International dairy prices fell for a seventh consecutive time in Fonterra's latest online auction.
The average price for a basket of products in Fonterra's online auction fell 2.1 per cent yesterday.
The price of skim milk powder across all contracts was down 6.2 per cent on the previous event and anhydrous milk fat was down 11.2 per cent, although whole milk powder increased 1.1 per cent.
BNZ economist Doug Steel said that generally international dairy prices were drifting lower.
"There's still some encouraging signs in a sense that they're not falling that sharply for one, and two, given what's been going on they've been holding in there quite well in the context of the big amplification in global growth fears," he said.