In 2016-17, the gross value of Australian farm production is set to rise by 6% to around $60 billion - 16% higher than the average of $52 billion over the previous five years.
The positive outlook resulted from significant winter rains across all states boosting Australia's crop production.
In its latest Agricultural commodities the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecasts that gross value of crop production could increase by 15% to almost $32 billion in 2016-17.
Most of Australia's agricultural produce is destined for overseas markets - ABARES estimates that in recent years the share of exports averaged around 66%.
Earnings from farming exports are forecast to rise by 6.7% to $47 billion in 2016-17, with the best performers comprising chickpeas (up 74%), cotton (up 56%), canola (up 33%), wheat (up 25%) and sugar (up 23%).
With some commodities, global conditions are actually not very favourable for Australia, including for wheat, Australia's second largest agricultural commodity after beef and veal- wheat.
World-wide production of wheat is set to outpace consumption, and as a result global prices are assumed to fall by around 14%. But with production forecast to increase by more than a third to a record 32.6 million tonnes in 2016-17, export volumes could increase by 42% to 22 million tonnes in 2016-17.
If this eventuates, it would mean the second highest export volume of wheat on record, more than offsetting the estimated downward pressures on on global prices.
In other areas, farmers will benefit from rising prices, notably sugar (up 20%) and cotton (11%).
However, the report's outlook for the farming sector is not all positive, with exports of livestock set to decline. This includes our largest agricultural export commodity, beef and veal, for which earnings from exports are forecast to fall by 17%, from $8.3 billion in 2015-16 to $6.9 billion in 2016-17.
But the report notes uncertainties around the global economic outlook and the performance of our major trading partners.
World economic growth has been in decline since 2011, when it was at more than 5%. It is now down to around 2.9%, and while ABARES assumes a slight bounce back to 3.3% 2017, there are significant risks.
These include uncertainties associated with the new US government.
Also, as China's economy is still transitioning towards a greater reliance on services and consumption, its expansion continues to slow despite a range of stimulus measures put in place in 2014.
This may also affect the generally positive outlook for South-East Asian economies, which are set to grow at around 5% in 2017, while India's expansion is assumed to continue a steady pace at around 7.7%.
More information: www.agriculture.gov.au