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Australia’s farmers are confronting faster-than-expected damage from climate change, which is already squeezing crop yields and threatening to drive food prices higher.
Temperatures have climbed across the country and rainfall patterns have shifted, leaving some regions wetter, others drier and unpredictable.
A consolidated national assessment in 2024 documented record heatwaves, more intense rainfall events, and worsening droughts across key agricultural zones. [1]
Extended dry spells through 2024–25 cut wheat and barley yields in parts of New South Wales and Victoria well below trend levels. [2]
At the same time erratic floods and late heat have damaged summer crops in Queensland and northern NSW reducing some expected gains. [2]
Livestock producers in the Murray-Darling Basin report weaker pasture growth and tighter water allocations that increase feed and transport costs.
As production tightens, the cost of irrigation, fertiliser, feed, pest control, and logistics has risen, adding upward pressure on wholesale and retail food prices. [3]
Analysts now warn that staple food prices could rise by roughly three to five percent per year in the short to medium term if extreme climate events continue. [4]
Changing climate in Australia: trends and extremes
Australia’s climate is already in flux with measurable trends in temperature, rainfall and extreme events.
The national climate assessment reported rising average temperatures, more frequent and longer heatwaves, and an increase in compound events such as drought paired with heat. [1]
Rainfall trends are uneven, with increases in parts of northern Australia and declines across much of the south and southwest cropping zones.
The June 2025 Australian Crop Report noted that national winter crop production forecasts fell in 2025 relative to recent seasons, with specific reductions for barley and canola in several regions. [2]
Some summer crops such as sorghum saw localised benefits from above-average rain, but those gains were patchy and short-lived. [4]
Drought monitoring tools developed by national agencies are showing tighter correlations between climate stress and declines in farm profitability. [5]
In parts of Western Australia, farmers point to multi-decadal declines in growing season rainfall even as some yields have been sustained by improved agronomy. [1]
Vulnerable crops regions and livestock
Not all crops or regions face the same risk from climate disruption.
Wheat and barley in the southeast and southwest are highly exposed to reduced winter rainfall and late spring heat stress.
Canola is vulnerable to water stress at flowering and heat during seed fill, which reduces final yields.
Cotton and sugar producers in northern Australia risk altered monsoon timing, heat stress, and flood damage.
Horticulture—fruits, vegetables and nuts—is acutely exposed because many crops lack large-scale irrigation and are sensitive to short heat spikes and late frosts.
Livestock systems are affected when pasture growth declines, forcing higher spending on purchased feed and water or moving stock to feedlots.
Dairy and beef producers in the Murray Darling Basin face lower runoff and dryer soils that constrain feed availability and increase input costs.
Soil degradation, salinity, and erosion amplify climate impacts and reduce long-term productivity in several grain belt regions. [6]
How climate disruption drives up food costs
Climate effects raise food costs through various mechanisms.
Lower yields increase the cost per unit of agricultural output and reduce supply available for domestic markets and exports.
Water scarcity raises the cost of irrigation and energy, increasing on-farm operating expenses.
Heat and moisture stress increase pest disease and weed pressure, which raises spending on control measures.
Soil damage and erosion create remediation costs and undermine future productivity.
Extreme events disrupt transport, storage, and processing, creating spoilage losses and logistics rerouting at short notice.
Higher input costs for fuel fertiliser and labour in a stressed climate environment create knock on inflation in the farm to fork chain.
Projections for food prices and consumer impact
Market and banking analysts are already flagging tighter supplies and higher commodity prices linked to recent seasons of extreme weather. [2]
Agriculture outlooks for 2025 show mixed returns, with cost pressures offsetting some revenue gains in commodity markets. [7]
Short term food price rises of three to five percent annually are considered plausible for vulnerable categories such as fresh produce, meat, and some cereals if volatility continues. [4]
Lower income households and remote communities are likely to face the greatest affordability pressure.
Australia’s export orientation can exacerbate domestic tightness if international demand bids up prices or if exporters divert stocks abroad.
Over the medium term, structural shifts such as increased imports, altered diets, or broader reliance on alternative proteins could emerge if production constraints persist.
Adaptation strategies and policy responses
Farmers and policymakers are pursuing a mix of technological operational and financial adaptations.
Breeding drought tolerant and heat-resistant crop varieties and livestock breeds is a priority for research institutions.
Investing in efficient irrigation water capture and storage can reduce vulnerability to seasonal shortfalls.
Soil health practices, including no till cover crops and organic amendments, help retain moisture and reduce erosion.
Carbon farming and agroforestry can diversify income while enhancing resilience.
Insurance and co-investment schemes are being trialled to manage income volatility and catastrophic loss. [5]
Adoption barriers remain high because of upfront cost, fragmented landholdings, and limited extension services, especially for smaller producers.
Policymakers must balance decarbonisation efforts with measures that protect food security and farm viability. [8]
What to watch going forward
Several indicators will signal whether adaptation is keeping pace with accelerating climate risk.
Seasonal rainfall departures from long-term baselines will be an early indicator of stress in cropping zones. [6]
Regional yield variance and crop failure rates will reveal where vulnerabilities are emerging.
Rates of adoption for resilient technologies such as precision irrigation, drought tolerant varieties, and soil practices will show structural change.
Movements in input costs, wholesale commodity prices, and retail food inflation will provide early warning for consumers.
Government policy shifts, including subsidy design and research funding, will strongly influence the pace and equity of adaptation.
If climate stress outpaces adaptation, expect continuing pressure on farm margins, greater price volatility, and increasing challenges for food affordability.
References
- State of the Climate 2024 – Bureau of Meteorology and CSIRO
- Australian Crop Report June 2025 – DAFF / ABARES
- Agricultural cost pressures and resilience – CSIRO agrifood systems research
- Agriculture and commodity outlooks 2025 – Banking and market analysts
- Australian Agricultural Drought Indicators and adaptation progress – ABARES / CSIRO
- Salinity and soil degradation in Australian agriculture – National assessments and monitoring
- Agricultural Commodities Report December 2024 – Department of Agriculture, Fisheries and Forestry
- Policy analysis on climate adaptation and food security – Climate Council / industry papers
- Bureau of Meteorology climate data and seasonal outlooks
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