"This is very disappointing and the likelihood of upper-Murray inflows being above average for the remainder of winter and spring is very low," said Wendy Craik, chief executive of the Murray-Darling Basin Commission.
"Until there is significant rain and run-off, the prospects for irrigation and the environment in 2008/09 remain grim."
After good early rains this year, which eased Australia's worst drought in 100 years, dry weather has set in again in the past three months, plunging more rural areas back into drought.
The Murray-Darling river basin, an area the size of France and Germany, produces 41 percent of Australia's agriculture and provides A$21 billion ($20 billion) worth of farm exports to Asia and the Middle East, including rice, corn, grapes and dairy.
Water from the basin is mainly used for irrigated crops, including rice, grapes and horticulture.
Wheat is also grown widely throughout areas surrounding the Murray-Darling basin, but the wheat crop depends mostly on rainfall rather than irrigation. Recent rains have fallen directly on the wheat fields but they have not been enough to replenish the vast irrigation system of the basin.
Australia is headed toward producing a big wheat crop this year, with forecasts focusing on a harvest of around 23 million tonnes. This would be well up from drought-devastated crops of 10 million tonnes to 13 million tonnes in the last two years.
Good wheat crops are possible during a drought because wheat can be planted and grown if enough rain falls at the right time.
Authorities deem drought to persist until sufficient rain has fallen to fill dams and return farmlands to long-term viability.
After seven years of Australia's worst drought in 100 years, it could require years of good rainfall before the drought is over, meteorologists and authorities say.