Government authorities say farmers are having their best year ever. 

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) says Australia's farmers are expected to reap a record $66 billion for their produce this year.

Food prices are up by more than 15 per cent, as consumers willingly pay more for red meat.

The commodity forecaster says good weather conditions and a huge grain harvest have led to an 8 per cent increase in the value of food and fibre compared to last year.

ABARES says 2020-21 will see a $5 billion jump on Australian farming's second most valuable year, which was recorded in 2016-17.

ABARES acting executive director Jared Greenville says average farm incomes are expected to increase by 18 per cent this year.

“We've seen the agriculture sector really weather the storm of COVID-19, and largely it is on the back of pretty awesome seasonal conditions that we've had in the eastern states over this last growing season,” he said.

“And we're seeing the biggest ever wheat crop and near-record winter crop production.

“Most [farmers] are doing pretty well.

“We've got farm cash incomes — the returns that farmers are actually getting — pretty high in NSW, above the 10-year average, but across the rest of the country we're looking at relatively average profit levels, but that's still a big turnaround on the last couple of years when they've been well below.”

The gains are not evenly spread, with the value of the grains sector surging by almost 60 per cent gross on last year, while there has been an 8 per cent fall in the value of livestock production.

Farmers are eschewing record prices for sheep and cattle, choosing instead to keep them on farm for breeding. Years of drought decimating flock and herd numbers appear to be making farmers less likely to send their stock to slaughter. 

Looking forward, the value of total production is forecast to fall to $63.3 billion in 2021-22, with Victoria and New South Wales unlikely to be able to replicate their record 2020-21 harvest.