Water prices tumble, on back of good rain

Heavy rain, several weeks ago, has seen water prices drop

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CHEAP WATER: Katunga dairy farmer Paul Stammers has benefitted from the fall in water prices.

CHEAP WATER: Katunga dairy farmer Paul Stammers has benefitted from the fall in water prices.

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Good followup rain has eased the need for irrigation in the north.

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Recent rain has seen some temporary water prices halve in just over three months.

And brokers say the price of between $300 and $400/megalitre is likely to stay down for some time, despite low storage levels.

H20X Business Development Manager Craig Feuerherdt said the last time prices were that low was just over 12 months ago.

Northern irrigators say the latest falls, of up to around 25mm, have set them up for a good season.

Waaia dairy farmer Mark Bryant said he was putting in 150 hectares of annual ryegrass pastures.

"This is perfect rain for the croppers to spray, and start watering," Mr Bryant said.

"Anybody who has a bit of grass on is giving it one or two waterings, it gives a spectacular green tinge, across the country."

"Depending on what the weather does in the future we may not have to water again, which is nice."

He said his pastures would use between 100-120ml.

"If we get another rain, it will save me 200-250m/l," Mr Bryant said.

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Steve Snelson, Koyuga, said he'd heard many dairy farmers in the area were reassessing their irrigation programs, now the price of water had dropped.

He said recent rain would germinate shaftal clover seed, which had been sown in the area recently, while giving a boost to the lucerne.

"Some of our paddocks needed re-irrigation, but I'll put that off now, until mid-April, or Anzac Day," he said.

He'd put ewes and lambs, confined in a containment area after the last heavy rain, back out onto pasture.

"I didn't want them to get too wet, in the containment area," he said.

The recent rain would save a m/l per hectare, or around $6000 in water costs.

"There is a lot of water on the market, so I can't see anything but the price coming down."

Further falls?

Paul Stammers, who has a dairy farm at Katunga, said he'd sown ryegrass in late February and early March.

He predicted the water price might even fall further.

'"The season has had a lot to do with the fall in the price, but it's looking like a really good start," he said.

"The price of feed has dropped, and we've got more than enough water for the rest of the year."

He said the property had received more than 200mm of rain, since the January.

"Diesel is at its cheapest, the seed is going in like a dream, and bouncing out of the ground as soon as it hits the soil."

Wayne Shields, Pensinsula Fresh Organics, has properties at Barham, on the NSW side of the Murray River, and Baxter, on the Mornington Peninsula, where he grows vegetables.

"That's good, it can keep coming down," Mr Shields said.

"We are not out of the woods yet, it's early days, but it looks good and I sense a bit of confidence.

"The only way is up, that's how low everyone was."

He said low prices might make it possible to bring the Barham operation back into profit.

"We have changed our operations, we had no summer production, this year - we have restructred Barham to winter production only now, growing brassicas, leaks and lettuce."

Mr Shields said he was hoping a cool, wet winter, would keep it well watered, so he wouldn't have to use much water.

Waterpool's Peter Lawford said rain, a month ago, was the most significant driver, behind the drop in prices.

"Now we have follow up rain, it has certainly made a difference," Mr Lawford said.

"Trades have eased off, demand has eased, so that's going to affect the price."

Mr Feuerherdt said he had made recent trades of $275/ml, for Goulburn water, while Murray prices were up around $400/ml.

"There's been a halving of prices in the space of three months, based on a few showers of rain and a favourable outlook from the Bureau of Meteorology," Mr Feuerherdt said.

'Yet Victorian storages are lower than last season, which is interesting," Mr Feuerherdt said.

Dartmouth dam stood at 46.6 per cent capacity, while Hume was 12.83pc.

"Some irrigators may not need to water again, perhaps once more in a few areas."

Mr Feuerherdt said at some stage, people would see the value in the water market, and prices and demand would increase.

"I don't see prices rising significantly though," he said.

"If we don't see catchments starting to respond to rainfall by early June I think the corporate water users will come back into the market because they'll see value to carry it over.

"Winter rainfall 'in the paddock' is one thing, we need to see storages improve to ensure water availability next season - this is what will determine prices next season."

Looking ahead

Wilks Water's Tom Wilks, Wagga, said there was a general feeling the drought had broken, it was going to rain, dams would fill, and people would get allocations.

"The water authorities outlooks are not that buoyant, as things stand at the moment it's going to be a pretty ordinary start to the season," Mr Wilks said.

"If it does rain, it will be a different story, but we are a long way from a general security allocation (for NSW)."

He said recent falls had all soaked in.

"There won't be a lot of run-off to the catchments," he said.

"It's getting to the price where people will carry it over, rather than sell.

'I'm guessing its found a bottom, but I'm no judge."

He said most of his clients had been expressing a reluctance to sell water.

"But anything could happen, there's plenty of time before the new season, and this one is on a knife-edge.

'Add in coronavirus, and most people are not acting unless they have to."

Northern Victoria Resource Manager Dr Mark Bailey has also released the final 2019/20 seasonal determinations.

Seasonal determinations in the Murray system increase from 65 percent of high-reliability water shares (HRWS) to 66pc.

The Goulburn and Loddon systems increase from 78pc HRWS to 80pc HRWS.

Dr Bailey said there were some small resource improvements, due to mild weather conditions over the past fortnight.

"Flows into the major storages since the last update were higher than our estimates, and evaporation and river losses were lower with the mild temperatures.

"This enabled the increases in the Murray, Goulburn and Loddon systems.

"The small improvements in the Broken and Campaspe systems were not enough to change the seasonal determinations for those systems."

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