The average dairy price at the latest auction fell 6.9 percent. Photo: RNZ / Rebekah Parsons-King
Dairy prices have fallen the most in nearly a year.
The average price at the latest auction fell 6.9 percent to US$3782 a tonne and followed a 0.5 percent decline in the previous sale two weeks earlier.
It was the biggest single decline since August last year and took prices to a near three month low.
NZX dairy analyst Rosalind Crickett said the falls were expected for a variety of reasons.
"There were bearish factors at play ahead of the auction, with greater product availability, perceived market uncertainty reported by traders and pricing drops anticipated on the SGX-NZX Derivatives market across Fonterra's main reference products."
The price of wholemilk powder, which strongly influences the payouts for local farmers, fell 4.3 percent to US$3,218 a tonne.
Prices for other products were weaker across the board with falls of more than 10 percent for butter and other fats, a 7 percent fall for cheddar, and skim milk powder down 6.1 percent.
"The new production season has meant for greater product availability in the longer run, to ease inventory restrictions - putting downward pressure on prices. That said, these prices still remain above January levels," Crickett said.