Australian milk production fell 6.9 per cent in 2016-17, according to the latest figures from Dairy Australia.
But June production was up 2.2 per cent on the same time last year.
The big drop in farmgate milk prices in southern states was reflected in the figures for Victoria (down 8.2 per cent), South Australia (down 8 per cent), Tasmania (down 5.4 per cent) and to a lesser extent NSW (down 4.9 per cent).
Production also fell in Western Australia (down 1.9 per cent), while Queensland bucked the trend with a slight increase in production (up 1 per cent).
The drop had little impact on the market share of different states with Victoria still by farm the largest dairy region, producing 64.1 per cent of the nation's milk, followed by NSW with 12.4 per cent and Tasmania with 9.3 per cent.
The breakdown of Victorian figures shows Northern Victoria took a big hit to production, down 16.5 per cent for the year.
Western Victoria was down 4.2 per cent, while Eastern Victoria/Gippsland was down 4 per cent.
The slump in Northern Victorian production means it is now the smallest milk production area in the state at 30.3 per cent of total production.
Western Victoria remains the state's and Australia's largest milk-producing region with 35.5 per cent of the Victorian market. while Gippsland has a 34.2 per cent share.
All regions of NSW experienced a decline but the big impact was in the southern region, which is more exposed to export market pricing, where production was down 7.3 per cent.
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