Global milk prices have dropped while volumes fell in the second auction of May held by New Zealand's Fonterra Co-operative Group, according to a Reuters report.

Fonterra's GDT Price Index dipped 1.8%, with an average selling price of US$3,873 per tonne, in the auction held on May 20.

The index fell 1.1% at the previous sale, said Fonterra, which is known for brands such as Anchor, Anlene and Fresh n' Fruity.

A total of 33,677 tonnes was sold at the latest auction, falling 11.8% from the previous one, the cooperative announced.

The auctions are held twice a month, with the next one scheduled for June 3.

The auction results can affect the New Zealand dollar as the dairy sector generates more than 7% of the nation's gross domestic product.

The New Zealand milk co-operative, which is owned by about 10,500 farmers, controls nearly a third of the world dairy trade.