE DFA’s Gold Standard Dairy Program, our on-farm evaluation program, demonstrates our family farm-owners’ commitment to animal care, milk quality, land and environmental stewardship and workforce development. Through this program, our family farm-owners are evaluated every three years and critical information is collected related to animal care and wellness, water use and conservation, soil management, workforce development practices, wildlife and natural habitat conservation and energy efficiency, to name a few.

As part of this program, we incorporate National Milk Producer Federation’s (NMPF) Farmers Assuring Responsible Management (FARM) program as the animal care module.

FARM is a science-based industry standard, internationally recognized and compliant with the International Organization

24 | 2021 Social Responsibility Report

for Standardization (ISO) — one of the first livestock animal care programs in the world to gain this recognition.

We dedicate resources and personnel to conduct training for both pre-trained and certified evaluators on various farm and animal care practices. The certified evaluators who go through the extensive training then conduct on-farm evaluations on a three-year cycle to assess our family farm-owners’ herds on overall condition, cleanliness, health and overall animal care training and practices on the farm.

In addition, to promote continuous improvement in this area, we provide a wealth of resources to our family farm-owners — including helpful industry documents, training opportunities, manuals, templates, employee training guidelines and helpful checklists, among others.

Adjusting for COVID-19 In January 2020, the next iteration of the program went into effect — Gold Standard 5.0. Though typically a three-year cycle, due to COVID-19, we adapted to the circumstances and extended the program one year to ensure our family farm-owners had the opportunity to be safely evaluated.

For the majority of the year, our on-farm evaluations were halted; however, our evaluators used this time for continued education, attending online trainings and webinars on topics covering everything from disbudding practices and milk quality to farm worker health and safety. These webinars and trainings were in addition to regularly scheduled live trainings related to Gold Standard and the FARM program, which were also hosted virtually.

In addition, field staff connected with our family farm-owners virtually to perform “desk audits” and ensure they had up-to-date documents, such as updated veterinary signatures, employee training records, herd health protocols and more.

dfamilk.com/sustainability |

25

AT OUR PLANTS Our 86 manufacturing facilities process our family farm-owners’ milk into dairy products for consumers to enjoy around the globe through top-of-the-line manufacturing capabilities. With facilities located throughout the United States, our plants are in close proximity to our supply, which ensures optimal freshness and minimal transportation while exporting to customers around the world.

Our plants maximize efficiencies and drive sustainable initiatives through on-site innovation and industry collaboration. We are a proud member of the U.S. Dairy Stewardship Commitment through which industry metrics are aggregated and reported. Through our participation, we can benchmark performance and learn from industry partners to implement best-in-class practices. The indicators derived from regular reporting will be key to driving the U.S. dairy industry to achieve our environmental goals, such as net-zero by 2050. Initiatives like this ensure transparency and accountability for DFA and the wider industry as we continue to make sustainable progress.

We also continue to drive innovation at our plants through on-site renewable energy projects and energy audits. Plant energy audits, performed in partnership with expert engineering firms, have helped to identify opportunities for additional greenhouse gas (GHG) reductions and efficiency gains across our portfolio. Driving sustainable initiatives at our plants is not only key to meeting our environmental commitments, but also has beneficial impacts on product quality and operational safety.

The Creamery, our retail store in Beaver, Utah, which sits right next door to our plant, switched to sustainable gift box packaging in 2020. The packaging is recyclable and includes a corn-based compostable insulated liner, called Green Cell Foam, to help keep cheese cool during transit, eco-friendly bubble wrap and biodegradable packing peanuts. Green Cell Foam is the most environmentally sustainable and functional packaging material available today. The new gift box packaging will compost, or go through the natural recycling process, in 60 days or less.

26 | 2021 Social Responsibility Report

BEVERAGE AND DAIRY FOODS DAIRY BRANDS INGREDIENT SOLUTIONS STREMICKS HERITAGE FOODS ™

dfamilk.com/sustainability |

27

WITH OUR PARTNERS

Industry collaborations and associations

Creating real change doesn’t happen alone. It takes a global community to ensure the next generation has an opportunity to work the same land for years to come and a healthy planet to enjoy.

We are spearheading efforts toward common social responsibility goals through transparency, accountability and progress. We are proud to support and partner with organizations across the globe working toward the same goals.

