Dairy is New Zealand's biggest export and China is its biggest customer for dairy, meat and logs.
Whole milk powder (WMP) prices, a key driver of Fonterra's milk price, have fallen by 18 per cent over the past four GDT auctions.
"As an exporter to 140 countries we deal with these kinds of global events all the time, but right now we're seeing the impact of multiple events," Hurrell said.
"Coupled with inflationary pressures, it's not surprising to see buyers being cautious."
Rural lending specialist Rabobank said strict lockdowns in many major cities in China were having flow-on impacts on trading partners, including New Zealand.
The bank's general manager for Australia and New Zealand, Stefan Vogel, said there are four specific impacts of the lockdowns that are set to have increasing ramifications for New Zealand agribusiness – disruptions to freight logistics, Chinese corn plantings, dairy demand and hog pricing.
"The already-stressed global container logistics situation is becoming more complicated due to massive delays around the Shanghai port," Vogel said in a Rabobank podcast.
The dry container index, which tracks average prices paid for the transport of dry bulk materials across more than 20 international routes, increased five-fold through 2021 as a result of Covid lockdowns in different parts of the world.
"While the index has since declined and is down 16 per cent since early March and 25 per cent down from the September 2021 highs, it looks likely that the massive ongoing Covid lockdowns in China will add to continued container logistics issues and keep container freight prices well above historic levels for 2022 and also likely to remain elevated well into 2023," he said.
The spread of the Omicron variant and China's "dynamic zero-Covid" policy were also bringing strong headwinds to consumption in the country's food service sector, Vogel said.
This was playing out in reduced dairy demand.
"Dairy demand in food service is slowing in China while, according to our calculations, dairy products in China produced from imported Oceania whole milk powder are now more expensive than those from locally-produced dairy for the first time in eight years," he said.
"After a record-breaking 2021 in milk powder imports by China, the demand uncertainty from Covid restrictions is likely to dampen the 'dragon's' import appetite slightly in 2022."
In addition, China's Covid restrictions had resulted in a big drop in food service sales of meat products, as well as supply chain disruptions, which had impacted hog production and prices, Vogel said.
Westpac senior agri economist Nathan Penny said overall quantities of dairy product sold to China would not change but that the composition of exports would.
Fewer people going to bakeries had already translated into a slump butter prices - down from US$7086 a tonne on March to U$$5807 a tonne at the last GDT event.
However Penny said the impact of China's lockdowns would be temporary.
He expects to see still more disruption over the next few months but for the market to recover in the second half back to March levels.
World dairy supply is constrained, dairy farm profitability in the US and Europe is "tough" while New Zealand production remained constrained due to warm, dry weather.
"We think that it's temporary, but we need to be able to test that view over the next month or two," he said.
"It's very much watch this space."
Fortunately for exporters, the New Zealand dollar has weakened substantially, which has helped to offset weaker prices.
In a little over a month, the Kiwi has fallen by more than US6c to US$63.62c.
Meat Industry Assocation chief executive Sirma Karapeeva said meat prices had been unaffected by China's lockdowns.
"At a high level, we are still in a relatively good position because globally prices are still very strong," she said.
"The Shanghai (lockdown) situation is serious but for us it is less problematic," she said.
Shanghai is an important port, but Dalian in the north is the main one for meat.
"As long as Dalian does not shut down or become congested, then we are reasonably ok," she said.
"The the big takeout in all of this is that it is challenging, but our companies are managing those challenges."
David Rhodes, chief executive of the NZ Forest Owners Association, said prices were holding but that Chinese ports were only discharging logs at half their normal levels.
"It's definitely affecting volumes but so far it's not affecting prices too much," he said.
