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Water in Focus

Last week we hosted our Water in Focus events to provide an update on water management on a national, state and local level, and the implications for dairy farmers in our region. Here's a wrap up of the key messages and resources from each of our speakers:

The Murray Darling Basin Plan

  • The Basin Plan is on track to deliver its environmental outcomes on time and in full without the need for further water recovery before 2024 – and maybe not even after then.
  • However, the political context remains fraught with a high risk that the goalposts may be moved again. Community, industry and company groups are mobilising.
  • In the short term, water market transparency, lowering conveyance losses and addressing over-extraction in the northern Basin are positive ways to address Basin Plan problems

Water market trends

  • Despite speculation, the majority of water in the region remains tied to land. However since 2015, the proportion of privately held entitlement not tied to land has increased to 12% (298GL). Last year, the majority of water held by investors went back into productive use.
  • Water use in the GMID has fluctuated significantly over the last ten years in response to seasonal conditions and water availability. 1,318GL was used in GMW districts in 2017-18, 21% less than the volume used in 2004-05.
    429 GL was used by LMW diverters in 2017-18. LMW diverters’ use has increased steadily since the Millennium Drought and is now more double the volume used in 2004-05.
  • Irrigators in the GMID and LMW diverters continue to use more than the volume of entitlement tied to their land and are reliant on the water market and carryover to help meet their water needs.
  • Water allocation prices generally reflect water availability in the connected southern Murray-Darling Basin, and water availability in NSW has been seen to have a very strong influence on market prices in recent years.
  • Given that the majority of allocation being bought and sold is by active users, trends in price reflect the market fundamentals of demand and supply.
  • The reduction of the size of the consumptive pool and the increase in water use for horticulture in the Sunraysia will influence future water share and allocation prices.

Find out more from DELWP's Water market trends factsheets. Click to download: 

  1. Ownership of water entitlements
  2. Water use in northern Victoria
  3. Allocation prices, supply and demand
  4. How are irrigators sourcing water?
  5. Carryover and who is holding it

Seasonal update 

  • Having experienced low rainfall and low inflows this season, water reserves are low, meaning that there is limited water available for early seasonal determinations. However with average inflows, allocation against HRWS should reach 100% in all northern Victorian systems by February 2020. The BOM's climate outlook has no tendency towards either a drier or wetter season at this stage.
  • The current Water Outlook for 2019/20 (released 1 April) is available from the Northern Victoria Resource Manager website. An update will be released 15 May.
  • Carryover will be deliverable this year in the Murray, Goulburn, Campaspe and Loddon systems.
  • The NSW Murray and Lower Darling Outlook (15 April) is available here.

Strategies for managing water volatility

Operating in an interconnected water system, industries respond in different ways to water availability and price. Water use has changed as the agricultural landscape changes and will continue to do so under different climate scenarios.

Most businesses use a combination of water procurement strategies, alongside feed production and procurement strategies:

Improving irrigation efficiency

  • Dairy farmers are becoming more efficient with their water as they restructure the feedbase to include dryland and irrigation crops, summer-active forages and annuals.
  • Tools available to optimise water use through irrigation scheduling include Agriculture Victoria's Weekly Irrigation Requirements summary (based on evapotranspiration) and soil moisture monitoring equipment.

For further information, download the presentations from our Water in Focus events here.

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