EU milk production for July 2016 fell 1.4% on the corresponding month last year, the latest figures from the EU Milk Market Observatory (MMO) show.
This is the second consecutive drop in production this year after June 2016 production decreased 2.3% year-on-year.
Some 19 Member States reported a drop in July milk collections compared to July 2015.
While there was a decrease in milk production for July, milk production between January and July 2016 was up 2.6% on the same period in 2015.
Earlier this month, the European Commission cut its milk production forecast for the rest of 2016. The provisional production figures from the Commission suggest that 2016 volumes will end 0.9% higher than in 2015.
This figure is down from the 1.4% estimated by the Commission earlier this year and it attributes dairy herd renewal together with the recent market measures adopted by the Commission to the reduced output.
Significant drop in SMP intervention volumes
Meanwhile, volumes of skimmed milk powder (SMP) going into the public intervention system have been in decline for a number of weeks.
For the week ending September 18, no SMP was offered to the measure leaving volumes in the measure at 255,894t.
Ireland hasn't offered SMP to intervention since mid-August and to date this year, there is just under 30,000t of Irish SMP in the measure.
While SMP volumes in intervention have fallen, Ireland has been offering higher amounts of butter into private storage since the beginning of August.
Ireland has offered just over 10,000t of butter to the measure to date this year, with the latest amount of 111t being offered in the week ending September 18.