THE US has told Australia it will do its best to avoid targeting Australian markets with its new dairy export subsidies.

The message has been delivered at meetings with US officials and by the US Consul General Michael Thurston while touring rural Victoria.

 But local industry analysts warned that Australian producers would still be hit by the US's "tit-for-tat" response to the EU's subsidy move earlier in the year.

The Weekly Times understands Australian officials were told in Washington last week the subsidies would "aggressively" target EU markets.

They were told the US would tread "very cautiously" in Australia's markets, although there could be no guarantee they'd be totally exempt.

Mr Thurston told a breakfast at Moama last week the US's ability to assign subsidies to particular markets could limit damage for non-subsidisers such as Australia.

"We do not want to have a greater impact than necessary on the non-subsidising dairy industries," he said.

But Dairy Australia international industry analyst Michael Harvey said that even if the US did not compete directly in Australia's markets, competition elsewhere would still affect the market generally.

"At the end of the day, the subsidies will have an impact on our market no matter where they export it to," he said.

Mr Harvey said the US had a big list of countries that could receive subsidised produce, but Mexico, a key market, was no longer on it.

"This could increase the chance of the produce going into Australian markets," he said.

Australian Dairy Farmers president Allan Burgess said he'd pressed both the Australian and US governments to ensure the subsidies were "least hurtful" to Australia's markets.

"If they are going to do it, they should just do it now and not consider (subsidies) into the following year," he said.

The US announced last week it would hand out subsidies of up to $A150 million for 92,000 tonnes of dairy exports for the 2008-09 year, in line with world trade rules.

The first subsidy allocations for US skim milk powder are expected to be announced today. Exporters will be given subsidised tonnage allocations and subsidies, based on assessments of prices and what markets they are contracting into.