United's producer members will continue to receive reasonably strong prices for their milk for the next month or so, thereafter much will depend on milk output and whether demand holds up.
"Global dairy markets are in reasonable balance at the present time, when compared with the conditions prevailing this time last year," he added.
"Demand from countries such as China is starting to recover. Significantly, there is little or no surplus dairy output from New Zealand and Australia overhanging the market at the present time and production in the United States has also fallen back over the past number of months.
"Local milk production has been hit badly by the effects of the weather in 2009. As a result buyers taking part in United's monthly auction are having to pay a premium to the market to secure the winter milk they need. This pressure will, almost certainly, ease as milk output increases during the Spring months."
Looking further ahead, David Dobbin is conscious of the almost 300,000 tonnes of intervened dairy products, which are scheduled to be released back on to the market by the European Commission from May onwards.
"This will coincide with the period of peak milk output in Northern Ireland," he further explained.
"The sale and release of intervention stocks will, inevitably, bring downward pressure on international dairy markets during the late spring and early summer months. Last year a significant amount of the peak production was sold into intervention. This year we want to avoid intervention which would only support a farmgate milk price of around 18 pence per litre. For this to happen the market will have to absorb over 300,000 tonnes of powder and butter more than last year not including any sales out of intervention. Therefore the key factors determining forward milk prices will be the actual levels of milk output achieved across Europe and how responsible an approach the EU Commission take over the disposal of last year's intervention stock," Mr Dobbin added.
"It takes very little surplus production to have a dramatic effect on market prices. Intervention is nothing more than a safety net for producers. The current recovery has been mainly driven by milk and product shortages. If these end so to some extent will the recovery. If milk output rises too much it will result in surplus stocks and the industry being forced to sell into EU intervention again this year. Farmers should be under no illusion, if this happens we will be back in the realms of an 18 pence per litre farmgate price."
Mr Dobbin concluded:
"Prospects do look better than last year for the next few months. But after that, there are a number of factors coming into play which could have a significant impact on the overall dairy market. And at this stage it is too early to predict how exactly these matters will be played out!"