Rising global supplies of agricultural products and drier conditions in Australia are further eroding the value of the nation's farm production output in 2023-24 - now tipped to dip to $78 billion.
The forecast total value of Australian agricultural production has slipped $8b in the past three months alone, and is now $16b below last financial year's record $94 billion result.
However, the Australian Bureau of Agricultural and Resource Economics and Sciences is still tipping the slimmed down result will be the third highest on record.
Lower global prices and a reduced grain harvest will also hit farm export values, tipped to fall by $11b from 2022-23's record $78b to $67b.
Although on an historic scale, exports, too, will still be robust with ABARES tipping the second highest farm export on record.
Crop export values were expected to fall $11b to $39b, however livestock export values would likely remain firm because of higher export volumes, reflecting higher livestock turn-off rates, although offset by lower global prices.
Acting executive director of ABARES, David Galeano, said crop production prospects had been mixed during winter and spring, and despite recent rainfall events in the eastern grain belt, summer crop areas were expected to fall.
Prices for most agricultural commodities had fallen, too, especially livestock.
The drier conditions followed record-high crop and sheep and cattle production levels last financial year.
Crop volumes were tipped to be 19 per cent below from last season's record highs, while at the same time, ABARES said domestic prices for most crops were likely to be down during 2023-24 as they largely followed global prices.
Meanwhile, global markets were under pressure from higher crop production and experiencing less price volatility than last year.
Drier conditions and lower commodity prices mean average broadacre farm cash incomes are forecast to fall strongly in 2023-24- David Galeano, ABARES
The combination of less production and lower prices would cut the gross value of crop to $46b in 2023-24 - about $12b less than last year.
Below-average rainfall and low soil moisture levels had challenged early crop planting prospects.
"Drier conditions and lower commodity prices mean average broadacre farm cash incomes are forecast to fall strongly in 2023-24," he said.
In total, Australian crop production values were expected to fall by $12b, while livestock production values were also forecast to decline in line with this year's price falls because of lower pasture availability and increased herd and flock stock turn-off rates.
Beef and veal output was set to jump 26pc for the full financial year, and sheep meat production by 15pc.
However beef industry production values would fall about $3b to $12.1b, while sheepmeat production was expected to be down in value by around $900 million to $3.7b..
Milk and wool production values were forecast to be down slightly to $5.9b and $2.9b, respectively.
However, despite the drier conditions and fewer dairy cow numbers, a small increase in milk volume was tipped.
ABARES attributed the increased milk yields to improved pasture and fodder quality and the fact that drier conditions tended to support better dairy cow health.
The combined production values of pigs, poultry and eggs were set to rise slightly to $6.8b, mostly reflecting robust demand for chicken meat.
Although the overall slide in farm sector returns was a setback, Mr Galeano noted how the past three years of high incomes had allowed broadacre farms to build up liquid assets "which should help cushion the forecast downturn."