New Zealand commodity prices fell for the eighth consecutive month in October, to the lowest level since March last year.

Bank of New Zealand is watching dairy prices closely but has faith in farmers' ability to manage finances through dips in the commodities cycle, says chief executive Anthony Healy.

The head of Fonterra says the growing Ebola epidemic could cost the company $150 million.

Fonterra said it plans to build two new milk powder driers at its Studholme site in South Canterbury.

World dairy prices showed signs of levelling off today with the GlobalDairyTrade price index gaining 1.4 per cent at the fortnightly auction.

New Zealand's "rock star" economic growth of the past couple of years has been attributed to two things: high dairy prices and the Christchurch rebuild.

New Zealand commodity prices fell for a seventh consecutive month to an 18-month low in September, led by declining dairy prices.

Fonterra has just announced a cut to its forecast farmer payout - from $5.30 a kg of milksolids - down from $6.00.

Shares in Chinese baby-milk maker Beingmate Baby & Child have rallied sharply since Fonterra entered an alliance with the firm, which includes the Kiwi dairy giant buying a 20 per cent stake in its new partner.

New Zealand rural confidence levels have fallen to a two-year low thanks to plunging dairy prices, according to Rabobank's latest quarterly rural confidence survey.

Fonterra is expected to reveal operating earnings at the lower end of an already published forecast range for the year to July 31 when it reports its result tomorrow.

Danone Nutricia, one of the infant formula companies caught in the Fonterra whey protein contamination scare, says it is still feeling the effects of the incident one year on.

Dairy farmers in this country can expect to come under financial pressure if milk powder prices remain low and tensions in Europe continue to mount, say economists.

Fonterra is pinning its hopes on a tie-up with Chinese infant formula giant Beingmate as it pushes into China's lucrative baby milk market.

Westland Milk Products, the Hokitika-based dairy cooperative, has overtaken rival Fonterra in cutting its forecast payout to farmers.

Fonterra says it plans to spend about $1.17 bon taking a 20 per cent stake in China's Beingmate Baby & Child to boost its baby formula aspirations there.

Dairy prices showed signs of stabilising overnight, with the GlobalDairyTrade main price index slipping by just 0.6 per cent.

Danone is fighting to keep its New Zealand lawsuit against Fonterra live and is appealing the High Court putting the case on hold.

Dairy product prices slumped to the lowest level since October 2012 in the latest GlobalDairyTrade auction, paced by whole milk powder and cheddar.

Commodity prices fell for a fifth straight month, led by whole milk powder, reflecting a build-up of inventory in China and strong local milk production.

A sharp reduction in Fonterra's milk price will put the squeeze on the industry and rural communities will feel the brunt of the economic impact.

Fonterra has reduced its latest forecast farmgate milk price $7.00 to $6.00 per kgMS - a total drop in payments to farmers of $4.3 billion from last season.

Fonterra says it's 'realigning' its packing operations at its Canpac plant in the Waikato - and 110 jobs may be lost as a result.