After record national grain production last year put a floor under returns to farmers, despite low prices, the benefits of massive production won't be repeated this year. The dry conditions recently caused NAB to wind back its national wheat crop forecast, to 23.3 million tonnes. And although the final month of winter is about to begin, reasonable rainfall is not on the horizon. In fact, northern Victoria has just experienced a bizarre burst of heat, with the temperature hitting 26.8 degrees at Mildura on Saturday. "A majority of NSW is very dry," said Derek Schoen, president of the NSW Farmers Association. Mr Schoen said the dry conditions could potentially have "quite a severe production cost on the grain crops. So we'll be looking at some crops that will fail completely, other crops were not even planted because they didn't have enough rainfall. And then you'll have other crops that will be severely limited in their potential." He also said: "Yields are going to be below average, and in some areas they're going to be grossly below average, and then we also have the lower prices playing into that as well. So it's going to be a tight year return-wise for a lot of producers."

Some NSW crops would be limited even if the season turned and they got average rainfall from now on, he said. "You've got some crops that are actually turning blue, which is an indication of severe moisture deficiency. Those crops will recover, if they gain some rain in the short term, but the growing envelope has really decreased," he said. The latest "Climate outlook overview" from the Bureau of Meteorology, released on Thursday, said rainfall from August to October was "likely to be below average for most of southern mainland Australia". The outlook also forecast higher than average temperatures. "August is very likely to see warmer days nationwide, with most of the country having a greater than 80 per cent chance of higher than average maximum temperatures," it said. Asked why the outlook was drier than average for the coming months, Dr Paul Gregory, senior climatologist at the Bureau of Meteorology, said: "At the moment it's mainly due to what's called the subtropical ridge, which is the high pressure region over mainland Australia – and it's much higher than normal, in terms of strength."

Because this subtropical ridge was stronger and further south than normal, it was preventing cold fronts and low pressure systems from the south from moving up and bringing rain to southern mainland Australia, he said. "The only parts of Australia that got significant rainfall in July were Northern Territory and parts of northern and north-west Queensland," he said. The vice-president of the Victorian Farmers Federation, Brett Hosking, who farms at Quambatook in northern Victoria, said crops in his area were growing well but farmers were looking for rain to "set up the spring". "As we move into August the days get that bit longer, the days are a little bit warmer, and the plants are a bit bigger, so their requirement for water increases on a daily basis. Loading

"Given that we've had a particularly dry winter, we hope that doesn't mean it's going to be followed up by a particularly dry spring. That's the concern," he said. National Farmers Federation CEO Tony Mahar said: "NSW, WA and parts of Victoria are facing dry conditions and looking for some rain for winter cropping and pastures. It's getting to the point where some parts of Australia are really crying out for a bit of rain to kick their winter cereal and oilseed crops along."