Private firms had been predicting that the Australian wheat harvest would be around 21 million tonnes because of the exceptional yields that were being seen in parts of NSW, but ABARE's latest forecast has changed that with the official expectation now just 19.9mt.

ABARE says a lack of spring rainfall across Victoria, South Australia and southern New South Wales has resulted in a marked deterioration in the major winter crops.

"Australian wheat production in 2008-09 is now forecast to be 19.9mt, some 11pc less than forecast in September," ABARE executive director Philip Glyde said.

"Despite the poor spring in some areas total wheat production is forecast to be around 7mt above last year’s drought affected harvest."

Rainfall in the critical September and October months was well below average in Victoria, resulting in widespread crop failures.

Wheat production in Victoria is now forecast to be 1.4 million tonnes in 2008-09, compared with ABARE’s September forecast of 2.7mt and last season’s harvest of 1.9mt.

While winter crop prospects have deteriorated in South Australia there is extreme variability in yield potential across the state.

Wheat production is forecast to be 2.3mt in 2008-09, 1.1mt below the September forecast and similar to last year's harvest.

The condition of winter crops in New South Wales varies considerably across the state.

Mr Glyde said the north of the state and most of the central west were expecting "average to above average yields", whereas crops in western areas and much of the south were in poor condition.

"As a result, New South Wales’ wheat production is forecast to be similar to the September figure of around 6.6mt, with the effect of poor conditions in the south being offset by better conditions in the north and central west."

Late frost across parts of the Western Australia grains belt may affect grain quality and has resulted in some crop losses.

Despite this setback, a forecast wheat crop of around 7.8mt is 1.7mt better than last year's outcome.