Prices in the latest Global Dairy Trade auction have continued to plummet, with the overall index dropping 5.0 per cent overnight.

This marks the third fall in a row, following a 1.5 per cent rally in June, and the seventh drop out of the last eight auctions.

Whole milk powder (WMP) - which has the biggest influence on Fonterra's farmgate milk price - fell 5.1 per cent, on the back of a 3.3 per cent decline in the previous event, to an average US$3757/MT.

Skim milk powder (SMP) - Fonterra's second-biggest reference product - plunged 8.6 per cent to an average US$3709/MT, continuing its downward trajectory from the last event where it dropped 5.2 per cent.

Just four weeks ago, both milk powder products were commanding well above the US$4000/MT mark.

All other reference products on offer also fell, with butter - which rose 9.1 per cent two weeks ago - down 2.1 per cent to an average US$5530/MT.

Anhydrous milk fat followed suit with a 2.1 per cent down also, to an average US$5580/MT.

Cheddar dropped 2.0 per cent to an average US$4825/MT.

Butter milk powder was not offered at this event, and there were no figures available for sweet whey powder or lactose.

23,219 MT of product was purchased by 109 successful bidders.

For the 2021/22 season, Fonterra's forecast farmgate milk price is $9.10 - $9.50 per kgMS, with a midpoint of $9.30.

On June 23, Fonterra lifted its 2022/23 forecast by 50 cents to between $8.75 - $10.25 per kgMS, from an opening range of $8.25 - $9.75.

The revised 22/23 forecast midpoint, off which farmers are paid, stands at $9.50.