No relief for irrigators

Hot, dry conditions likely to continue to affect water prices


Water
DRYING STORAGES: Earlier this week, Goulburn-Murray Water released the latest water storage figures, showing dam levels continue to drop, following poor spring and summer rainfall.

DRYING STORAGES: Earlier this week, Goulburn-Murray Water released the latest water storage figures, showing dam levels continue to drop, following poor spring and summer rainfall.

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Limited supply driving water prices up

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Prices for temporary irrigation water are likely to continue to hover around $400 a megalitre for the next few months, according to water brokers.

Bendigo based water broker H20X said limited supply continued to be the primary driver, rather than hotter temperatures.

Business Development manager Craig Feuerherdt said the price had climbed again to $420/ML. This week, the Murrumbidgee saw prices as high as $600/ML.

SEASONAL DETERMINATIONS: Andrew Shields, Northern Victorian Resource Manager, said below average rainfall was more likely during January to March.

SEASONAL DETERMINATIONS: Andrew Shields, Northern Victorian Resource Manager, said below average rainfall was more likely during January to March.

“I think a lot of it is the view that it's going to be dry and there’s going to be a lack of water, which means there are fewer sellers in the market and people have to fight over smaller volumes,” Mr Feuerherdt said.

It was unlikely prices would drop, in the near term. 

“It doesn’t look that way, and with the climate outlook drier and warmer than average, that’s what’s driving everybody’s mentality,” he said.

And Marsden Jacob principal Simo Tervonen predicted an “ugly” upcoming season, price-wise, without rain.

“If there’s no rain, the only way is up, unfortunately,” Mr Tervonen said.

“A lot can still happen this year, but, without above average inflows, there’s every chance that next season will get really ugly, price-wise,” he said.

The latest Goulburn-Murray Water seasonal determinations saw high reliability water share allocations unchanged. The Murray and Campaspe systems remained at 100 per cent HRWS, while the Goulburn and Loddon systems stand at 94 per cent HRWS.

The Northern Victoria Resource Manager Andrew Shields said there had been no improvement to water availability, to enable seasonal determinations to increase.

“Conditions have been particularly hot and dry since the last assessment. Evaporation and flows into the major storages were close to our conservative estimates,” Mr Shields said.

Mr Shields noted the climate outlooks for rainfall favoured slightly drier conditions.

“The latest Bureau of Meteorology seasonal outlook indicates below average rainfall is more likely during the January to March period,” he said.

Tongala sheep producer Steve Snelson said he was likely to put off buying water until mid-February to early March.

“It’s too dear, I will definitely buy it went the price comes down, but the price would be a lot cheaper if we could use what’s in storage,” Mr Snelson said.

“Water really has to come down, and I can’t see how it's going to.”

He said the continued high price of water could see him halving the amount of his property; he could put under clover and sub-clover pastures.

“It's abominable to think we are paying this much for water when there is so much held by the government – farmers do a far better job of managing water than the government does, as evidenced by the Darling River fish kill.”

Dairy farmer Scott Somerville, Timmering, said was hoping the price would drop, so he could buy some more water to keep his sorghum crop going.

‘Its ridiculous and unaffordable, but everyone else is in a similar boat, with grain and hay prices,” Mr Somerville said.

“It’s frustrating water is at this price, when we have 100pc allocation.”

He said it appeared there was a lot of water for sale, but not much was being purchased.

‘There are people who want water, but they are not spending that money, they are hanging on to see what happens.

“If it doesn’t come back in price, I’ll consider the option of not watering at all, and I’m praying for a big autumn break.”

Fellow dairy farmer, Steve Hawken, Echuca, said it was impossible for most farmers to buy water, at the price at which it was currently sitting.

He said there was water in the dams, but lack of foresight meant a “man-made drought,” which was going to hit Australia hard.

“We are flooding the forests in the middle of a drought,” Mr Hawken said.

‘Who is the bright spark who would flood the forest in the middle of a drought?”

He said he had bore water but was still finding it tough going.

“Make no mistake, a lot of people are doing it a lot harder.

“Farmers are committed to an industry that didn’t support them and a government that doesn’t support Australian clean, green food.”

Mr Hawken said he was watering perennial pastures.

‘But a lot of guys are trying to irrigate crops, and they haven’t got quite enough money to buy enough water to grow maximum fodder.

‘These paddocks need to be watered at the correct stage to maximise dry matter growth, or you have a green paddock with nothing in it.”

KeyWater’s Anthony McCloskey said it appeared most irrigators were buying water to top up summer crops.

“People are only buying water to satisfy crop demand for what they have in the ground,” Mr McCloskey said.

“They are not outlaying a lot of capital on water, for next year.

"Now the supply is dwindling; it will be very interesting to see what sort of forecasts we get from the authorities for the coming season,” he said.

The first 2019/20 seasonal determinations come out in about a month.

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