28 | 2021 Social Responsibility Report

United States

SUSTAINA GROWT

Progress reporting

Strengthen the means of implementation and revitalize the global partnership for sustainable development What DFA is doing: DFA, and the U.S. dairy industry, can’t tackle food sustainability alone.

In taking on this challenge, we have formed a series of partnerships and collaborative commitments within dairy and throughout the food system. Some of these synergies include CDP™, the Sustainable Dairy Partnership and U.S. Dairy Stewardship Commitment, as well as programs developed with government agencies, nongovernmental organizations and our customers. Global partnerships like these help all of us to maintain accountability and accelerate the push for a more sustainable world.

ABLE TH

Projects and innovation dfamilk.com/sustainability |

29

EXTERNAL REPORTING We are committed to transparency, collaboration and accountability to monitor and validate the progress of our sustainability efforts. Below are a few of the third-party organizations we partner with.

To gauge and share our progress, we have partnered with CDP, which runs a global disclosure system for environmental reporting recognized across the world.

CDP’s robust database and disclosure platform allow climate impact to be assessed for companies, cities, states and regions around the world. Through this partnership, we provide transparency and honesty about our sustainability goals, while also showcasing the progress that both our Cooperative and the entire dairy industry are able to achieve through the implementation of sustainability-related projects.

30 | 2021 Social Responsibility Report

By participating in the U.S. Dairy Stewardship Commitment through the Innovation Center for U.S. Dairy, we are benchmarking our progress through shared industry metrics that are reported every five years. We are aligned with the U.S. dairy industry’s goals to: 1.

2.

3.

Become carbon neutral or better Optimize water use while maximizing recycling Improve water quality by optimizing utilization of manure and nutrients by 2050

Through this effort, we are keeping ourselves accountable for our progress.

Will Collier | T&K Dairy | Snyder, Texas

Our role in the dairy value chain is wide-reaching and complex. Fortunately, our customers share our desire to create a more sustainable food system that’s inclusive of high-quality dairy products. To ensure that our values align in this space, we have committed to the Sustainable Dairy Partnership (SDP).

SDP was created by a working group of members of the Sustainable Agriculture Initiative (SAI) Platform, which brings together more than 120 member companies and organizations leading the way in sustainable agriculture worldwide. SDP is a business-to-business alliance that provides a results-oriented approach to hold affiliates accountable. Instead of creating new guidelines, SDP builds off the 11 criteria for impact established by the Dairy Sustainability Framework (DSF), which provides overarching goals and alignment of the dairy industry’s actions globally on the path to sustainability. SDP also incorporates national and company programs already in place based on each participant’s specific priorities.

SDP helps map progress by defining five distinct stages. By helping to drive unity and candidness on sustainability throughout the dairy value chain, SDP has allowed us to maintain transparency in an industry-wide push to be better.

dfamilk.com/sustainability |

31

THE

FIELD REPRESENTATIVE As a regular point of contact for — and often friend of — dairy farm families, field representatives provide information, assistance and services to help dairy farmers produce high-quality milk. They call on farms, often daily, to check in, answer questions and provide support. While those “calls” looked more like phone calls than farm visits in 2020, field representatives are there for their farmers no matter the contact method. They are the experts dairy farmers know they can count on for just about any question — day or night.

Butch Schroeder and Jeff Hoegger (Field Representative) Lawrence Schroeder Dairy | Windthorst, Texas 32 | 2021 Social Responsibility Report

OUR PEOPLE This year looked unlike any other for the people at the heart of what we do — our family farm-owners and the employees who support them.

The COVID-19 pandemic changed how we worked — but it did not change what we do. Through the resiliency of our people, we continued to nourish consumers with all the possibilities of dairy down the road and around the world.

We committed — and remain committed to — implementing best practices to ensure we maintained safe, healthy work environments while remaining in operation for our family farm-owners, customers and consumers. As well, we continued to invest in our people and provide benefits to support them and ensure their success.

Throughout 2020, our people continued to deliver on our mission, execute our vision and live our values even during challenging times. We found new ways to stay connected and ensure our high-quality dairy products were available to consumers around the globe, 24 hours a day and 365 days a year.

