Bord Bia's Eoin Kelly reports the lower prices are a result of an increase in world dairy supplies and a slowdown in purchasing from the main importers.

An increase in output from export regions, weaker Chinese buying and the Russian ban has already caused the price of internationally traded commodities to fall 30%-45% below levels reached in spring.

With other importers unable to take up the excess product, this led to pressure on prices.

Supply growth

Bord Bia is also reporting that supply growth will lose some of its recent momentum over the next 12 months. According to Rabobank, a bottom has been reached in the international market, but competitive prices will be required to clear the international market, which is likely to take some time.

Chinese purchases from the world market are expected to remain low in the coming months. Russian imports are also expected to remain significantly reduced.

Wholesale prices

While wholesale prices in the US and EU markets haven't been hit as hard so far, stronger pressure on prices in these regions are expected in the coming months.

Rabobank suggest that upward price momentum will likely return to international and regional markets in the second half of 2015, as the deceleration of milk surplus growth coincides with the return to import growth in China, and an assumed reopening of the Russian market.