For more than a century, the Akubra hat has been a symbol of the Australian bush and rural life, but a huge shortage of domestic rabbit suppliers is forcing the iconic hat brand to turn offshore for its raw materials.

Managing director Stephen Keir says when his family established the business during the rabbit plagues of the early 20th century, it was thriving.

"Rabbit fur is the best fur to make our hats out of, and the rabbit industry in the '40s and '50s was absolutely enormous, wild rabbits that is, there was no farmed rabbits in those days," he said.

"It started off in Tasmania as a fur-cutting business and we moved up to Sydney and started making hats. My great-grandfather married the boss's daughter and generations later I'm here now."

Today the factory is based in Kempsey, New South Wales and employs about 85 local workers.

But Mr Keir says over the past decade it has become harder to keep production going.

He says it takes about 12 rabbit skins to make every hat - and the domestic supply has all but vanished.

"When that Calicivirus was released, exported rabbit meat was quarantined and we had a lot of suppliers of wild and tamed skinned rabbits at the time and they've basically gone," he said.

"They went from eight good suppliers to one and that's never recovered, and the whole industry sort of started to collapse in a way, and the whole rabbit farming industry is struggling. They've got costs that are exorbitant. It's sad."

Australia's rabbit population wiped out by virus

Sorry, this video has expired A worker shaping rabbit-fur hats at the Akubra factory, it takes about 12 rabbit skins to make each hat.

Griffith University wildlife disease ecologist Hamish McCallum says the rabbit Calicivirus was introduced to Australia in the 1990s to control rabbit numbers and protect native wildlife.

"In the areas where it's been most effective - which is in the arid and semi-arid regions of Australia - it has reduced rabbit populations by 90 per cent," he said.

"The rabbits will develop symptoms quite rapidly after being infected, probably within three days, and not all of the ones infected will die but many of them will die within three or four days of the virus becoming obvious."

But the disease also had a devastating impact on rabbit meat farms. Growers have had to choose between expensive vaccinations to protect their breeding stock or risk an outbreak of the disease.

Today, there are only a handful of rabbit farms left in the country.

Andrew Denning has been operating BunnyBiz in Brisbane, selling rabbit to butchers and restaurants for the past 20 years.

Although he has hundreds of rabbits in freezer storage, he says when that supply dries up he will not be able to meet demand for the furry commodity.

"Right now it's not looking good, it's very, very hard to get a farmed rabbit on a restaurant plate or at a butcher or delicatessen at the moment, anywhere in Australia but especially in Queensland," he said.

"There's some very small family-owned operations that are still around but certainly the ... three largest commercial operations all closed within about 12 months of each other last October."

Importing fur from Ukraine, selling hats to China

Mr Keir says he does not have any choice but to source his rabbit fur from overseas.

"I'm probably importing 65-70 per cent of what we use now," he said.

"We just can't get it here. And what we can get is expensive and not of very good quality so we have to supplement that with stuff from overseas. Basically I can import fur from France and put it on a plane and have it here within a week."

Akubra managing director Stephen Keir at the company's factory in Kempsey, New South Wales. ( ABC News: Alyse Edwards )

But even that lifeline is not secure.

Akubra's biggest supplier is Ukraine, and worsening political unrest in the country is making it hard to do business.

But despite the logistical and economic challenges, Mr Keir says he is determined to keep production and jobs safely within Australian shores.

He says the hat remains hugely popular in regional and rural Australia and, as well as a five-year contract with the Australian Defence Force, some unlikely customers look set to keep the factory in operation.

"Eight years ago, we got contacted to sell 50 hats into Tibet, and I thought ok, well we will sell 50 hats into Tibet and that'll be the first and the last we see of that, and now he's our biggest selling export customer," he said.

"This year, he'll probably take about 12,000 hats from us, and China is just going gangbusters with our product. Obviously that excites us because we're exporting, not importing, and it's good for this little factory.

"We think the future is positive. We're proud Australians and that's the way we want to stay."