Australia's winter crop production is expected to drop by almost a quarter this financial year amid drier conditions.
Rabobank's 2023/24 Australian winter crop forecast is predicting 48.72 million tonnes this year, that's down by 24 per cent on last season's record-breaking 63.85 million tonne national crop.
The "more modest" forecast follows three consecutive years of strong harvests, and is just below the five-year average.
Report co-author Edward McGeoch says prices are expected to provide a silver lining for farmers off the back of the lower production forecasts.
The drier conditions nationally mean less supply, which is pushing local prices higher for wheat and barley.
Canola prices are also higher because of international demand.
"Production from Canada and the European Union are down which is driving prices up globally," Mr McGeoch told AAP.
Drier weather conditions across many cropping regions and the prevailing El Nino climate outlook are playing a significant role in the tighter supply outlook.
"Production expectations are varied across regions with some farmers expecting to see elevated production due to positive growing conditions," he said.
"While others will be facing tough decisions as to whether it will be worth harvesting their crop."
The forecast says all cereal and coarse grain production – including wheat, barley and oats – will likely decrease this season.
Wheat will see the biggest declines, down to 26.9 million tonnes, which is a 26 per cent drop on last season.
Winter crop production is expected to fall across all states, except Victoria, where the bank sees it rising by eight per cent from last year.
