Fonterra has reported a 10% drop in the price of whole milk powder, heralding a reduction in cheese, milk and butter prices.
The powder price has fallen 34% since July.
While a drop in retail prices is good news for the shopper, it may be bad news for the wider economy, economists say.
Fonterra blamed the global financial crisis for the results of its latest internet auction yesterday, which returned an average price for whole milk powder of $4045 a tonne – 11.8% down on the previous sale a month ago.