Prices dropped to $US33302 a tonne.
Whole milk powder, a key indicator of farm incomes, dropped 6.7 percent.
Skim milk powder was down 6.3 percent.
Butter fell 2.4 percent but there were rises for cheddar and rennet casein.
Last night’s significant fall follows a slight drop two weeks ago, but prices had been rising before then.
Local cheese maker Rowan Cooke was devastated when he heard King Island Dairy would be shutting down.
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