Australia’s climate is already hotter and drier than it was a century ago. Bureau and CSIRO data show Australia has warmed ~1.51°C since 1910, with winter rainfall down about 20% in south‑west WA and 12% in south‑east Australia. The effect on farm businesses has been dramatic: ABARES modelling finds that seasonal changes since 2000 have cut annual farm profits by roughly 23% on average. At the same time, the chance of very low returns has doubled (from 1-in-10 years to more than 1-in-5), meaning that droughts or heatwaves now much more often wipe out a farm’s income.
Out of that trend have come more frequent and intense extremes. Recent droughts have been severe, especially in eastern Australia: for example, the 2018-19 drought crushed many broadacre farms. In NSW alone, broadacre profits plunged sharply that year, even as WA farmers got a reprieve from commodity prices. Conversely, episodic flooding is also on the rise. CSIRO notes that heavy rain events and storm intensity are increasing in many regions (even as average seasonal rain falls). In practical terms, this means Australian farmers must contend with both prolonged dry spells and sudden floods often back‑to‑back, which can erode soils, drown crops or trigger erosion and fire risk.
Impacts across industries
Climate shifts affect industries differently.
Grain and broadacre cropping is highly exposed to rainfall and heat swings. ABARES analysis shows cropping farms have the highest climate risk of any major farm type. When conditions turned dry, cropping profits collapsed: for example, ABARES’ farmpredict model indicates average profits on a typical cropping farm fell about 35% under post‑2000s climate conditions, whereas beef cattle farms saw only ~5% decline. In practice, this has meant repeated crop failures in parts of Queensland, NSW and Victoria.
Growers are adapting by experimenting with more resilient varieties, even looking overseas for seeds. The Grains Research and Development Corporation reports it is scouring Africa and the Middle East for heat‑ and drought‑tolerant grain varieties to bring home. This “climate‑proofing” of crops (and farming practices) aims to squeeze every kilogram from scarce rainfall.
Beef and sheep farming have fared slightly better to date. Extensive livestock systems rely on grass and pasture, which can endure moderate declines in rain if managed. Hence, ABARES finds average profit drops of only a few per cent in beef farming under recent hotter/drier trends.
That said, heat stress still affects animal health (calves may grow more slowly in heatwaves, lambs need shade, etc.), and pasture growth can suffer. Many graziers now adjust stocking rates dynamically or feed-purchase in droughts to buffer income.
Horticulture and fruit production face their own pressures. Heatwaves can scorch orchards and vineyards, and intense storms or hail can wipe out a season’s work. Floods or frosts can also be catastrophic. To reduce risk, many growers are turning to protected cropping greenhouses, tunnels or even indoor vertical farms.
Researchers note that indoor “controlled‑environment agriculture” allows farmers to fix the climate on-farm (you can predict the temperature and humidity inside regardless of storms outside). Over time, such systems could smooth out the supply of vegetables and fruits that were once vulnerable to seasonal shocks.
Adaptation on the ground
Faced with risk, many farmers are changing how they farm. Regenerative land management, focusing on soil health and biodiversity, is growing. Key practices include keeping living cover on fields (cover crops), minimal or no-till planting, and adaptive grazing rotations. Healthy soil acts like a sponge: it stores more water and carbon, and holds together during heavy rain, reducing erosion. For instance, some ranchers rotate large herds of cattle through paddocks (instead of continuous grazing), giving the land rest between grazings.
By keeping soil covered and feeding it organic matter (manure, mulch), farmers improve moisture retention through dry spells. Farmers involved in Australia’s regenerative movement say these steps can cut erosion in droughts and make paddocks more resilient.
Technology is another key adaptation. Precision agriculture tools, such as drones, satellite imagery, soil probes and GPS‑controlled equipment, let farmers use inputs more efficiently. A good example is irrigation automation. Centre‑pivot sprinklers and other systems can now be guided by soil‑moisture sensors and forecasts to water only when and where needed.
Energy adaptation is also advancing. Many farmers are installing renewable energy on-site to power pumps, sheds and vehicles. For example, a cotton irrigator in western Queensland installed about 0.5 MW of solar panels to run pumps, which he says cuts diesel bills by ~$60,000 a year.
Small wind turbines or biodigesters (methane from manure) are another option in some regions. Perhaps most innovatively, Australian researchers are trialling floating solar panels on irrigation dams. Such panels sit on the water’s surface, shading the dam to cut evaporation and generating power. This could dramatically increase on‑farm water availability and reduce carbon emissions. Combining solar with water storage tackles Australia’s “trilemma” of water, food and clean energy simultaneously.
Financial risk tools
On the financial side, farmers are using various risk‑management tools. In Australia, traditional crop insurance australia usually covers isolated events (like hail or fire) but not the full suite of perils (drought, flood, heat). Reports note that multiple‑peril crop insurance (MPCI), which bundles drought, flood, wind, etc., into one policy, “is not currently available in Australia” without significant support.
As a result, farmers often rely on other levers: Farm management, deposit accounts, disaster grants and sometimes short‑term loans. However, specialist products are emerging. For example, weather-indexed insurance (paying out based on rain or temperature indices) is available for some crops.
Food security and rural economies
Climate risks on farms ripple out to the nation. Australian farmers produced a record ~$90 billion of food and fibre in 2023, supporting high food security. But even so, severe weather is an “increasing threat” to that security.
Lower crop yields or livestock losses can mean higher supermarket prices or shortages of particular fruits/vegetables. On the flipside, Australia’s food system needs to be resilient because climate change elsewhere can also destabilise global supply.
In regional communities, the stakes are also high. Many rural towns depend on agriculture for jobs, services and investment. Prolonged declines in farm income as projected under unchecked warming would strain these economies. ABARES projections suggest that by 2050, typical farm profits could fall another 10-30% on average under a moderate emissions scenario (and much more in hot, dry parts of the Murray‑Darling Basin or Wheatbelt). The IPCC explicitly flags “disruption and decline in agricultural production and increased stress in rural communities” as a key risk in a hotter, drier Australia.
In short, farmer resilience = community resilience. That is why many groups emphasise adaptation: by investing in soil, water and new technologies now, the sector can sustain productivity, keep costs down, and protect the regional jobs that all Australians rely on.
