Dairy prices have fallen sharply at the latest GlobalDairyTrade (GDT) auction.
The average price fell 7.4 percent.
Whole milk powder, which is a crucial product for Fonterra, slumped 10.4 percent to US$1,952 per metric tonne.
Skim milk powder prices slipped 2.2 percent to US$1,792 per metric tonne.
The auction comes six days after Fonterra cut its forecast payout to farmers to $4.16 per kilogram of milk solids, from $4.60 per kilogram.
That is well below the $5.40 that it is estimated farmers need on average to break even this season.
Today’s fall in the GDT index price follows a drop of 1.4 percent two weeks ago and a fall of 1.6 percent on January 5.
Global oil prices have also fallen sharply today.
Crude oil has fallen by 4 percent on the US market to trade at $32.01.
That has prompted another sell off of stocks on Wall Street.
The Dow Jones Industrial Average fell 1.45 percent, or 238 points in the first hour of trading.
The Nasdaq fell 1.10 percent and the SandP500 lost 1.34 percent.
European markets slumped as well. London's FTSE and France's CAC were both down more than two percent.
Oil producer BP plunged 9 percent after announcing an annual loss of $6.5 billion. That is its worst result in 20 years.
Exxon Mobil lost 2 percent after announcing a 58 percent drop in profit.
One bright spot on the markets was Alphabet. The parent company of Google leapt 3 percent in value after announcing better-than-expected profits. Its advertising revenue rose 17 percent.
That means it has surpassed Apple as the world's most valuable company.