Keeping employees safe during COVID-19 Investing in our employees every day - Happy. Healthy. Safe. wellness program - Value Integrity program - CoLAB innovation program Supporting our family farm-owners during COVID-19 Providing value to our family farm-owners every day

34 36 37 37 38 40 42

dfamilk.com/sustainability |

33

KEEPING EMPLOYEES SAFE DURING COVID-19 Employee health and safety remained our top priority throughout the COVID-19 pandemic. While the changing dynamics have altered the way we work, we never stopped getting the job done, and our nearly 20,000 employees at more than 400 locations across the country ensured products made it to store shelves each and every day. Following the guidance from the Centers for Disease Control and Prevention (CDC) and state and local health departments, we continue to reassess and reevaluate our processes and procedures regularly to ensure we continue to keep our employees safe.

PREVENTING THE SPREAD At every location, alongside our existing environmental, health and safety protocols, we implemented:

Advanced screening protocols, which includes daily temperature screenings

Social distancing

Mask usage

Sanitation protocols

Robust contact tracing protocols to identify and notify employees who came in close contact with infected individuals to prevent outbreaks in our facilities and offices

34 | 2021 Social Responsibility Report

PROVIDING NEEDED RESOURCES We ensured employees were also equipped with the proper protective equipment at all times.

We distributed:

HUNDREDS OF THOUSANDS of masks

As our culture relies on us staying connected and collaborating, for those who usually worked in offices, we utilized Cisco® Webex and Microsoft® Teams to keep in touch while we were apart.

RESPONDING QUICKLY At the beginning of the pandemic, we implemented our temporary COVID-19 paid leave policy to ensure employees were supplied with additional time off if they contracted COVID-19 or had to care for someone with COVID-19.

Starting at the beginning of 2021, we coordinated with local and state health departments to make the COVID-19 vaccine available to our employees across the Cooperative. Hourly employees were eligible to receive two hours of pay per dose.

We encouraged employees to rely on our Employee Assistance Program, through New Directions®, to take care of themselves mentally and emotionally. The program offers counseling and other support services for employees and their family members.

dfamilk.com/sustainability |

35

INVESTING IN OUR EMPLOYEES EVERY DAY Our employees are united in their passion to deliver value to our family farm-owners, and each individual supports our farmer-members’ critical role in the nation’s food supply. Whether our employees work in the field, as one of our drivers or field representatives, or work in a plant, lab or office, they followed safety protocols and helped ensure our business continued to run during a difficult time for the country. In 2020, they truly lived our values of integrity, passion, quality and community every day.

Understanding that this was a difficult time for many, we continued to build a welcoming, collaborative culture, investing in innovation and growing the skills and capabilities of our workforce, all while finding new ways to foster employee engagement at all levels.

Especially during a challenging year, we ensured employees continued to have access to a wide variety of resources to help improve their physical, emotional and financial well-being. Through our Happy. Healthy.

Safe. wellness program in 2020, employees participated in health challenges with their co-workers, accessed resources online or in person and received counseling and referrals to help deal with stress, financial or legal challenges.

We also offer leadership development and in-person and online training programs to strengthen existing skills and help employees continue to grow their skillset. When the pandemic hit, our learning and development team quickly turned instructor-led offerings into virtual instructor-led offerings to provide a new avenue to present content and continue the support of the learning culture at DFA.

36 | 2021 Social Responsibility Report

BY THE NUMBERS

6.5% MORE DIVERSE

within the past 5 years. Our employee workforce has become more racially diverse and we continue to strive to increase diversity at DFA through establishing a formal diversity and inclusion initiative in 2020.

5% of the workforce are VETERANS.

10% of those that identify as veterans are FEMALE.

200 + EMPLOYEES

recognized by their co-workers during June Dairy Month for their hard work during unprecedented times.

47,475 TRAINING HOURS

completed in DairyU, our online learning system.

Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all What DFA is doing: The U.S. dairy industry provides nearly 1 million jobs and has a $620 billion impact on the economy.

This impact is expansive, stretching from major cities to rural populations. Operating in 48 states as the largest U.S. dairy company, we are proud to provide work to nearly 20,000 people throughout the country. Our economic impact is even greater, including hiring contract haulers, creating opportunities through construction jobs for updates at our plants and more.

