Dairy prices have fallen to the lowest level in nearly two years in the latest global auction overnight.
The size of the latest drop in international dairy prices has taken dairy farmers and commentators by surprise. Photo: 123RF
The average price was down 1.3 percent to $US2934 a tonne.
It is the lowest average price since mid-October 2016, and follows a fall of just under 1 percent in the previous auction.
The price of whole milk powder, a key factor in setting returns to local farmers, fell 1.8 percent to $US2768 a tonne.
The volumes sold rose 1 percent.
Prices for the products offered were mostly weaker, with a sharp fall for cheese.
Fonterra last week reaffirmed its forecast payout for the current season at $6.75 a kilo of milk solids.
However, the lower New Zealand dollar offsets to the fall in prices because it improves export returns.