The Global Dairy Trade index dropped by 1.2% at the most recent auction, falling for the first time in 12 sales.
The indicator of international dairy market sentiment has been on the increase since November 2018, but the average commodity price fell to US$3,414/t (£2,698/t) in the auction on Tuesday (21 May).
The auction index was up just 0.75% on 12 months earlier at 1,073.
Whole milk powder dropped by 2.1% to $3,180/t (£2,512/t), butter fell 3.2% to $5,297/t (£4,185/t), and anhydrous milk fat went down by 1.4% to $6,140/t (£4,851/t).
Meanwhile, cheddar supply scarcity saw a 15.2% rise to a five-year high of $4,851/t (£3,833/t).
Skim milk powder (SMP) also rose by 0.5% to $2,529/t (£1,998/t).
Expert market insight from senior commodity analyst, Peter Meehan, INTL FCStone
Global price action for dairy commodities has been somewhat mixed in recent weeks. European dairy commodity prices have behaved in a similar manner as SMP and butter continue to move in opposite directions.
The European SMP quotation pushed higher in recent weeks, while EEX SMP futures also saw gains. The European butter quotation, on the other hand, along with EEX butter futures have both continued to edge lower since the start of May.
European SMP exports hit a record 90,000t in March (+31%), while exports of butter (-24%); cheese (-6%) and infant milk formula (-7%) struggled to keep pace with last year.
Looking at milk supply, European production is set to climb back ahead of last year for March, with strong gains for Germany (+1.2%); the UK (+4.1%); Ireland (+11.2%) and Denmark (+3.0%) more than offsetting declines for France (-0.8%) and the Netherlands (-2.4%).
Weaker production in New Zealand (-8.3%), Australia (-10.7%), the US (-0.6%) and Argentina (-8.0%), however, will pull combined milk production for the top dairy-exporting countries into negative territory for March.