Tasmania experienced its driest July since 1957 and its second driest July on record, according to Bureau of Meteorology data.
Western Victoria was also much drier than usual due to a persistent high pressure system over south-east Australia for most of July.
Meanwhile drought-plagued East Gippsland benefited from widespread and above-average rain, welcomed after three years of crippling drought.
BoM senior climatologist Jonathan Pollock said the high pressure system pushed cold fronts further south than usual causing low rainfall for most parts of the two states.
"In Tasmania, there were small parts of the north, west and east that were the driest on average but Launceston, Devenport and King Island airports as well as Cape Bruny had their lowest July total on record," he said.
"We had a couple of really heavy rainfall events along the east coast so east and central Gippsland came in above average but away from that area the rest of Victoria was below average."
In western Victoria, most parts of the region were in the bottom 10 per cent of their July long-term rain record.
Climate data showed daytime temperatures were warmer than average across most of Tasmania and Victoria, especially in the north-east of Victoria.
"Night time temperatures were fairly typical for most of Tasmania and then in Victoria we had a divide where we had some really cold nights in the north-west and some really warm nights in east Gippsland," Mr Pollock said.
Nareen prime lamb producers Chris and Kate Dorahy, Cloven Hills, have about 2000 hectares across several properties in Victoria's Western District.
Between April and June they received 223 millimetres of rainfall but received only 45mm in July - half of their monthly total for the same time last year.
"Because we had such a good three months to June, that helped us carry us through a dry July but we do need more rain now," Mr Dorahy said.
"We're very well-placed for feed because of our containment strategy. We locked up our ewes until mid June, so we have good feed for lambing now.
"But most of the paddocks we can drive tractors on and we could start sowing our summer crops in four weeks if these dry conditions continue."
North-east Tasmanian dairy farmer Geoff Cox, Ringarooma, said wet conditions in the months leading up to July helped "stabilise" conditions.
"It's taken a few weeks to dry out and we certainly don't want those conditions to continue," Mr Cox said.
Despite a lack of rainfall for July, indicators predict a wetter than average August, particularly in the middle fortnight of the month, for much of Australia including Victoria away from the coast.
"It's likely that northern Victoria could be wet during the middle of August but unfortunately that above average rainfall won't extend to Tasmania," Mr Pollock said.
"The spring outlook shows a similar pattern for above average rainfall for the eastern two thirds of Australia and that covers Victoria and parts of eastern Tasmania."