International dairy prices edged down at the latest GlobalDairyTrade auction, the GDT price index falling by 0.4 per cent since the previous sale last month.
Whole milk powder prices, which have the greatest bearing on Fonterra's farmgate milk price, fell by 1.6 per cent to US$2062 a tonne but the price of another key product, skim milk powder, firmed by 2.6 per cent to US$1938 a tonne.
Fonterra's farmgate milk price forecast for 2016/7 is $4.25 a kg, up 35c a kg on the previous season but still well below DairyNZ's average break-even point of $5.25 a kg.
Some economists expect the milk price to improve as the season progresses. Today's auction, and the next few, are expected to be an important guide for how prices go from here.
ANZ rural economist Con Williams said that while the "headline" dairy auction result held up with just a -.4 per cent decline, it masked troubling softness elsewhere.