The Bureau of Meteorology's outlook for the August-October period is for the odds to favour below-average rain for NSW, particularly in August in southern regions. Temperatures are also likely to be warmer than normal, increasing soil moisture loss and reducing storage levels through evaporation.

“Producers are now faced with some very difficult decisions on whether to graze sown crops or rely on potential rainfall in the next two months in order to increase yield production," Mr Niall said.

“Some areas of the state did receive some welcome rainfall this month that has provided a little relief for stock and domestic water," he added. "Unfortunately, though, it will not even come close to the recovery needed for most farmers.

The first seven months of the year have been the hottest on record for NSW for daytime temperatures, while rainfall has been the least since 1965, the bureau said last week.

Its most recent drought report, also out this week, noted that parts of the northern inland and western slopes of NSW also had their lowest July rainfall on record.

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So far, Sydney has been spared a direct impact from the dry spell, although reservoir levels continue to decline towards the 60 per cent level that would trigger the start of supplementary water supplies being added from the city's desalination plant at Kurnell.

The city's total storage stood at just under two-thirds full as of Wednesday, down 0.7 per cent in the past week. Warragamba Dam, which accounts for about 80 per cent of Sydney's water storage fell below 70 per cent full just over a week ago, and is down about one-quarter in the past year, according to WaterNSW.

At this stage, there are no discussions about extending any water restriction for city residents, a spokesman for Sydney Water said.

In June, average daily water use in Sydney was about 324 litres per person, the highest since July 2007, when the city was emerging from the Millennium Drought.

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Bill Shorten, the federal opposition leader, will be visiting drought hit regions of Queensland on Thursday and Friday.

He plans to call for the Turnbull government to fast-track cash payments to struggling families so that they receive the full $12,000 on offer on September rather than have it spread of two payments six months apart.

"We support this package but it needs to be rolled out faster - farmers need immediate financial support," he said.