Australian crop forecasts may be due for another downgrade after fears of locust outbreaks added to farmer's increasing concerns of another dry spring.

Both Victoria, which suffered a locust plague three year ago, and New South Wales warned of the threat of insects to crops and pastures.

"It is expected that there will be a significant hatching of locusts over a large area," Victoria's Department of Primary Industries said.

The hatching area - 1.25m hectares - is about 50 times larger than that in which eggs were found in the run-up to the 2005-06 plague.

New South Wales, which has typically accounted for nearly one-third of Australian wheat production, added that a drought effecting more than 70% of the state confronting many farmers with the "dire prospect of a total crop failure".

"Already some [farmers] have experienced significant crop losses," Ian Macdonald, New South Wales's Minister for Primary Industries said.

"Pretty much the whole state other than the north and parts of the south coast regions is crying out for spring rain."

New South Wales reduced to 10.8%, from 15.3%, the proportion of the state it believes had experienced "satisfactory" conditions.

The Australian Bureau of Agricultural and Resource Economics last week cut by 11.7% to 9.2m its forecast for New South Wales' winter crop production in the year to September next year.