Belts may need to tighten even further for dairy farmers as global milk prices continue to fall.

For the third time in a row, prices are down at the Global Dairy Auction, this time by 3.6%.

Whole milk power prices - which are central to Fonterra's farmgate milk price forecasts - dropped by 4.3%.

Federated Farmers dairy group chair Andrew Hoggard says certainly the start of the season will be tough.

"The expectation is hopefully that finally everything will pick up throughout the season, so we might finish with a semi decent payout at the end of next season. But expect the lean times to continue throughout this year for sure."

It's the third decline in prices in a row.

Causes include a flood of milk into the markets from European producers, and ructions in Russia, but the biggest factor is the slowdown in the Chinese economy.

KPMG's agri-business specialist Brent Love says it's all happening at an unseasonal time.

"Usually at this time of the year the Fonterra product has usually got the market to itself. This is something we haven't seen before."

Rural economists are predicting a 10 cent fall this year in Fonterra's milk payout.

ASB rural economist Nathan Penny says he expects a payout of $4.60.

But he believes things are improving, and that will lift to $6.20 next year.

"We do expect a rebound for this year, but I guess at this stage we are just a little bit concerned that the rebound won't be as big as we were anticipating."

Nathan Penny says at the moment though with prices this low, no one's making any money.