In the EU, milk output in March is reported to be down year-on-year due to the culling of marginal cows and reduced concentrate feeding / lower milk prices.

In the UK, milk supply is also back slightly. US milk supply is still up, but supply growth is moderating slightly at +2.1%, as spot prices are lower now in the US and there is some culling.

Drought continues to be an issue in New Zealand (see pages 38 and 39).

In summary, milk supplies are declining in the EU and the southern hemisphere, while moderating in the US.

In terms of an outlook, EU milk flows are likely to remain constrained short-term, although a less negative outlook on milk price, possibility of levy deferral and good spring weather, could assist stronger flows from 1 April.

In the US, despite forward sales and margin protection schemes, milk flows are moderating from high levels as lower milk prices and California drought concerns impact.

In New Zealand, February milk is reported to be down less than expected at -6.5% (82% of season completed). Recent rainfall has somewhat eased the drought outlook and late-season output concerns.

The price of the various dairy products remained largely unchanged this week relative to the last quotations in late February.

The EU price of WMP lifted slightly from $3,010 to $3,020. Butter also lifted slightly from $3.676 to $3,692.

In Oceania, WMP prices lifted further from $3,200 to $3,488 and butter quotes rose from $3,850 to $3,975.

In the US, WMP prices lifted slightly from $3,164 to $3,175 and butter rose more significantly from $3,662 to $3,871.