DRY, hot winter weather will significantly limit NSW winter crop production for a second consecutive season.
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NSW winter crop production is forecast to rise to 5.1 million tonnes, up 77 per cent from last year, according to government commodity forecaster ABARES.
In its September Crop Report, ABARES said NSW wheat production is forecast to climb to 3.2 million tonnes with an average yield of 1.45 tonnes a hectare and up from 1.8 million tonnes last year.
Barley production is forecast at 1.1 million tonnes while canola production is forecast at 370,000t.
Grain production in north of the state will be limited following the ongoing hot, dry weather.
Drought conditions are rapidly spreading south which is expected to result in further substantial downgrades to the state's winter crop.
After a promising start to the winter crop season in southern NSW, winter rainfall was generally below average and soil moisture levels fell significantly.
Northern farmers are keen to take advantage of the strong feed grain prices but need some significant rain events before committing to the expense of planting summer crops.
Southern grain markets moved sharply higher last week as the drought consumes more of the southern NSW wheat and barley crops.
Hay contractors in the NSW Riverina and Victorian Mallee are flat out cutting cereal and canola crops on the continued dry weather.
Cereal hay prices have tumbled by as much as $100 a tonne in recent weeks as more and more of the southern crops are cut.
ASX new crop wheat futures surged to $370 a tonne on Thursday but ended the week only slightly higher at $359/t.
Drought and below average winter rainfall in major grain production regions in other states continues to restrict national grain output.
ABARES forecast national wheat production at 19.1 million tonnes which is slightly up on last year's 17.3 million tonnes but 22pc below the 10-year average.
National barley production is forecast to climb 14pc to around 9.5 million tonnes, ABARES said.
Wheat and barley harvest in Central Queensland are advancing quickly as farmers make the most of hot, dry weather.
Harvest is underway across most of the Central Highlands while yields have been variable.
Most of the harvest so far has been exceeded longer term averages with wheat yields ranging from two to 3.5 tonnes a hectare, and even higher in some isolated areas.
Frost damage is evident in some areas which is eroding yield averages.
