"Increasing productivity has been the key to the continued success of the agriculture sector. ABARE farm surveys data shows that Australian grain producers have continually pursued more efficient ways to produce more output from less input," Mr Glyde said.

"The OUTLOOK for grain prices in 2007-08 is strong. The pool return for Australian premium white wheat (APW 10) is forecast to increase by more than 50 per cent on the previous year, while Australian malting barley prices are forecast to remain high at around $346 per tonne."

Mr Glyde explained that strong growth in global demand, including demand for grains and oilseeds as an input to biofuels production, was contributing to the positive price OUTLOOK.

"However, the ability of growers to capitalise on these prices has been hampered by poor seasonal conditions," cautioned Mr Glyde.

"ABARE estimates that in 2007-08 wheat production will be around 12.7 million tonnes, barley production will be around 5.5 million tonnes and canola production around 931 000 tonnes."

Although these winter crop production levels are significantly higher than production in 2006-07, they remain well below average.