New research from Rabobank shows global production's been surging.
Fonterra's recent responded by slashing its forecast farmgate milk payout midpoint from 10-dollars to 9-dollars 50.
Fonterra Co-operative Council Chair John Stevenson says strong prices over the last year have driven a supply response.
He says it's something they've seen before, but the impact on prices isn't something farmers are particularly happy about.
