Record Breaking Year Benefits Members

NorthStar’s record breaking year set the stage for the greatest distribution of patronage and dividends to member-

owners in history. As a board, we are very pleased with the Cooperative’s performance, and even more so in declaring the largest ever single-year patronage distribution of nearly $1.2 million.

Two thousand fifteen marks the 14th consecutive year member-owners have received patronage, bringing total patronage distribution for that period to just over $7.5 million. As a result of the current dairy economy, as well as the strength of the Cooperative’s balance sheet, NorthStar is paying more than half of the patronage in cash, and will be delivered to members by early March.

It is rewarding for the board of directors and the NorthStar team to be able to operate in such a manner that we offer the best overall value when it comes to your farm’s genetic, reproduction and herd health needs, all while providing a return on purchases to member-owners. This year’s patronage distribution represents a 7.5 percent return on purchases, effectively improving your bottom line.

Paul Trierweiler, President

Along with record patronage, the board approved a 67 cent dividend on all shares of Class A Preferred Stock. Totaling $46,530, this dividend distribution is the largest ever provided to Preferred Stockowners through cash and reinvestments.

Highlights of your Cooperative’s performance can be found in the Annual Report in this newsletter. While 2015 was record-breaking, even more impressive is NorthStar’s growth over the past 10 years. In the past decade, the Cooperative has nearly doubled sales revenues exceeding $30 million; eight of our best years for operating profit have occurred during this time, and NorthStar has declared over $6.9 million in patronage and preferred stock dividends.

This ongoing growth is one of the many factors that has enabled the value of Class A Preferred Stock to more than double in the past ten years. Valued at $10 a share in 1999, and growing to a current day value of $34.25, this upward trend reflects the increasing growth, strength and value resulting from the tremendous non-patronage business performance we have experienced.

NorthStar’s mission of enhancing producer profitability through integrated services has been the catalyst of many decisions through

the years. The fact that we received a record number of pre-payments in 2015 validates to the board that the customers and member-owners of NorthStar Cooperative believe in our direction, purpose and mission. As the saying goes, “actions speak louder than words,” and the sentiment showed through as NorthStar received over $2 million in pre-payments for the coming year. Thank you for your trust and confidence in NorthStar.

Our ability to pay patronage and dividends is based on many factors, the most important being you! Your decision to choose NorthStar for your reproduction, production, herd health and herd management needs means a lot to all of us.

On behalf of the board of directors and the entire NorthStar team, THANK YOU! We appreciate the trust and confidence you put in us. We do not take it for granted.

Patro

nage Distribution

Largest in history!

2 Comprehensive solutions for producer profitability.

Milk testing options for Johne’s disease, BVD, and pregnancy are just a few of the technologies brought to the dairy industry by AntelBio. With a reorganization of operations at AntelBio, NorthStar Cooperative is promising the dairy and beef industries, “there’s more to come.”

AntelBio’s run of new diagnostic testing options started with NorthStar’s investment in research and development in 2000, and over the last 15 years, the commercial testing menu has grown significantly in size and scope. In 2015, veterinarians and dairy producers entrusted AntelBio’s commercial operation with over 160,000 milk, blood, fecal and tissue samples.

While AntelBio’s original focus was research and development, these efforts have been serially diluted with increasing responsibilities in commercialization, marketing and promotion of the growing diagnostic portfolio. In 2016, these commercial operations have been officially shifted to NorthStar DHI, allowing AntelBio to focus on emerging technologies that will affect the livestock industry in the future.

New developments in DNA sequencing and editing, infrared and mass spectroscopy, as well as traditional and in-vitro fertilization are certain to change the dairy industry. As such, AntelBio is recruiting research scientists with expertise in these new technologies. Once fully staffed, AntelBio’s primary focus will be to determine which and how these technologies are best suited for dairy and beef producers.

With these recent advances, the possibilities are extraordinary. Imagine a blood or milk test that not only determines pregnancy status, but can also detect fetal sex and genomic merit. Fetal DNA is just one of the many biomarkers circulating in cows that can

Research and Development Inspires New Products & Services

be used to detect new, economically important traits. New opportunities for livestock producers surface with each advance in biotechnology, it’s just a matter of finding the right application at the right cost.

