Global dairy prices hit an eight-month low on Wednesday, Reuters reported.
Prices fell for the fourth consecutive auction ( GDT Events) and analysts have said that this could potentially lead to lower farmgate milk payment.
The GDT Price Index decreased by 3.4% from the previous event, with an average selling price of $2,970 (approx. €2523) per tonne. Prices increased in the second quarter on strong global demand and as production eased. Supply has since increased.
"Buyers are unlikely to feel much urgency to buy product right now with the prospect of more milk being available from NZ," said Amy Castleton, Feilding-based analyst at AgriHQ told Reuters.
Fonterra said that their output of domestic milk increased by 3% in October in comparison to figures from the same time period last year.
Analysts have said that the dairy giant could slash their prices before the end of the year.
The price of whole milk powder fell by 2.7% in the auction, while skim milk powder decreased by 6.5%.
GDT events said that 160 bidders purchased 35,042 MT at the auction.