Started in 2018, DFA’s employee wellness program, Happy. Healthy. Safe., continued to make it easier for our employees to make healthier choices in 2020. From providing healthy recipes to workout ideas, stress management resources, safety tips and more, we provide needed resources to help employees stay well physically, mentally and emotionally.

HIGHLIGHTS FROM 2020: •

Due to the added stress of the COVID-19 pandemic, we wanted to ensure employees had the resources they needed to cope with their anxieties and stressors and were encouraged to continue taking care of their mental and emotional well-being.

To help, Happy. Healthy. Safe. launched a Wellness Wednesday health series on our intranet

• To help employees self-monitor their health at home, we made personal thermometers available to employees in April 2020 • In October and November, we facilitated flu shots across all of our locations to help curb the spread of influenza •

While on-site health screenings were canceled due to the COVID-19 pandemic, we encouraged employees to engage in individual and virtual health challenges via our health and wellness vendor, Bravo®

As one of our core values, integrity is ingrained in our culture, inspires our work and ensures the strength of our reputation as a Cooperative. Our Value Integrity program reminds employees that everyone is expected to adhere to the highest standards of ethical conduct every day in every way.

In 2020, we reinforced our culture of integrity during Value Integrity Week in January, where employees were reminded of our Code of Conduct policies, recognized as Value Integrity All-Stars for setting an example for others and encouraged to talk about what integrity means to them.

After acquiring a substantial portion of Dean Foods’ assets in May, we successfully introduced the Value Integrity program and our Code of Conduct to more than 10,000 new employees. Every new employee received a printed copy of the Code.

We all have different roles and responsibilities, but our value of integrity ties us all together.

29 EMPLOYEES sit on the

Value Integrity Leadership Council.

Our network of 140 Value Integrity liaisons throughout the Cooperative help drive our culture of compliance.

dfamilk.com/sustainability |

37

To foster more collaboration across our Cooperative and among our diverse group of employees, DFA launched its updated innovation program — CoLAB — in May 2020. The initiatives included in the program are:

CoLAB Connect Our online idea submission forum that puts our family farm-owners’ and employees’ ideas into action.

CoLAB Conversations Brainstorming sessions to inspire creativity and collaboration.

CoLAB Accelerator A 90-day immersive program to grow ag-tech and dairy food product startup businesses.

LEARN MORE

Milk Bar Sessions Hosted by CoLAB, these collaborative, informational events are held virtually once a month to give employees more information on a variety of topics.

Talk Dairy to Me DFA’s monthly podcast about all things innovation. To listen, search for Talk Dairy to Me wherever you listen to podcasts, such as Apple Podcasts, Google Play or Spotify.

38 | 2021 Social Responsibility Report

During an unprecedented year, we had to get innovative in how we implemented our innovation initiatives.

Highlights from 2020: Conducted the first entirely virtual CoLAB Conversations session with our risk management and sustainability teams

Pivoted to launch our planned in-person Milk Bar Sessions to employees virtually

Hosted our first completely virtual CoLAB Accelerator program and Demo Day

dfamilk.com/sustainability |

39

SUPPORTING OUR FAMILY FARM-OWNERS DURING COVID-19 Dairy farming is a 24/7, 365 day-a-year way of life that is essential to our nation’s food supply. In spite of a worldwide pandemic in 2020, cows don’t just shut off their milk production, and this presented unique challenges for our family farm-owners — and industry — during volatile and uncertain times.

Shortly after the World Health Organization (WHO) declared the pandemic, we were in immediate contact with our family farm-owners assuring them that their milk would be picked up and that plants would continue to operate. Fear, the unknown and the unpredictable factors of the pandemic were real, but as a Cooperative, it was our responsibility to manage through the challenges.

During this time, market conditions were increasingly volatile — at historical and unprecedented levels — starting with a jump in demand in the early weeks of the pandemic as consumers everywhere began to stockpile food and pantry staples, and quickly dropping in demand as food service, schools, events and restaurants were canceled or closed their doors.

As a result, we experienced some of the most trying times for managing our family farm-owners’ milk supply. So much went into finding a new home for milk when it was turned away from customers and processors who had no capacity for it. We quickly pivoted to ease the situation.

