The futures market is predicting milk powder prices to drop in response to the coronavirus outbreak

The deadly virus has thrown financial markets into reverse after a strong 2019.

ASB senior rural economist Nathan Penny says tonight's Global Dairy Trade auctions will show exactly how milk powder will be affected.

But he says the market's pointing to a five to 10 percent drop in prices.

He says dairy markets are nervous about the potential price drop - because China has the biggest dairy market in the world.