Prices have held steady in the global dairy auction overnight.
Dairy cow. Photo: SUPPLIED
The average price was unchanged at $US2336 a tonne.
It follows a 0.4 percent drop at the previous auction.
The important whole-milk powder price rose 1.9 percent to $US2079 a tonne, which is the first rise since May.
Skim-milk powder price fell 1.1 percent to $US1927 a tonne, while butter and cheddar also dropped.
Prices remain well short of the break-even range for farmers, who need about $US3000 a tonne.
Compared to prices this time last year, whole milk powder is up by 19 percent and skim milk powder is down 9 percent, but that was eroded by the stronger NZD, which is 6 percent higher than this time last year.
AgriHQ dairy analyst Susan Kilsby said whole milk powder futures prices had generally fallen by US$20 to $50 per contract since the previous Global Dairy Trade (GDT) event, however yesterday prices did lift for some of the later dated contracts.
"Given the firmer prices recorded on GDT for WMP we are likely to see a positive reaction in the NZX Dairy Derivatives market today".
'Global milk supply may slow down a little bit quicker than previously anticipated as the European Union has agreed to provide more than $1bn in additional aid for its farmers' - RNZ's Alexa Cook discusses the dairy auction
EU boosts aid to farmers
The European Commission is providing another €500m from EU funds for additional aid for its farmers and has announced a €150 million aid package specifically to provide an incentive to reduce milk production.
Susan Kilsby said it would have flow on effects for New Zealand.
"The additional aid granted by the EU will help to slow growth in milk production - a trend that has already started to occur, while the intervention programme will help soak up any extra SMP that is produced.
"This will be beneficial to the market in the short-term as it will allow global supply and demand to rebalance more quickly, but continuing to support inefficient farms means we are likely to be faced with over supply situations again in the future".