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Global dairy prices plunged by 7.4 percent overnight at the Global Dairy Trade auction.
Whole Milk Powder, which has the biggest influence on Fonterra's milk price, dropped 10.9-percent.
It comes less than two weeks after the dairy co-op drastically cut its forecast Farmgate Milk Price - with the midpoint falling from $8 to just $7.
JMI Wealth Director Andrew Kelleher told Mike Hosking the drop was expected.
He says the real issue is how long prices will stay this low for.
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