Traditional technologies will be revisited as well. While culture predates the turn of the century, it continues to be a mainstay for ensuring milk quality throughout the dairy industry. Culture is also a prerequisite for in-vitro fertilization,

Todd Byrem, Ph.D., Director AntelBio Systems byremt@antelbio.com

and when combined with advanced technologies, could bring sexed, genomically-tested embryos to the market in the near future.

Beyond sexing, genomics and milk diagnostics, new biotechnologies are certain to bring additional excitement to our industry. Reinvesting in research and development will ensure that NorthStar continues to bring the industry the best technologies at the greatest value.

1999

2005

2015

2016

2010

NorthStar establishes AntelBio to bring novel new testing strategies to the industry.

First Johne’s Milk ELISA available in 2001. Johne’s fecal PCR, and BLV ELISAs added to menu. Installed Milk ELISA equipment in DHI labs across the U.S. and Canada.

BVD ELISA & PCR Milk tests establish DHI as aversatile platform for animal health diagnostics.

Pooling samples validated as a cost-effective method to test largersubmissions. US Animal Health Association accepts Johne’s Milk ELISA for National Voluntary Johne's Control Program.

Annual sales exceed $1.4 million.

Johne’s Milk ELISA proficiency program established for DHI Lab Certifica-tion (QCS). Non-esterified fatty acid (NEFA) and Mastitis PCR (Contagious 3 and Complete 16) testing added to services.

Long-awaited Milk Pregnancy Testavailable 2013.

Surpassed 1 million milk samples analyzed for Johne’s. NorthStar DHI lab and AntelBio diagnostic lab merge to create faster, more responsivetesting for producers and veterinarians.

AntelBio restructures to focus on research anddevelopment of emerging technologies.

Health and diagnostic tests currently available include pregnancy,Mastitis, Johne’s, BVD, BLV, Progesterone, Bovine Neospora, and NEFA.

NorthStar Cooperative again had a record year. Record Revenues,

Record Sales, Record Patronage, and the list goes on. This year over year growth is truly impressive considering the challenging market our member-owners were experiencing. NorthStar’s PEOPLE

and PARTNERS led the charge for such PROGRESS.

NorthStar’s team of 250+ PEOPLE possess passion and excitement that is second to none. They are truly committed to carrying out the Cooperative’s mission of “enhancing producer profitability through integrated services.”

Our PARTNERS, such as Select Sires and Dairy Records Management Systems (DRMS), provide NorthStar the best products and programs in the world. These partnerships, as well as those with other industry experts, allow NorthStar to become a valued partner to over 6,000 producers.

While PROGRESS is often measured in numbers, in reality those numbers reflect the growing trust, confidence and belief you have in NorthStar. We invested in new programs, products and technologies to keep pace with your changing needs. Continuing our focus on PEOPLE development, our NorthStar team continues to strive to be a valued member of your farm.

By all standards 2015 was a record year, but most impressive is NorthStar’s purposeful growth over the past ten. Developing and implementing the ideas and strategies from a 2005 Futuring Session, NorthStar continues to PROGRESS in achieving our mission of “enhancing producer profitability through integrated services.”

Record pre-payments received for use on future

products and services.

2015Annual

ReportPeople.

Partners. Progress.

with over

4,676,211

$1,494,518

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testing.

RECORD SALES

4,313,463

Most milk samples

analyzed for production, health and diagnostics.

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5northstarcooperative.com

Best Metrics for Addressing Reproductive EfficiencyJulie Ainsworth, Coordinator Reproductive Solutions, PAS ainsworthj@northstarcooperative.com

Reproductive efficiency has a tremendous effect on the profitability of a dairy operation. It affects many aspects of the herd including lactation length and income-over feed cost, cost of heifer replacement-rearing programs, availability of replacement heifers and lifetime profit.

