The agri-business professor said he was not surprised by the current milk price. He is expecting milk prices will fall further and stay low for a few years.

Some people call him "Doctor Doom", because he has been talking about this bubble since 2007 and that milk prices will revert to the mean price, long term average, which is about $4 (16.8 c/l).

Professor Gow said international dairy prices were being driven down as EU and US increase their milk production.

He also said “On top of that we’ve got a double whammy, because China has also dropped demand, Russia is out of the market and now we’ve got a mountain of supply building.”

Meanwhile, agri-food analyst Keith Woodford quoted about 800,000 tonnes of milk powder in China, so five months supply, there rumours that the warehouses in New Zealand are full, as well as in Europe and other places, so there is a milk mountain building out there, or at least there are rumours of it.

Gow said: "We’ve got decreased demand, we’ve got excess supply sitting inside storage at the moment, we’ve got increased production going on, and so you’ve got this double whammy effect which will keep milk prices down for a substantial period of time."

This is the scenario until a major weather event somewhere in the milk production world takes out a sizeable chunk of milk production or demand for dairy products increase at a higher rate.

Fonterra are expected to lower its payout of $5.25 (22.1 c/l) for the 2015/16 season at their board meeting on 7 August.