There is a long way to go to pull the region's worst performers up to the accepted standard, the council says.
The Waikato Regional Council says monitoring of high risk farms has revealed the dire state of some dairy effluent infrastructure in the region.
The council began a monitoring programme in July of farms considered high-risk.
Investigations manager Patrick Lynch said it has so far completed 239 inspections and found 31 per cent - or just over 70 - of these farms were significantly non-compliant.
He said it was very disappointing that some were found with only a fraction of the storage they should have, and prosecutions were imminent.
"What we've found is of real concern. Unfortunately, the state of dairy effluent infrastructure on many farms is probably worse than we had expected, with some farms only having one-thousandth of the storage they need.
"There are a large number of Waikato dairy farmers who are doing the right thing and have invested in improving their infrastructure. So instead of blanket monitoring all farms, we have focused on monitoring high risk farms - the results of that monitoring show there's still a lot of work to be done."
Mr Lynch said that over the last five years the council had taken about four or five prosecutions relating to dairy effluent each year. "Already this year we have commenced nine prosecutions and are formally investigating a further 16.
"We feel that all stakeholders in the dairy industry still have a very long way to go in pulling the poor performers up to the required standard. We will continue to monitor high risk farms and continue to make our findings known to the community," Mr Lynch said.
Industry group Dairy NZ said Waikato dairy farmers found to be significantly non-compliant weren't doing their bit for the environment and were letting all farmers down.
"We support the monitoring of high risk farms by Waikato Regional Council and the increased focus on those who need to lift their game," it said in a statement.