Agriculture Minister David Littleproud is bullish Australian agriculture can become a $100 billion industry over the next decade despite drought sapping annual production.
The Australian Bureau of Agricultural and Resource Economics' latest outlook predicts farm production will fall by four per cent in 2018/19 to $58 billion.
Crippling drought across large swathes of eastern Australia is expected to result in an 11 per cent fall in crop production, with winter crops - those harvested in spring or summer - significantly lower.
Production of livestock and livestock products is expected to dip by two per cent this year, with the drought also affecting milk and wool output.
"Things have been tough, but it's not our first rodeo and it won't be our last. It will rain and when it does rain we're going to make a quid," Mr Littleproud told the ABARES Outlook conference on Tuesday.
"We should be very proud of the fact that that's only down from our high of $63 billion, which in the current conditions, is quite impressive."
He said free trade agreements along with investments in research and development were the right settings to reach $100 billion by 2030 in the face of an increasingly extreme climate.
ABARES executive director Steve Hatfield-Dodd said tough choices were needed to reach $100 billion by 2030.
He listed attracting workers and investors to agriculture, boosting performance through innovation, promoting on-farm resilience and risk management, persisting with water reforms and responding to changing consumer expectations.
"We should be mindful of the substantial, and sometimes painful, reforms that underpinned the growth achieved in recent decades - and that favourable global prices account for 90 per cent of past trend growth," Dr Hatfield-Dodds said.
Fewer live animal exports have also contributed to the fall, largely due to exports being stopped during the northern hemisphere's summer months.
Western Australia has bucked the trend, buffering overall production with one of the biggest winter crop harvests on record.
Farms are expected to be less profitable than the past two years, with the average income for all broadacre farms projected to fall by 18 per cent from $201,300 per farm in 2017/18 to $173,000 in 2018/19.
WA's strong crops mean average incomes will rise from $368,800 to $490,000.
Mr Littleproud urged Labor to back free trade deals with Indonesia and Peru, insisting they could pass parliament despite the Senate having just two sitting days left before the election.
"If there's a will, there's a way," he said.
The ABARES report also highlighted trade tensions between China and the United States and noted competition among grain and livestock exporters.
Despite trade risks, the forecaster predicted the value of agricultural production to be worth about $59 billion in 2019/20 before rising to $61 billion by 2023/24.
Australian Associated Press