Charities are turning away more than 10,000 people seeking food parcels and free meals every month in NSW - nearly half the hungry mouths being children - because of depleted food stocks, a national report shows.

Foodbank, Australia's largest food relief charity, released its End Hunger report on Wednesday, which revealed demand for food rose 8 per cent in the past year. Eighty-five per cent of charities said they had insufficient food to meet requirements. Among people who obtained food assistance, three-quarters did not receive all they required and remained hungry.

Foodbank, which rescues blemished fruit and vegetables, food in damaged packaging and products from discontinued lines, supplied 556 charities across the state in the past year. Each month it helped charities serve 670,000 nutritious meals to 80,000 people in need.

Doing better: Cameron Morgan has relied on the Salvation Army's Surry Hills "supermarket" to fill his pantry and fridge.
Doing better: Cameron Morgan has relied on the Salvation Army's Surry Hills "supermarket" to fill his pantry and fridge. Photo: Ben Rushton

Chief executive of Foodbank NSW Gerry Andersen believes they can close the gap by building a larger warehouse which requires a one-off $2 million grant from the federal government.

''To end hunger in Australia, Foodbank has a national target to distribute 50 million kilograms of food in Australia by 2020. This year we sent 26 million kilograms,'' he said. ''It's an achievable target.''

He said more efficient supply chains made sourcing surplus food harder in recent years, forcing Foodbank to create new methods. Its new collaborative scheme to boost supplies of food with long shelf life such as pasta and rice requires farmers and other labourers to donate their time, and companies to donate equipment, packaging and transport.

The report, with results analysed by Deloitte Access Economics, revealed the types of people requiring food relief shifted from the homeless and those with mental health issues, to low-income and single-parent families.

''The situations for many people are quite dire. There's housing affordability issues, but for those on government income support like Newstart, there's just been no movement in that allowance for years and years,'' said the Salvation Army's social director, Major Paul Moulds. ''They are falling further behind.''

Melody Pascoe, a welfare worker at the Salvation Army, said a third of her clients now comprised single parents - shifted to the Newstart allowance under government changes - who could barely cover basic living costs. ''We give them vouchers they can spend at our supermarket here, so they don't have to worry about food costs and focus on the other bills,'' she said, referring to the charity's in-house mini supermarket in Surry Hills stocked with goods such as $1 cereal boxes and $1 soup mix bags supplied by Foodbank.

Cameron Morgan, 49, who lives in public housing in Waterloo, has relied on the Salvation Army's supermarket for five years to fill up his fridge and pantry, after surviving a period of crisis where he regularly sacrificed eating food.

Each week Mr Morgan, who has a disability, stocks up on cut-price bread, biscuits, peanut butter and diet soda that are covered by his monthly welfare payment. ''I'm doing much better now. The food is very good, it's wonderful."