40 | 2021 Social Responsibility Report

WHAT WE DID: Disposing of milk is certainly our last resort. But due to the perishable nature of our product, and the constantly fluctuating manufacturing plant capacity, it sometimes may be our only option, as was witnessed during the COVID-19 pandemic.

Some solutions we implemented included: Partnering with others in the industry to increase the amount of cheese on pizzas

Working with food banks to explore donation opportunities

Educating consumers on the current situation through social and traditional media

Working with corporate retail stores to remove dairy product purchasing limits

Speaking with government officials to explore remedies to offset losses

In addition to driving demand for dairy and finding a home for our family farm-owners’ milk, our priorities during this time were also centered on the safety and well-being of our family farm-owners, their families and employees. We provided them with timely updates and resources, including frequent communication from Cooperative leadership, opportunities for phone calls and dialogue, as well as helpful on-farm resources. These resources, most available in both English and Spanish, were developed or gathered from reliable industry sources to assist them in training and educating their own workforces about the safety and health protocols to keep one another safe and continue operating efficiently. On-farm housing protocols, safety posters, critical infrastructure documentation, truck cleaning best practices and parlor signage were some of the resources to name a few.

dfamilk.com/sustainability |

41

PROVIDING VALUE TO OUR FAMILY FARM-OWNERS EVERY DAY Despite an unprecedented year, we continued to help our family farm-owners by providing a variety of services, products and investments to help them succeed.

Services that make it easier and more profitable for our family farm-owners to farm include:

FARM SERVICES

Member Savings Network Our footprint enables us to establish partnerships with national, reputable companies to provide our farmer-owners with discounts on products such as tractors, farm equipment, wireless cellphone plans and more.

More than

$5.5 million in savings last year

An average of

An average of

Motors vehicle

Automobiles vehicle

$5,435 in savings per General

on Cat® equipment

42 | 2021 Social Responsibility Report

$3,167 in savings per Fiat Chrysler

90,000

FAMILY MEMBERS and employees protected through DFA Insurance

37,691 TONS

of formula feed provided to our family farm-owners by DFA Farm Supplies — saving them an average of per ton

$10-20

$1 million

financed on technology and efficiency projects through DFA Finance

dfamilk.com/sustainability |

43

THE

PINT-SIZED ADVOCATE Dairy families take seriously the responsibility to be good stewards of the land. It is a tradition that was passed down to them and that they are passing onto their children. It will take advocates of all ages to ensure a healthy Earth and our pint-sized advocates are leading the next generation to a more sustainable future.

Elijah, Dan, Ian and Sawyer Brick Brickstead Dairy | Greenleaf, Wis. 44 | 2021 Social Responsibility Report

OUR COMMUNITIES As a farmer-owned Cooperative, we are committed to our vision of enriching communities and consumers’ lives through all the possibilities of dairy. We care deeply about the wellbeing of our neighbors and friends, and we’re dedicated to giving back in all the ways we can — especially during an unprecedented year.

Community has always been deeply ingrained in our culture and formalized through our DFA Cares Foundation, and in 2020 our family farm-owners and employees demonstrated this more than ever.

Helping those in need - Farmers Feeding Families Fund - Dairy donations - Government advocacy - Disaster response Fostering our culture - Diversity and inclusion - Entrepreneurship

46 46 48 50 51 52 52 54

dfamilk.com/sustainability |

45

HELPING THOSE IN NEED From starting a fund to raise money and help get dairy products to those in need to donating our time through volunteer efforts, our family farm-owners and employees gave back this year in a big way. Even more, we took a hard look at our culture and made improvements in diversity and inclusion and continued efforts to support startup businesses in the dairy foods industry. Throughout the year, we were proud to support all the communities we touch.

$675,000 Funds raised in one year

FARMERS FEEDING FAMILIES FUND When the COVID-19 outbreak began, the need for reliable, nutritious food increased dramatically. The pandemic caused school and meal delivery service closures, as well as forced restaurants and other food service businesses to shut down. Millions of people were put out of work and families across the nation faced uncertainty about how to put food on their tables.

In April 2020, as the nation began to feel the profound effects of the pandemic, we launched our Farmers Feeding Families Fund through the DFA Cares Foundation to help meet this increased need. Thanks to generous donations from our family farm-owners, employees and customers, the fund raised money to get dairy products into food banks in communities where we live and work.

