Westpac has shaved 20c off its 2019-20 milk price forecast, citing a more pessimistic take on the international growth outlook.
The bank was now expecting a $6.50 milk price, towards the lower end of Fonterra's own milk price forecast for this season of $6.25-$7.25.
That was despite this week's ''marginally stronger than expected'' out-turn in the GlobalDairyTrade auction, senior economist Anne Boniface said.
Overall prices were down 0.2 per cent this week. Whole milk powder prices were surprisingly strong, lifting 2.1 per cent, which was contrary to futures market expectations of a 2 per cent fall.
Recent developments in the United States-China trade war pointed to a much more enduring conflict than had previously been envisioned.