Because of its influence, herds should frequently monitor reproductive numbers which assures problems are addressed in a timely manner. This article highlights key performance indicators, and benchmark goals for reproduction. It is important to note that the numbers come from herds with high reproductive efficiency, and not from controlled studies.

While you can segment your herd into different categories (first lacatation, second and greater lactation and replacement animals), a good place to start is to look at Lactating Cow - Overall. By using dairy management software like PCDart or DairyComp 305, or by working with your NorthStar Specialist the following monitors can be evaluated.Lactating Cow – Overall

First let’s take a look at the herd as a whole. Which monitors to evaluate and what good target goals for high reproductive efficiency should be. • 21-Day Pregnancy Rates: >22% (adjust for the herd's

VWP.)

• % of Eligible Cows Bred or Insemination Risk: ≥60%• Overall Conception: ≥35% When assessing conception

it is important to remember that several factors contribute: technician, breeding trigger or code, nutrition, weather, cow comfort, management practices, semen quality, clinical mastitis close to conception, heat detection accuracy, and transition cow management with a minimum of post-partum disease.

• Conception at 1st Service: ≥40%• Conception at Repeat Services: ≥30%

• Pregnancy Loss: <15%. When assessing pregnancy loss using on-farm records, days at first pregnancy diagnosis and time of year should be considered. Herds that pregnancy check before 35 days after A.I. are at higher risk of pregnancy loss because pregnancy loss is higher in early pregnancy. Reconfirmation of pregnancy should be performed 60-100 days of gestation and before initiation of the dry period (200-220 days gestation). Testing DHI milk samples for pregnancy specific proteins (PAG’s) can be a great labor free way to do this.

• Voluntary Waiting Period (VWP) should be assessed and should not be the same in all dairies. The VWP is the number of days between calving and when the cows become eligible to be inseminated. It should be chosen based on when cows have a reasonable chance to obtain a conception, but not so late that it increases calving interval or days open. All cows should be inseminated for the first time by 100 days in milk.

• Reinsemination interval should have an average of less than 35 days.

• Percentage of Total Herd Pregnant: >50%. This will vary by average days in milk of the herd. The lower the average days in milk, we would expect a lower percent of the herd pregnant, when compared to higher days in milk.

• Percent of Herd Pregnant by 150 DIM: >60% but this depends on the persistency and overall production of the herd.

• Percent of herd listed as “do not breed”: 5-7%Lactation Groups and Replacement Heifers

In addition to monitoring your herd’s overall metrics, you can dig deeper by evaluating by groups as there are real differences between lactations.First-Lactation Cows• Overall Conception: >35%• Conception at 1st Service: >40%• Conception at Repeat Services: >30%• Average and Median Days Open: approximately 120

days (depends on persistency and production of 1st lactation cows).

2nd+ Lactation Cows• Overall Conception: >30%

21-day pregnancy rate report with VWP accounted for.

Continued on next page

6 Comprehensive solutions for producer profitability.

• Conception at 1st Service: >35%• Conception Risk at Repeat Service: >30%• Average and Median Days Open: 100-110 days but this

depends on the production of the herd. Replacement Heifers• 21-Day Pregnancy Rate: ≥ 30% for sexed semen and

40% for conventional semen.• % of Eligible Heifers Bred or Insemination Risk: ≥65%• Conception: ≥50%• 1st Service Conception: ≥60%• Repeat Services Conception: ≥45%• Conception of Sexed-Semen: 75-80% of the

conception of conventional semen.• Pregnancy Loss: ≤5%• Age at 1st A.I.: 12-14 months for Holstein heifers.

This depends on breed and growth. Heifers need to be appropriate for height and body weight before breeding.

• Distribution of Age at 1st A.I.: ≤30 days. This is ideal and consistent with herds that grow heifers consistently and without much variability.

Metrics for Reproductive Efficiency Continued

• Interval from 1st A.I. to Conception: 95% of pregnancies created within 100-120 days after first A.I.

