Australia’s farm production is tipped to hit $65 billion on the back of a bumper harvest while exports are expected to fall amid ongoing trade tensions with China.

The federal government’s agriculture forecaster ABARES on Monday released its latest commodities report which predicts a seven per cent increase in 2020/21 production.

“Overall, Australian agricultural production is bouncing back from the drought,” ABARES executive director Steve Hatfield-Dodds said.

Exports are forecast to fall seven per cent to $44.7 billion because of residual effects from dry years and trade uncertainties.

Australian barley and wine have copped the brunt of China’s trade action.

The anti-dumping measures are likely to reduce wine production value and sales with a lack of access to the key Chinese market.

Fruit and vegetable prices are expected to rise in domestic markets due to coronavirus travel restrictions limiting labour available for harvesting.

Prices of summer vegetables, stone fruit, apples, pears and table grapes are forecast to rise by between 15 per cent and 25 per cent.

Agriculture Minister David Littleproud said trade tensions and labour shortages would present challenges to the sector.

“I am particularly concerned at the potential impacts of China’s decisions to impose anti-dumping and countervailing duties on barley and the recent impost of provisional anti-dumping duties on Australian wine,” he said.

Dr Hatfield-Dodds said ebbs and flows in farm production were expected given Australia’s variable environment.

“We’re expecting a near all-time high winter crop, the best ever in New South Wales, and a more favourable outlook for summer cropping than we have seen in recent years,” he said.

“Livestock prices have also stayed high with herd and flock rebuilding, and continued international demand.”