Whole milk powder prices, the biggest contributor to Fonterra's farm-gate milk price, had their second consecutive fall in this week's GlobalDairyTrade auction.
The overall auction outcome was flat.
The 4.5% decline in WMP set prices for that product back to early April levels.
By delivery contract the WMP price fall was roughly even, barring the most long-dated contract, for which prices fell very little, ASB chief economist Nick Tuffley said.
In recent auctions, the forward delivery curve had been quite flat, implying little expected near-term change in dairy market dynamics.
It was encouraging to see higher prices for products influenced by European supply.
Butter prices rose 5.3%, cheese by 6.9% and skim milk powder edged up 1.5%, Mr Tuffley said.
The lift in overall dairy prices that was expected going forward was contingent on New Zealand, Australian and Argentinian production contracting, as well as some weakness in European production after its post-quota production surge last year.
The flattening off in European milk production would become more obvious in coming months, he said.
The auction result underscored Westpac's view that there was unlikely to be a turnaround in prices any time soon, senior economist Anne Boniface said.
While international dairy prices had been broadly evolving in line with expectations, recent strength in the New Zealand dollar was weighing on farm gate returns of exporters "of all persuasions''.
It was proving persistently stronger than had been anticipated, introducing some down side risk to NZD commodity prices across the board, she said.
Meanwhile, Fonterra-owned Tip Top is to trial online sales in China, the world's largest ice-cream market.
Research showed the total market value for ice cream sales increased by 90% between 2008 and 2014 to reach $US11.4billion.
The take-home ice cream segment, which Tip Top was targeting, remained a relatively small part of the overall category.
Initially launching a two-litre tub range, Tip Top was also considering offering novelty sticks and bulk scoop products.
