CANBERRA, Aug. 8 (Xinhua) -- Demand for wheat and grain to feed livestock is approaching unprecedented levels in Australia as the nation suffers through its worst drought in decades.

Frank McRae, chairman of the Australian Fodder Industry Association (AFIA), on Wednesday warned that farmers across New South Wales (NSW) and in parts of Queensland, South Australia (SA) and Victoria were in "survival mode."

The NSW government announced on Wednesday that 100 percent of the state was in drought with a quarter considered to be in "intense drought."

McRae said that demand for fodder in the state hadn't been so high in decades.

"There's pretty much virtually nothing in NSW and supplies are rapidly drying up in southern Victoria," McRae told the Australian Broadcasting Corporation (ABC) on Wednesday.

"You have to go back to 1981-1982 to see a drought this widespread and so severe.

"We're in survival mode at the moment."

The drought has resulted in fodder being shipped from Western Australia to NSW and Queensland on the east coast for the first time.

Garry Hansen, director of Grain Producers SA, said that fodder farmers who exported their product were instead selling domestically because Australian farmers were willing to pay top dollar to save their livelihood.

"The domestic market will be prepared to, and is proving now, it is prepared to pay enough to stop it going on the export markets," he told the ABC.

Prime Minister Malcolm Turnbull announced an urgent 190 million Australian dollar (141 million U.S. dollar) drought relief package for farmers on Sunday.

Under the package, each farming household will receive a lump-sum payment of up to 12,000 Australian dollars (8,912 USD) on Sept. 1.

It will also fund extra mental health support for struggling farmers.

"It is a shocking drought," Turnbull said at the time.

"It appears that we are going into a dry spring and a tough summer.

"We hope the forecasts are proved wrong, but the prospects are not great at the moment."