Dairy prices fell a further 4.2 per cent at the global dairy auction overnight, continuing a trend that has seen them drop 26 per cent in four months.
Prices at the fortnightly GlobalDairyTrade auction have fallen for eight auctions in a row since February 4, with the trade-weighted price index dropping 25.8 per cent from 1482 points to 1099 during that time.
The average winning price at the latest auction was US$3756 (NZ$4456) a metric tonne, down a similar amount (25.5 per cent) from the February 4 peak as the New Zealand dollar stays high against the greenback.
The price drop was the biggest since the auction on April 1, when prices slumped by 8.9 per cent.
The latest auction saw 37,012 tonnes of dairy products sold, up from 33,677 tonnes at the previous auction.
The price for whole milk powder, the biggest category by volume, fell 8.5 per cent while rennet casein was down 10.2 per cent.
Anhydrous milk fat (down 5 per cent) and butter milk powder (down 1.9 per cent) also fell, while the price of butter was unchanged.
Skim milk powder was up 2.1 per cent while cheddar saw the biggest gain with an increase of 8 per cent.
The latest price drop comes a week after Fonterra forecast a farm-gate milk price of $7 a kilogram of milk solids for next season, down from this season's forecast payout of $8.40.
However, next year's forecast is the same as the opening forecast for this season, before milk prices started rising at auction. The GlobalDairyTrade platform is run by Fonterra, which supplies about 89 per cent of products sold at the auction by volume.