The Global Dairy Trade (GDT) index, an indicator of market sentiment dropped on 7 March for the second time in as many auctions, falling by 6.3%.
The fall takes the index to its lowest point since October 2016, paying an average price of USD3,512/tonne (£2,881/t).
The two largest traded commodities on the market, whole milk powder (WMP) and skimmed milk powder (SMP) experienced the two largest falls, tumbling 12.4% and 15.5% respectively.
The fall had been predicted by analysts, following the index’s 3.2% drop a fortnight ago, as well as declining NZX futures prices for WMP and SMP.
Fonterra, the owner of the auction, has also increased volumes of milk powders sold at the auction by 25,000t due to high production following the recent good weather.
Despite the falls, the index remains 93.6% higher than at its lowest point back in August 2015, when UK farmgate milk prices were 23.34p/litre.