215 Communities positively impacted

The donations provided more than just wholesome nutrition, but also hope during challenging times. Milk is one of the most requested, yet least donated items to food pantries across the country. The perishable nature of dairy, along with the need for refrigeration and storage, makes it difficult to keep in supply.

Recognizing this, beginning in September 2020, the fund helped make long-term infrastructure improvements in food banks, food pantries and food shelves by donating refrigerators so these organizations can continue to offer dairy products to those they serve for years to come.

In 2021, we will continue connecting food banks around the country with much-needed dairy products and refrigeration. As well, our family farm-owners and employees can continue to nominate a food bank or food pantry in communities where they live and work so we can ensure nutritious dairy products are reaching those most in need.

46 | 2021 Social Responsibility Report

1 MILLION Gallons donated

End hunger, achieve food security and improved nutrition and promote sustainable agriculture What DFA is doing: We are proud to lead the way in resilient agriculture practices, along with the U.S. dairy industry, which has produced 60% more milk with 30% fewer cows over the last 50 years. A robust source of nutrients, this milk has been provided to more people through the national school lunch and breakfast program as well as through community partners, such as Feeding America®, to ensure struggling families receive the sustenance they need.

Kyle Laurie | Feeding Chittenden | Burlington, Vt.

dfamilk.com/sustainability |

47

DAIRY DONATIONS Building on the momentum of the launch of our Farmers Feeding Families Fund in April 2020, our family farm-owners and employees continued that community giving spirit throughout the year. During June Dairy Month and Hunger Action Month in September, in particular, our family farm-owners and employees organized and participated in drive-thru milk giveaways, food drives and dairy donations to essential workers.

Throughout the year, these efforts provided the equivalent of 16 million servings of milk to those in need.

5K

Donation from the Farmers Feeding Families Fund to the Weld Food Bank in Greeley, Colo., in May 2020. The food bank presented DFA with the 2020 Innovative Donor of the Year Award

100s

Inspiring photos, stories and tweets shared by our family farm-owners, employees, consumers and industry partners on social media using #GallonsOfGood for June Dairy Month

$

7

All of DFA’s Areas made a product or monetary donation, or hosted a food distribution event to celebrate June Dairy Month

Donated refrigerators to food banks, food pantries and food shelves through the Farmers Feeding Families Fund for Hunger Action Month in September

1 MILLION

Shelf-stable milk cartons donated throughout Iowa, Minnesota, South Dakota and Wisconsin through The Giving Cow Project launched by Kemps®, part of DFA’s family of brands

48 | 2021 Social Responsibility Report

DAIRY IS A RICH SOURCE OF

3 OF THE 5 NUTRIENTS

Ensure healthy lives and promote well-being for all at all ages

OF PUBLIC HEALTH CONCERN

Ca Calcium

Dietary Fiber

K

Potassium

Fe Iron

Source: 2020-2025 dietary guidelines for Americans

Vitamin D

What DFA is doing: While our health care system is comprised of doctors, public health measures and state-of-the-art medication and vaccines, oftentimes the best line of defense against the unknown is a healthy, nutritious diet. Sadly, many Americans still find themselves deficient in vital nutrients. Dairy is packed with nutrition including protein, phosphorous and B vitamins, potassium, calcium and vitamin D. In addition to promoting the nutrition of dairy, we offer a wellness program to our employees. Called Happy.

Healthy. Safe., the initiative helps employees care for their physical, mental and emotional well-being.

dfamilk.com/sustainability |

49

GOVERNMENT ADVOCACY When the pandemic hit, dairy farms of all sizes and across all communities felt its effects. We stepped up where it was most needed to ensure government assistance efforts included support for dairy farmers, and that it was quickly and efficiently implemented. DFA’s legislative affairs team worked with policymakers from all over the country — both at the state and federal level — to ensure DFA family farm-owners had the resources needed to navigate available state and federal programs. We also relayed feedback from farmers themselves on the effectiveness of these programs.

Some of the support programs implemented included:

Coronavirus Food Assistance Program (CFAP) — Congress passed multiple COVID-19 relief bills, which included two rounds of direct payments to farmers, totaling $30 billion, $3 billion of which went to dairy farmers, through the U.S. Department of Agriculture (USDA) to help offset losses.

