Australian milk production for July was down 4.2 per cent on the same time last year, according to the latest figures from Dairy Australia.
Production fell in most states, with South Australia and Tasmania the only regions recording growth.
SA production grew 9.3 per cent, while Tasmania was up 1.4 per cent.
Queensland production showed the biggest decline, down 10.2 per cent and pushing the state to behind South Australia for July production.
NSW production was down 4.6 per cent, with drops in all three regions on the back of severe drought.
Victorian production was down 4.9 per cent, with northern Victorian production down 7.1 per cent and western Victorian production down 6.7 per cent.
Eastern Victorian bucked the trend with production up 0.4 per cent.
Western Australia also recorded a large drop in production, down 6.2 per cent for the month.