Australia's wheat crop, forecast to be just over 20 million tonnes, is on track to be the lowest in a decade.

The fall in incomes for some farmers - particularly grain producers - coincides with rising fuel and electricity prices and means a large number of farmers will have less cash to spend in regional areas.

Dry conditions hit grain farmers in all grain-growing states this year, but had a particularly harsh impact on growers in New South Wales and Queensland who were also hit with above-average temperatures.

The dry conditions were so severe that ''many of Australia's most important cropping regions'' received just 40-60 per cent of their average rainfall in the crucial period between April and November, according to the latest report from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).

The report forecasts the gross value of farm production to fall seven per cent to $59 billion in fiscal 2018, down from last year's record $63 billion result.

But the fall in winter crop production, including major crops like wheat, barley, canola and others, of 41 per cent, will be much greater.

''Spring rainfall came too late to help winter crops in northern New South Wales and Queensland, resulting in lower yields. However, it did assist the recovery of delayed crops in parts of South Australia and moisture-stressed crops in the northern grains belt of Western Australia,'' the Agricultural Commodities December Quarter 2017 report said.

Major declines are forecast in the value of canola exports (down 52 per cent), barley (down 41 per cent) chickpea (down 32 per cent) and sugar (down 13 per cent).

Derek Schoen, president of the New South Wales Farmers Association, said it had been a frustrating year for grain growers in NSW.

''It's been a very problematic grain year, I don't think any district has come out unscathed in New South Wales,'' he said.

''In the north of the state some of them didn't even plant a crop, because they didn't have the moisture there to warrant them planting a crop. And then some that did plant a crop, it basically died on them, so they had a very disappointing result after a bumper year last year,'' he said.

''And then, as you move down the state, it was patchy all the way through, and then we had the late frosts in August and September that took a large swag of the canola and a lot of the barley out,'' he said.

Steve Hatfield-Dodds, executive director of ABARES, said the fall in the total gross value of farm production was mainly due to lower crop production and lower prices.

"Despite the decline, gross value of farm production would still be higher than the average of $55 billion over the past five years. This forecast reduction is likely to lead to a decline of around 3 per cent in export earnings, to $47 billion in 2017-18,'' he said.

Dr Hatfield-Dodds said export earnings were forecast to rise for livestock and livestock products (up 11 per cent to $23 billion), wine (up 12 per cent to $2.64 billion) and cotton (up 24 per cent to $2.1 billion).

"While grain prices are expected to remain low in 2017-18, prices for livestock and livestock products are expected to increase,'' he said.

But the report reveals a much more challenging picture for grain producers, particularly in eastern Australia, with the national wheat crop forecast to be just over 20 million tonnes this season.

"If realised, it will be the lowest since 2007-08. Wheat yields are forecast to be below average for all states except Victoria. Seasonal conditions in the eastern states were variable but mostly unfavourable for crop development,'' the report said.

''Wheat crops in Queensland and New South Wales were adversely affected by below average in-crop rainfall, well above average daytime temperatures and severe frost events. October rainfall aided crops in south-eastern New South Wales, Victoria and South Australia but came too late to benefit most crops in Queensland and New South Wales."