Hi all,
Welcome back to the Progressive Agriculture update.
Different year, same format, I hope you enjoy our information in 2019.
Cheers,
Andrew Bomm
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Prices update
Temp water prices continue their rise. Bidgee water is going for around $630-640 after peaking at $700 during the recent heatwave. Demand seems to be coming from high value tree crops and cotton growers who’ve been left short with allocation and/or hot weather, and whose cash flow prevented early acquisition. The connected systems elsewhere in the Southern Basin are around $500-$520 and also cooling. Murray Irrigation has announced a five per cent efficiency dividend for customers, which has relieved a little market pressure.
These temp prices don’t make a lot of sense for broadacre cropping requirements, but contract commitments are biting, especially in the Bidgee.
It’s worth noting that only three months in spring 2007 and September 2008 have exceeded these prices (credit: H2OX). There’s less entitlement in the system now, but with broadacre cropping demand minimal at these prices, only continued extreme dry will see them stay there in 19/20.
Carryover and forward water strategies
Broadacre irrigators are starting to consider whether they can justify either carrying over or entering the forward market to secure water for next season. Water next year should start high, especially with minimal carryover, but seasonal conditions will determine if it stays there. The hope of spring rainfall and spring allocation will keep many out of the market, and this may suppress forward water prices. Currently the best estimation of forward water prices is $650 in the Bidgee and $550-600 in the Murray. It’s hard to see the value in broadacre croppers carrying over water at current temp prices.
450GL upwater
I think a change of government and the politics of a system in drought will see the 450GL upwater program recover water from more on-farm irrigation efficiency programs. The key is the poorly defined socio-economic neutrality test, and how broadly it is interpreted. Labor is likely to call most proposals kosher, and if the states don’t get in board, Labor can threaten to align with the Greens to scrap the buyback cap instead.
Most voters water their garden during dry periods and expect the environment to be watered the same way. Our best chance is rain intervening in the next six months.
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Hope?
The BOM has put out its latest rainfall estimation and its looks better than previous editions, which to their credit have been ok on accuracy. They’ve backed off their El Nino outlook, but their video doesn’t provide a useful explanation as to why the three-month rainfall outlook is better.
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AV is proposing an emerging La Nina pattern, but will have increasing confidence in this prediction by March, given a lot of climate neutrality at present. He’s describing better rainfall prospects in 2019.
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Here come the independents
The Coalition is on the nose with wealthy metropolitan electorates and country areas afflicted by divisive or scandal-plagued representatives.
The Libs are fighting major battles in the leafy suburbs of Melbourne and Sydney, electorates that are pro-business and socially progressive. They don’t care if gay people marry and support stronger climate change policy. The Nats are in trouble because their conservative social views have lagged behind more socially progressive electorates, and they look like old school politicians constrained in what they can do by archaic party machines. Candidates better reflecting local sentiment will do very well this election, especially since traditional Coalition voters know the government is going down anyway.
Abbott has ignored the change in his electorate and is likely to go down to Zali Steggall In Warringah, while Ray Kingston should take Mallee after the Andrew “g’day mate” Broad kerfuffle. If Fiona Simson runs against Barnaby in New England he should be toast as well.
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Food as medicine
Doctors are increasingly prescribing food-based treatments for conditions such as diabetes, gut health issues, anxiety, depression, autism spectrum disorders and others. There is an increasing understanding of gut bacteria, mineral and micronutrient qualities in food, and their interaction with mental health issues. Maximising micronutrient and mineral content in food provides significant marketing opportunities for farmers able to produce accredited ‘prescribed’ foods, with verified nutritional qualities. Wouldn’t it be great if there were a working relationship between our sector and the medical profession to work out how to deliver these benefits?
The article below gets a little ambitious about the opportunities here, but is worth a read.
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Value on independents
I think the bookies have underestimated the chance of Coalition seats falling to right-leaning but progressive independents. Zali Steggall in Warringah ($2.15) and Ray Kingston in Mallee ($3.17) are good value.
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Rabo land price podcast
Rabobank continues to put out interesting podcasts. Here’s a good one on land price drivers.
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GRDC research update
The GRDC grains research update is in Wagga on 19 February.
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Get off social media
Twitter is bad at the moment and Facebook is worse. The fake news flying around is out of control, and is testing everyone’s sanity. Best to stay off it than fall to the temptation of trying to convince zealots of the facts.
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Rabo land price podcast
Here’s must watch retro gold that is part commercial country-rock music, part political campaign for Al Grassby. A crook, but also a man ahead of his time.
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