The National Farmers' Federation President Fiona Simson says strong forecast production figures for the sector were juxtaposed by a sharp decline in individual farm incomes.
The Australian Bureau of Agriculture and Resource Economics and Science (ABARES) today forecast 2019-20 agricultural production to be $59 billion, down compared to $62 billion in 2018-19, but still well above the 10-year average.
Incomes for all broadacre farms are projected to fall 8 per cent to $153,000 per farm in 2019-20 - 4% below the 10-year average.
Ms Simson said the figures were representative of the recent challenges faced by many farmers.
"In eastern Australian, unprecedented drought conditions have seen many broadcare growers go without viable winter and summer crops for consecutive seasons. Livestock producers have been forced to significantly destock and/or invest heavily in supplementary feeding.
"The result has pushed many farm businesses to the limit in terms of capital. The impact on farmers' wellbeing and regional communities also can't be under-estimated."
However, continued strong prices for primary commodities such as red meat, grain, wool and horticulture have been a buffer for agriculture's overall production figures.
Ms Simson said high prices for livestock would stand farmers in good stead as they worked towards recovery, but would prove challenging when restocking.
"Alarmingly, ABARES' reports that the nation's sheep flock is the lowest since 1904 and cattle are at the lowest number since 1990. It will likely take some years for numbers to return to average.
"On a positive note, stronger farm gate prices have better times are on the horizon for embattled dairy farmers and grains and cotton are tipped to bounce back quickly," Ms Simson said.
The forecasts were reported at ABARES flagship conference, Outlook, in Canberra today, in light of the NFF's vision for agriculture to be a $100 billion industry by 2030. The vision is supported by government and industry.
Ms Simson, said the goal was ambitious however, with a plan - the 2030 Roadmap - and hard work, entirely achievable.
"Today's figures demonstrate the strength and adaptability of our farmers, even in the face of monumental challenges.
"While many farmers remain in drought, recent widespread rains point to an easing in drought conditions and the promise that better times are ahead."
Ms Simson said high commodity prices alone would not get agriculture to its $100 billion potential.
"The 2030 Roadmap details where, across the agriculture supply chain, innovation, investment and smart policy are needed.
"Pursuing increased liberalised trade, increasing farmers access to capital, fostering a larger farm workforce and better connecting consumers with how their food and fibre is produced, are all crucial.
"Importantly, the 2030 Roadmap identifies a goal for 5% of farmers' income to be derived from ecosystem services.
"To this end, we're delighted to hear Agriculture Minister, David Littleproud, affirm as a top priority the establishment of a Biodiversity Stewardship Fund.
"An ecosystems services framework represents a valuable new income stream for farmers and a transformation of the way the intersection between agriculture and the environment is viewed.
"It would be a win for farmers and the environment."
The NFF is also pleased to see the Commonwealth, state and territory governments coming together with industry to start the planning now for the next drought.
The new AgMin Drought Working Group has the potential to radically change how we prepare for and manage through drought in this country.
I look forward to discussing this important initiative at the next COAG meeting later this month," Ms Simson said.
