Dairy prices have fallen to the lowest level in eight months, in the latest global auction overnight.
The average price fell 3.6 percent to $US3044 a tonne.
The size of the latest drop in international dairy prices has taken dairy farmers and commentators by surprise. Photo: 123RF
It's the lowest average price since December, and follows an unchanged price in the previous auction.
The price of whole milk powder - a key factor in setting returns to local farmers - fell 2.1 pecent.
And the volumes sold were down 6 percent.
The continued low prices are likely to put pressure on Fonterra's forecast payout to farmers of $7 a kilo of milk solids for the season just started.