Whole-milk powder prices slid to the lowest level in 13 months after Northern Hemisphere producers boosted output.
Powder for November delivery fell to US$3235 a tonne, the lowest level since August last year, from US$3359 three weeks earlier, at Fonterra's GlobalDairyTrade online auction.
The near-term contract fell 3.3 per cent, according to a trade-weighted price index from the company.
Whole-milk powder has slumped 35 per cent since reaching a record US$4958 a tonne in March as high prices spurred farmers in the United States and New Zealand to boost output.
Declining prices may help cap global food costs that rose in June for the 10th time in the past year, staying near a record reached in February.