Australian farmers have been warned to prepare for the latest plague against their domestic economy: locusts.

A vehicle passes through a swarm of locusts on a highway between Dubbo and Gilgandra northwest of Sydney, Australia. (Will Burgess/Reuters)

Several months of rain in the country's normally dry interior has created ideal egg-laying conditions for the grasshopper-like insects. As a result, Australians are bracing for what could be the worst locust outbreak in more than two decades.

The last time Australia was beset this badly was 2004, when the voracious insects ate through more than $1 billion worth of valuable agricultural crops.

"The current situation has the potential to lead to an outbreak matching or exceeding the 2004-05 season," the state government warned recently.

Officials warn that as much as 35 per cent of the country's cereal crop is in jeopardy. Australia, the fourth-largest wheat exporter in the world, produces more than 20 million metric tonnes of wheat annually.

Locusts were also a problem in 1974-75 "and prior to that, the last outbreak of this scale was in 1934," Victoria state Premier John Brumby said Friday.

"We could be facing a once-in-a-lifetime locust plague with locusts swarming right across the state," he said.

Government officials have pledged $38 million to reimburse farmers 100 per cent of the costs they expend to fight the insects — swarms of which have already been spotted in excess of three kilometres wide across the country. Dense swarms can have as many as 50 insects per square metre.

One silver lining for Australian farmers is that since it is late in the growing season, most crops are set to be harvested — meaning they're more mature than the green shoots locusts prefer to devour.

The insects are already wreaking havoc on golf courses and with drivers, as locusts can cause serious damage when they are sucked into engines en masse. Some regional airports have cancelled flights as a precaution.