Despite continued weakness, banks' economists are sticking with their forecasts, although economists acknowledge the downside risks.
Westpac senior agri economist Nathan Penny sees a $9.25 milk price, even though he expects prices to remain soft over the next month or so.
Penny expects prices to regain some lost ground and then strengthen into the end of the year.
"With that in mind, we continue to toe the line with our 2022/23 milk price forecast of $9.25/ kg, while continuing to note the downside risks to this forecast," Penny said in a commentary.
Prices have effectively been on the wane since March.
Since then, whole milk power prices have plunged by around a third, while overall prices are down 29 per cent.
Penny noted however that prices were extraordinarily high in March.
In annual change terms, the price decline was a more modest 3.5 per cent for overall prices and 9.8 per cent for whole milk powder prices.
Looking over a longer period, today's prices were 3.4 per cent and 2.7 per cent above the five-year average for overall and whole milk powder prices, respectively.
"However, global dairy supply remains very weak, and we continue to expect Chinese demand to rebound over coming months as Covid restrictions ease further and policy stimulus takes hold.
"On that basis and with the NZD/USD still supportive, we still expect a healthy milk price this season," Penny said.
ASB Bank, which has a $10/kg forecast, said GDT auction prices had held up better than generally expected.
Economists noted that supply remained constrained.
"Domestic production is at seasonal lows and production signals from New Zealand and abroad don't look that flash either," ASB said.
Rabobank senior agricultural analyst Emma Higgins said the bank's forecast would remain at $9.00.
The bank was revising its models, and would release an update in September, she said.
"But for now we are happy with $9.00/kg.
"We are quite cautious around China, and in particular the low milk production trends over the second half of this year," Higgins said.
Overall, the market faced "complex dynamics" Higgins said.
BNZ has had an $8.90 forecast on its books for some time and that there was no need to change it.
"There are some uncertainties out there both in the supply and demand, and in trade logistics," BNZ economist Doug Steel said.
2022/23 forecasts
Fonterra - $8.75-$10.25/kg, $9.50 mid-point.
Westpac - $9.25 kg
BNZ - $8.90 kg
ANZ - $8.50 kg
ASB - $10.00 kg
Rabobank - $9.00/kg
