United States-Dairy farmers problems.

UNITED STATES-DAIRY PROBLEMS.

US Dairy Prices are collapsing with falling global demand, but unlike the EU, the US so far is resisting domestic industry pressure to revive export subsidies.

USDA’s Gerry Bange says cheese, butter, and non-fat dry milk prices are all collapsing, and all getting very close to US support target levels.

"The non-fat dry milk price is now down around 83 cents (US), just 3 cents above the support of 80 cents."

But so far, US Agriculture Secretary Tom Vilsack has only talked of buying more commodity for domestic nutrition programs, not renewing discontinued dairy export subsidies, which are highly controversial with Australia.

Meanwhile, a US dairy farmer denies high slaughter rates of dairy cattle in the US will flood the American hamburger market.

Recently 71,000 cows were slaughtered in one week, America’s highest slaughter of dairy cattle in 20 years.

Most of the meat is then sold to the hamburger market.

Ray Souza is a dairy farmer from northern California, and president of the Western United Dairymen:

"The national beef herd has slowed down and the dairy herd has kind of filled that gap and it’s made it so the market can accept a lot of the cattle," he says.

"And then the eating habits have changed somewhat too. Because of the economy, people are eating at fast food hamburger chains, so the demand for hamburgers has actually got a little bit stronger.

"So that has helped to absorb some of this meat."

Market analysts are waiting to see if the increase of US dairy cow slaughter rates will affect the amount of Australian meat being sold to America.

Last month, frozen beef exports to the US were up on figures from January last year.

February figures are due to come out in the next two weeks.