Agri-business lender Rabobank says dairy prices are now up to 40 percent below the same time last year.

It says global dairy commodity prices eased a further 10 percent over the past month, as buyers felt no urgency to return to the market.

The bank says buyers are typically well stocked or holding off purchasing further supplies

It says price tightening is likely to be some way off.

Fonterra has issued its 2015/16 farmgate milk price forecast at $5.25 per kilogram of milk solids and has cut its forecast for the current season, which ends tomorrow, by 10 cents to $4.40 a kilo.