Fonterra Cooperative Group said milk collection was up 4.1 per cent for the season-to-date in December as a mild start to summer supported pasture growth.
The dairy giant collected 913.6 million kilograms of milk solids in the seven months to December versus 877.6 million/kgMS in the same period a year earlier.
North Island collection was up 3.7 per cent at 566.6 million/kgMS while South Island production lifted 4.8 per cent to 347 million/kgMS.
"Overall, good animal health and favourable weather resulted in milk volumes ahead of last season, which was a three-year low where weather conditions and other factors had an adverse impact," Fonterra said.
Fonterra interim chief executive Miles Hurrell told NZME's The Country radio show earlier this month that the company still expects production to be about 3 per cent higher this season than last.
In Australia, meanwhile, milk collection for the six months to December 31 was 72.4 million/kgMS, down 14.3 per cent on the same period last season.
In December, collection reached 13 million/kgMS, down 18.2 per cent.
"High input costs and poor seasonal conditions continue, resulting in increased cow cull rates, decreasing the season's milk production," Fonterra said.
The latest forecast from the Australian Bureau of Agricultural and Resource Economics and Sciences is for milk production to fall by 4 per cent to a 20-year low this season.
Fonterra also said more than 500 McDonald's restaurants across China now serve New Zealand sourced product for soft serve ice cream.
"McDonald's China chose to source milk powder from Fonterra to make their vanilla ice cream after our product received the highest sensory score - flavour, colour, stability - in their pilot," said the head of Fonterra Greater China, Christina Zhu.
According to Fonterra, China is the world's biggest ice cream market, consuming around 4.3 billion litres in 2016.