Australia's most populous state, New South Wales (NSW), is now entirely in drought, officials have confirmed, reports BBC.
A dry winter has intensified what has been called the worst drought in living memory in parts of eastern Australia.
NSW produces about a quarter of Australia's agricultural output. It was officially listed as "100% in drought" on Wednesday.
The state and federal governments have provided A$576m (£330m; $430m) in emergency relief funding.
Southern Australia has just experienced its second-driest autumn on record, according to the Bureau of Meteorology, with rainfall 57mm (2.24in) below average.
On Wednesday, officials said 23% of NSW was classified as being in "intense drought", with the remainder in drought or drought-affected.
But the problem is not confined to NSW - more than half of neighbouring Queensland is in drought. Parts of Victoria and South Australia are also experiencing dry conditions.
On Sunday, Prime Minister Malcolm Turnbull warned that the country had become a "land of drought".
Farmers have told harrowing stories of failing crops, severe water shortages and being unable to feed livestock.
Some people had spent up to A$10,000 per truckload of hay just to feed their animals, Turnbull said.
Stock agent Simon Bourke told the ABC: "We're selling livestock we don't want to sell… down the track there's really not going to be too many cattle or sheep left."
Suicide rates in rural regions are on average about 40% higher than in urban areas, mental health group Sane Australia has said.
Farmers are already eligible for annual relief payments of up to A$16,000 each. Earlier this week, Turnbull announced additional payments of up to A$12,000.
The prime minister said that although drought was considered "part of the Australian climate", farmers needed help.
"What we have to is make sure we [the government] back them in when the times get as tough as they are now," he told the Australian Broadcasting Corporation earlier this week.
Earlier this year, meteorologists rated Australia as having a 50% chance of experiencing an El Nino in its spring beginning in September.