• Age at First Calving: 21-24 months for Holstein heifers(depends on breed and heifer growth)

Monitoring Reproduction Being proactive and committing to monitoring the

reproduction efficiency of your herd can have a positive effect on your dairy’s profitability. Managing just one or two of the monitors mentioned above isn’t enough though, as they are all tied together.

Pregnancy rates should be monitored frequently and the data is subject to lag only by how often pregnancy checks are performed. If you are lax on your pregnancy check schedule, the data will not be nearly as useful. Of course conception and heat detection (insemination risk) drive your pregnancy rates. Your ability to keep all your performance indicators within goal range will drive your entire reduction program in the right direction.

If you have questions about monitoring your herd’s reproduction performance or are struggling with any of these areas, please contact me and we can connect you with the area NorthStar Reproduction Solutions Specialists.

NorthStar now delivers moreGRAZING GENETIC options through LIC

LIC is New Zealand's leader in grass based genetics!Call NorthStar at 800.631.3510 or talk to your area

representative for a sire directory or to place an order.

7northstarcooperative.com

Bethany Marcks of Black Creek, Wisconsin; Ethan Haywood of Hastings, Michigan; and Jared Sanderson of Sandusky, Michigan each shared in $1,500 in scholarships from NorthStar Cooperative for continuing their education in the field of agriculture.

A sophomore at the University of Wisconsin – River Falls, Marcks is majoring in Dairy Science and Pre-Veterinary Medicine. Marcks has been accepted into the

Food Animal Veterinary Medical Scholars Program (FAVeMedS), an early acceptance program into the UW – Madison School of Veterinary Medicine. At UW – River Falls, Marcks is an active member of both

the Dairy and Pre-Vet Clubs. Marcks is the daughter of David and Julie Marcks.

Haywood is a sophomore at Michigan State University (MSU), majoring in Animal Science. Actively involved in FFA, Haywood received many awards

including both the National Tractor Restoration Contest Runner-Up and the State Dairy Proficiency Winner in 2014. At MSU, Haywood is actively involved in Dairy Club, Agronomy Club, and Block and Bridle Club. The son of Luke and Renee Haywood of Sand Creek Dairy, Haywood’s goal is to return to the dairy after graduating as the sixth generation on the 100 year old family farm.

A 2015 graduate of Sandusky High School, Sanderson is a freshman at MSU majoring in Animal Science. Sanderson earned the Eagle Scout rank during his

eight years with Boy Scouts, and has earned numerous awards through 4-H. Inspired by his time spent alongside local veterinarians while working on his uncle’s dairy farm, Sanderson plans to become a large animal veterinarian, supporting dairy, beef, swine and sheep producers. Sanderson is the nephew of and works for John Welter, owner of Welter Dairy Farm, LLC in Croswell, Michigan.

For more information on scholarship opportunities visit northstarcooperative.com.

Scholarship Winners Receive $1,500

Presorted Standard

U.S. PostagePAID

Lansing, MI Permit #505

P.O. Box 23157, Lansing, MI 48909-31571.800.631.3510

northstarcooperative.comReturn Service Requested

NorthStar Cooperative, its agents or employees cannot and do not guarantee the conception rate, gender, quality or productivity to be obtained in connection with the use of its products, recommended techniques or services. WE MAKE NO WARRANTIES OF ANY KIND WHATSOEVER, EXPRESSED OR IMPLIED, WHICH EXTEND BEYOND THE DESCRIPTION OF ITS PRODUCTS OR SERVICES AND HEREBY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. In the unlikely event that any of our products or services shall be proven to be defective, damages resulting from their use shall exclude consequential damages and be limited to their purchase price.

The NorthStar Cooperative annual stockowner meeting will begin at 7:00 a.m. (CST) on Thursday, March 17, 2016 at the Sheraton Inn, 706 John Nolan Drive, Madison, Wisconsin. Business will be conducted between 7:00 a.m. – 8:30 a.m. only by common stockowners of record as of December 31, 2015.

The meeting’s purpose is to discuss, defer or act upon any and all matters pertaining to the business and affairs of NorthStar Cooperative, Inc., which are properly brought before the stockowners in the course of the meeting.

MemberAnnualMeeting

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