Overall prices fell 3.6% this week, with key whole milk powder prices down 4.6% and other prices mixed.
It was now clear that dairy markets were well-supplied and production fears around drought in New Zealand were ''overblown'', ASB rural economist Nathan Penny said.
The global glut of milk was set to continue ''a while longer'' and, as a result, dairy prices were back close to their 2014 lows.
While the recent price falls were too late in the season to do too much damage to the bank's $4.60 milk price forecast for this season, next season might not be so lucky.
ASB's forecast of $6.20 for 2015-16 was under threat and it had placed it under review, he said.
If New Zealand, and global, milk supply remained high, prices might take longer to recover than was currently anticipated.
In that situation, a sub-$6 milk price became more likely, Mr Penny said.
Westpac senior economist Michael Gordon said the bank expected a milk price of $5.70 for next season, slightly below the average of about $6 for the past decade.
Federated Farmers dairy chairman Andrew Hoggard said a lift in this season's payout appeared less likely and it made the prospects for the advance rate for next season weaker as well.
''We really do need to see some signs of a recovery and, so far, we are not seeing them,'' Mr Hoggard said.
The Chinese market was weak, European exports to Russia had been dislocated, dairy regions around the world had enjoyed good weather, and the northern hemisphere was awash with cheap feed grain, he said.
''For most of these things, there is not much we as a nation or industry can do. That includes the European trade dispute with Russia which escalated out of the Ukraine conflict.
''Anything which can be done at the international political level to restore access into what is the second-largest dairy market in the world must be welcome,'' he said.
Struggling farmers needed to talk to their banks and accountants.
For those in drought-affected areas, there was a real need to keep a close watch on how much feed they had on hand and how much they would need through to the spring.
Labour finance spokesman Grant Robertson said the halving of global milk prices since the peak last year had created an ''economic black hole'' of almost $7 billion.
The Government's over-reliance on the dairy industry to grow the economy had backfired. A diverse economy, that created well-paying jobs across all industries, was needed, Mr Robertson said.