Paycheck Protection Program (PPP) — Through the Small Business Administration, Congress authorized $350 billion in assistance to employers with fewer than 500 employees, including farms, in the form of a low-interest loan that can be forgiven for eligible expenses related to COVID-19.

Farmers to Families Food Box Program — The food box program allowed USDA to purchase and distribute commodity boxes of fresh fruits and vegetables, dairy products and meat products at food banks, community organizations and nonprofits across the country. As of the end of the year, the USDA food box program distributed a total of 124.1 million food boxes to families in need across the country.

50 | 2021 Social Responsibility Report

DISASTER RESPONSE We fulfill our core value of community by helping with disaster relief whenever we can.

48,000

units of Borden® Cheese Crisps ‘n Cubes snack trays donated to Second Harvest Food Bank of Middle Tennessee in April for first responders

3 PALLETS 8 PALLETS $66,500

of nonfat dry milk donated to Convoy of Hope in May for relief efforts in Central America

of milk protein concentrate and nonfat dry milk donated in September to Convoy of Hope for Hurricane Laura relief

to 29 families impacted by tornadoes, snow or fires

dfamilk.com/sustainability |

51

FOSTERING OUR CULTURE We strive to build a culture focused on sustainability, innovation and community.

Through these initiatives, we foster employee engagement, collaboration and growth. Our culture extends to outside our organization as well, where we work to promote dairy and the agriculture industry. In 2020, we provided $74,000 in scholarships to 52 students pursuing a career in the agriculture industry to do our part to foster the next generation of dairy enthusiasts.

A diverse and inclusive workspace for our employees is essential to living our values of integrity, passion, quality and community. Due to the ongoing social unrest in our country amid a pandemic, there was no better time to bring employees together from across the Cooperative to assess where we’ve been, where we are and where we need to be in terms of diversity and inclusion.

In August 2020, our inaugural Diversity and Inclusion Advisory Council was formed to address the need for more diversity and better inclusion within our Cooperative community. Consisting of 20 employees from across the Cooperative, the Council represents diversity in race, age, gender, sexual orientation, job role, location and experience to reflect the diversity of our employee population.

The council finalized our diversity and inclusion charter at the end of 2020, which consists of a mission statement, pillars and guiding principles.

LEARN MORE

52 | 2021 Social Responsibility Report

dfamilk.com/sustainability |

53

ENTREPRENEURSHIP

Part of our innovation program, the CoLAB Accelerator is our 90-day program to accelerate and grow ag-tech and dairy food startup businesses through mentorship and educational programming. We partner with various startups across the dairy value chain that provide valuable services to our family farm-owners, nutritious dairy-based products to consumers or helpful insights to our business. We’ve built long-lasting relationships with several Accelerator startups through additional investment and support.

With nine participants, 2020 featured our largest class ever.

The participants included: Armenta™ - non-invasive technology for antibiotic-free

treatment of bovine mastitis Capro-X - a sustainable solution for whey waste from

Greek yogurt production

Chank’s Grab-N-Go - a handheld snack company featuring pizza cones, Philly cheesesteak cones and more

GoodSport™ - a sports drink made from the naturally

hydrating power of milk

Livestock Water Recycling - manure treatment technology

Mi Terro - a food waste biotech startup that creates fabric from milk proteins (end result: t-shirts)

Superfrau - electrolyte drinks made from upcycling

surplus whey

Wheyward Spirit - premium spirit made from whey

YAAR Bar - Nordic chilled dairy snacks

54 | 2021 Social Responsibility Report

@drinkgoodsport

THE

INNOVATORS Through creative thinking and an entrepreneurial spirit, innovators think about dairy in new and exciting ways. They bring new products, solutions and technology to life that benefit dairy farmers, the industry and consumers. They are entrepreneurs like Michelle McBride, founder and chief executive officer of GoodSport™, which makes a sports drink that unlocks the naturally hydrating power of milk. “Consumers no longer have to choose between a sports drink with natural ingredients or effective hydration,” Michelle says. “Now they can have both — from the goodness of milk.”

dfamilk.com/sustainability |

55

2021

SOCIAL RESPONSIBILITY REPORT

dfamilk.com | © 2021 Dairy Farmers of America, Inc. | April 2021

SUST21003