The Global Dairy Trade auction has recorded another fall, making it eight drops in the last nine auctions, following a 'bolt from the blue' 15 per cent jump back in March.
Prices across the board fell 2.9 per cent, in the seventh consecutive negative result.
Whole Milk Powder - which has the biggest influence on Fonterra's farmgate milk price - fell 3.8 per cent and over US$130/MT to an average US$3730/MT.
On the back of a 7.0 per cent drop two weeks ago, Skim Milk Powder - Fonterra's second biggest reference product - dropped a further 5.2 per cent and US$155/MT to an average US$2971/MT.
The biggest decline, however, came from Lactose, which fell 8.9 per cent to an average US$1,127/MT - although very little product was offered.
Cheddar, which slid 9.2 per cent in the previous event, rallied slight to finish up 1.3 per cent and average US$4022/MT.
Butter, which had been hovering above the US$5000/MT mark earlier this year, softened a further 0.8 per cent to an average US$4419/MT, while Anhydrous Milk Fat dropped 0.3 per cent to an average US$5615/MT.
Butter Milk Powder and Sweet Whey Powder were not offered at this event.
The volume of product traded fell slightly from the previous event with a total of 22,405 MT of product sold to 111 successful bidders.
Fonterra chief financial officer Marc Rivers remained philosophical about the result.
"It was a little bit disappointing but not totally surprising," he told The Country's Jamie Mackay.
The Covid-19 Delta strain would have had an effect on the auction, Rivers said.
"No doubt there were a few things hanging on people's minds…Covid's certainly not over, the world's got a lot to go through yet."
However, underlying demand at the consumer level continued to remain "pretty solid," Rivers said.
"Even at these price levels, remember we're still well above the midpoint of the forecast for the new season."
Listen to Jamie Mackay interview Marc Rivers on The Country below:
Rivers wasn't too concerned that eight out of the last nine results had dropped.
"We had the big spike several events ago and since then it's been flat to slightly pulled back, but again this is in line with what we're anticipating."
On May 26, Fonterra announced an opening forecast Farmgate Milk Price range for the 2021/22 season of $7.25 - $8.75 per kgMS, with a midpoint of $8 per kgMS.
Rivers said the range reflected that the co-op "anticipated that there would be some pull back" and was still "well within the range of what we're predicting for the new season".