Industry group, NSW Farmers, have set off alarm bells stating almost two thirds of food producers say they are going backwards financially.

According to a NSW Farmers report, a farmers business sentiment survey revealed 64 per cent of farmers reported business conditions had deteriorated over the past 12 months, while only 12 per cent stated they had improved.

"The main economic causes of these negative sentiments were commodity prices and interest rates," NSW Farmers economist, Brendan O'Keeffe said. “According to ABARES, wheat and canola export prices as of June 21 had decreased by 30 per cent and 37 per cent respectively over the past 12 months.”

Jack Farrer, CEO of Outlook Ag in Narrabri said canola growers were feeling pressure from many sides.

"There is concern among growers about the European Union's introduction of new restrictions," he said.

Mr Farrer is referring to the EU announcing it intends to reduce the maximum residue limit (MRL) for herbicide haloxyfop. This chemical is widely used by Australian growers as the most affordable post-emergent means of controlling grass weeds in canola crops.

Applying haloxyfop to canola according to current Australian label directions would create residues above the expected new EU MRL and impact exports - an issue that will affect farmers nationwide.

However, Mr Farrer said "Sentiment in our region is generally good."

Mr Farrer points to the local cotton yields and turn outs that were higher than average - "producers would be happy with the season" - but he cautions winter sown crops haven't had the moisture of previous seasons.

"We are experiencing super dry conditions at the moment," he said. "We have only had about 40 millimetres of rain since last December and most crops have been sown dry. That said, that's reasonably normal for our region. The general rule of thumb is two huge seasons out of seven with the rest being marginal or drought affected."

But, while the pressures remain at the farm gate, it’s the rise in end of the chain food costs that is provoking NSW Farmers to action.

“We’ve seen food prices at the retail level increased by 7.9 per cent in the 12 months to May, with price rises right across the board from bread to meat."

Mr Farrer said cattle producers are certainly taking a hit in the hip pocket of late. It is something he is aware of, even though Outlook Ag deal primarily with cropping.

NSW Farmers have the figures to back this up.

“We know the Eastern Young Cattle Indicator has almost halved in a period of less than year, from 1,092 c/kg cwt in September 2022 to 561 c/kg cwt as of late June,” Mr O’Keeffe said.

Mr O'Keeffe said that, if anything, food prices should be decreasing due to more consistent supply of fruit and vegetables since the floods in June-July last year.

“Farmers find themselves at a loss to explain the growing price gap between farmgate and retail, and it’s ordinary Australians who are copping it,” Mr O’Keeffe said.