The Fonterra Internet auction for March saw prices paid for whole milk powders increasing by 0.8%, month on month. This online auction is a key barometer for world prices.

The New Zealand dairy season is coming to an end, with production still down despite late season rainfall. Milk volumes have also fallen in Australia by 4%.

The weaker Euro has meant that EU milk production is more competitive on world markets. A substantial Algerian tender for three month's supplies is also expected to increase demand.

EU commodity cheese prices have increased by 20% since last June and are at historically low levels. So no surprise that milk prices North & South continue rising thereby improving dairy farm morale.

Milk supplies are well down this year (est. at 10% or 340 Million litres below EU quota for Republic of Ireland). We will not fill our milk quota for the third consecutive year therefore dairy farmers who can produce extra milk had no concerns about leasing costs or paying a super levy.

Compound feed prices are also quite low so farmers wishing to increase production or who are short of fodder can supplement their stock at a reasonable cost. So the feed industry can look forward to increased sales volumes.

Last year we exported 6,000 heifers to Britain, Russia etc. ICBF are predicting a serious shortage of replacement heifers over the next three years (est. at 70,000) so this is good new for pedigree breeders.