Milk production growth around the world is gaining momentum, but Australia production remains in the doldrums.
The latest figures from Dairy Australia reveal Australian production was down 6.6 per cent to January.
But dairy in the northern hemisphere is returning to growth.
Rabobank senior analyst dairy and consumer foods Michael Harvey said the latest numbers were showing solid growth across most of the European Union.
"Milk production is expanding in the United States and South America," he said.
New Zealand had experienced modest growth on a milk solids basis, though the impact of Cyclone Gabrielle was still to flow through.
This is in stark contrast to the Australian industry - where the decline in production is led by NSW, which has lost almost 12pc in production so far this year.
But Mr Harvey said there were some green shoots in Australia.
The rate of decline was slowing in some regions.
The latest figures show Tasmania has reversed the trend, recording growth of 6.2pc in January to take its year-to-date growth to 0.7pc.
South Australia and Western Australia also recorded growth in January, up 1.2pc and 0.7pc respectively.
The Australian figure for January was a decline of 3.3pc, almost half the decline of every other month this season.
Victorian and Queensland production losses slowed in January - with Queensland down 1.6pc and Victoria down 4.9pc.
The overall Victorian figure masked some major regional differences - with western Victorian production up 1.3pc but northern Victorian production, still affected by last year's floods, down 10.2pc.
Mr Harvey outlined some positives and negatives for farmers as the new season approaches.
Many dairy farmers would enter autumn with good feed reserves, he said.
"The availability of irrigation water and supplementary feed (after a decent 2022/23 winter crop) is good news as preparations begin for next season," he said.
"There are some issues around fodder availability; the cost of purchased feed remains elevated.
"Fertiliser prices are heading back to more normal farmgate price levels."
The outlook on the commodity prices front is challenging.
Mr Harvey said dairy commodity markets were weaker again in February.
"This is a sustained downturn in the commodity basket," he said.
Spot prices were down 20-40pc depending on the product since the peak just under a year ago.
"The weaker fundamentals are expected to keep a lid on any price recovery in the near term," Mr Harvey said.
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Carlene Dowie
Carlene Dowie is the editor of the Australian Dairyfarmer magazine and has more than 30 years' experience as a rural journalist.
Carlene Dowie is the editor of the Australian Dairyfarmer magazine and has more than 30 years' experience as a rural journalist.
