Dairy farmer Dale Hanks said he would be at the auction and would look at buying another 100MG but only if the price was reasonable.
WITH nearly a third of South West irrigation farmers registered to buy water missing out at Harvey Water’s November auction, strong demand and prices are expected at a second auction to be held next month.
But many farmers are unhappy that it has taken so long for the extra allocation to be put up for auction.
Last week Harvey Water and the Water Corporation announced that an additional 2.2GL from Logue Brook Dam would be auctioned on February 8.
The decision was welcomed by Water Minister Bill Marmion, who said South West irrigation dams had received little inflow since the first auction of 5.3GL in November.
“It makes sense for the water to be available this summer rather than just leaving it sitting unused in Logue Brook,” Mr Marmion said.
With Harvey and Waroona irrigation farmers facing summer allocations of around 34 per cent of their full water entitlements, strong bidding at the November auction pushed prices to record levels, with some producers paying up to $300 a megalitre for water.
Harvey Water’s Geoff Calder said dairy farmers had been against the split auction but they were very happy now that more water was being made available.
“With closing prices for the last lots of water sold at the November auction as strong as the first, indicating there was still unmet demand from South West irrigators, we do expect demand and prices to be strong again this time,” Mr Calder said.
Just 57 of the 81 registered buyers were able to secure water at the November auction of 5.3GL, with many unhappy with then Water Minister Dr Graham Jacobs’ decision to hold back the remaining 2.2GL of the 7.5GL initially set aside for irrigation farmers.
“I think the smarter ones paid the money they needed to pay in November and this will be a mop-up for those who weren’t as bullish or aggressive (in bidding),” Mr Calder said.
“That is in the past now and at least that water is available now and we will move forward from here.”
Mr Calder said he did not expect numbers at the coming auction to be as high as the last one, which at around 100 was “a world record” for them.
Yarloop dairy farmer Tony Ferraro, who spent $54,000 buying 223 useable megalitres at the November auction, said he would not be attending next month’s auction.
“Had they put all the water up at the one time, the price wouldn’t have gone up so much and we could have all made decisions when they needed to be made,” Mr Ferraro said.
“February is just too late for us.
“What’s the good of me buying water now that I have dried the land out.
“There was no guarantee back in November that there would be any more water made available, so we had to make a decision on the day and we bought enough to keep us going.”
Around 21mm of rain early in January had “saved a few day’s watering” but was not a major gain.
West of Harvey, dairy farmer Dale Hanks said he would be at the auction and would look at buying another 100MG but only if the price was reasonable.
“Sixty eight dollars a share was ridiculous, if it is around about $40 a share, I will probably look at it,” Mr Hanks said.
“I have got other options in place as I have bought my own hay and I have silage coming in.
“Everyone will still go to the auction as even those who bought water before would have used most of it by now.”
Mr Hanks bought 100 shares or transferable water entitlements (TWE) at $68/share, which was around 34ML of water.
With the volume charge added on, this equated to about $230/ML.
“We irrigate with our centre pivot and we haven’t flood irrigated anything, basically we have gone straight into lotfeeding cows with heaps of hay and pasture,” Mr Hanks said.
“We are getting through the season and we are meeting our milk budget, but our input costs are so much higher and our milk price has not adjusted to reflect that.”
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