Prices dropped at the latest Global Dairy Trade auction, led by steep slides in milk powder.

The GDT price index fell 5.1 per cent from the previous auction two weeks ago. The average price was US$3,302 a tonne, compared with US$3,467 a tonne two weeks ago. Some 35,748 tonnes of product was sold, down from 36,258 tonnes two weeks ago.

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"The latest GDT dairy auction wasn't so flash, with a larger fall than expected," Jason Wong, senior market strategist at BNZ in Wellington, said in a note.

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"This follows a decent move higher in dairy prices and might be the first of many indicators that will show New Zealand's commodity prices in a peaking-out phase," Wong noted.

Whole milk powder slumped 6.7 per cent to US$3,099 a tonne, its lowest since September, having reached a three-year high in the previous auction.

Skim milk powder shed 6.3 per cent to US$2,867 a tonne, from a five-year high two weeks ago.

Butter fell 2.4 per cent to US$3,886 a tonne. Anhydrous milk fat slipped 0.3 per cent to US$4,866 a tonne.

Meanwhile, lactose gained 0.6 per cent to US$787 a tonne, while cheddar climbed 1.7 per cent to US$3,869 a tonne, and rennet casein rallied 2.6 per cent to US$8,260 a tonne.

Buttermilk powder was not offered at this event. For sweet whey powder, no product was offered or sold, or no price was published for the last event.

There were 142 winning bidders out of 190 participating at the 18-round auction. The number of registered bidders was 517, up from 516 at the previous auction.