In a revised outlook from the Department of Agriculture, production in the sector is forecast to hit $81 billion in 2021–22, beating last year's record by over $12 billion.
The ABARES outlook shows record results for cropping, with the highest ever volumes of wheat, barley and canola produced, while cotton has also delivered its second highest yearly output.
Jared Greenville, Executive Director of ABARES said the revision comes off the back of better than expected winter crop results, with higher yields in Western Australia driving up profits.
"This is an unprecedented result, and it can be put down to a combination of record high crop production, and the highest prices in real terms for Australian agricultural produce in 32 years," he told AAP.
The Australian Crop Report, also released on Tuesday, showed the national winter crop production is estimated to reach a record 61.9 million tonnes.
The effects of a wet spring and summer have meant that a lot of the grain in NSW was downgraded due to weather damage, despite that NSW had near-record levels of production.
Summer crops are forecast to be the fourth highest on record, with production expected to rise by 64 per cent in 2021–22 to 5.3 million tonnes.
Trevor Whittington, Chief Executive of Western Australian Farmers told AAP it's been an "extraordinary year" for farmers in the west of the country.
"Some farmers say it's a one in 50 year event ...which no one ever predicted," Mr Whittington said.
"There's extraordinary confidence across the industry," he told AAP.
High milk and meat prices have benefited the dairy and cattle industry, while the wine sector has felt the pinch from international trade disruptions.
The gross value of wine grape production is expected to fall by 28 per cent for the 2021 to 2022 financial year, that's expected to fall a further seven per cent next year.
"We're expecting that the wine sector will feel the pain of the loss of access to the Chinese market for some time," Dr Greenville told AAP.
Dr Greenville said exports are forecast to continue their strong run, with a 32 per cent increase on the previous year expected to net around $65 billion for the year.
But records may have peaked for now, with agricultural production anticipated to fall next year with the high costs of fuel, fertiliser and labour having an impact.
"We cannot expect such good conditions to continue indefinitely," Dr Greenville said.
"We are expecting the gross value of agricultural production to fall by around six per cent to $76 billion next financial year, which is still the second highest on record."
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