Dairy's price plunge to a six-year low yesterday also saw the New Zealand dollar slide to a five-year low, dropping from US67.05 to US65.14c yesterday.
The persistent downward pressure, threatening to destabilise the economy, is being picked to force the Reserve Bank to hasten quicker, or larger, cuts to the interest-driving official cash rate (OCR) to stimulate the economy.
The extent of the dairy losses in the latest global auction, down more than 10% overall from a fortnight ago, took markets and analysts by surprise.
With dairy prices more than 60% down on 2014, analysts called the auction a ''disastrous'', ''horrendous'' ''ongoing slump''.
Before the auction, economists had already been picking three further cuts this year to the 3.25% OCR, to return it to a record low 2.5%.
The kiwi also fell against its Australian counterpart from A89.72c down to A88.54c.
The kiwi's slide will offer welcome relief to manufacturing exporters, including Fonterra, Craigs Investment Partners broker Peter McIntyre said.
However, he described the auction as ''a shocker of a GDT [GlobalDairyTrade] result'', given its annual 20% contribution to the country's exports.
''The kiwi has deteriorated about 2% in the last two days ... there will be calls for the Reserve Bank to reduce interest rates,'' he said.
The kiwi's weakness was exacerbated by a stronger US dollar as its central bank, the Federal Reserve, reiterated interest rates barely above 0% were set to rise.
The BNZ's senior economist Doug Steel said the auction result heaped ''more pressure'' on the Reserve Bank to cut the OCR.
''If you thought dairy prices were ugly before, they are horrendous now,'' Mr Steel said.
He estimated aggregate dairy prices were at their lowest level since 2002, and would affect New Zealand's economic growth, lower the terms of trade further and widen the current account deficit.
The kiwi also fell yesterday from €60.94c to €59.59c, was down from £42.85p to £41.70p and weakened against the yen, from ¥82.74 to ¥80.65.
