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Hi all,

Hope you have a good Christmas and New Year. See you back here in 2019.

Andrew Bomm
Prices
Recent good falls have taken the heat out of the temporary market somewhat, though with little GS allocation upside the fundamentals remain the same. H2OX are reporting prices between $400-430 across the southern connected system.
 
Upwater socio-economic criteria
Basin state ministers and the Commonwealth have presented a ‘compromise’ to meet the legislated 450GL upwater component of the Basin Plan. A united political compromise is important for implementing the Plan but the terms on which upwater can be recovered to meet the target appear unworkable. The criteria are so unwieldy and at times contradictory that any recovery program will turn into a shitfight about whether projects meet socio-economic criteria that can’t be practically measured. Will an on-farm efficiency upgrade in a less competitive area like the GMID affect that region for better of worse? It depends on whether the proponent ends up using more water in the long run, and where that comes from. How will it affect water prices? Even harder to assess. The politics look ok for the time being, but the can has just been kicked a little further down the road.
 
Vic Murray water
There is a lot of discussion this year about the reliability of Vic HR entitlement relative to NSW Murray GS, and concerns that NSW are being short-changed under longstanding water sharing arrangements between NSW, Vic and SA. For balance, it’s worth remembering that in most years water from Victorian accounts spills into the NSW side of Murray storages. While Victoria’s reliability is enviable in a year like this one, over time the benefits of the more flexible allocation and carryover system of NSW sits in contrast to the costs of a more rigid Victorian allocation system. 

Here’s a summary of Vic Murray water ownership and movements, current at 4 December. Courtesy of the Waterpool update.
 
It’s been hot
According to Laurie Lewin the Riverina has had one of the hottest starts to the summer cropping season on record, just below 2010. A very hot October has been a major factor, which could have limited benefit for crops.
 

Contrast between Labor and the Coalition
Which party has a coherent tax policy? A coherent climate change policy? Has had a consistent policy platform on most issues for the past 3-4 years? Is more in tune with contemporary community sentiments?

On the other hand, which is focussed on irrelevant social issues? Has a few dinosaurs trashing their government if they don’t get what they want? Have no idea what they stand for, leading to policy paralysis?

Hard times for those of us reluctant to see a trade union official in charge.
 

Weather insurance is developing
I know I keep banging on about this, but good developments are happening in the weather insurance market. With increasing climatic volatility, and more farm business arrangements that require income stability, these products are going to be more critical.

In the last couple of weeks I’ve met with a couple of providers to discuss water allocation-related products, which would allow irrigators and entitlement owners to hedge their risk of very dry or very wet weather in the catchment. Allocation risk is impossible for anyone to price, but there should be a basket of rainfall metrics that can be used as a representative substitute for this risk. More to come…

Proper cricket is back!
There have been some wild price swings for in-play test cricket betting during this gripping series. The Betfair platform provides the best opportunity for arbitrage, though the Australian laws are super restrictive on in-play gambling, making it a pain in the backside to execute. 

One of Australian ag’s best
Agtech guru Sarah Nolet tells it how it is about the agtech hype. She’s got a beaut podcast out with some interesting people. Check out her latest here.
 
Listen Here

Tamworth Country Music Festival
Starts 18 January. Great summer holiday option if the farm is a little quieter this year.  

Rachel McKenzie
Growcom CEO Rachel McKenzie runs a pretty interesting Twitter feed. Check it out here

Follow It Here

India in Australia retro style
Some great footage from the 1991/92 Australian summer against India. It’s an lbw-fest. Keep an eye on Mark Waugh being waaay too casual at second slip in his lbw appeals. You’ve gotta make a good case at 2nd Junior!

Watch Here
Follow @progressiveagri on Twitter
Our mailing address is:
andrew@progressiveagriculture.com.au

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Progressive Agriculture · 13/120 Fitzmaurice Street · Wagga Wagga, NSW 2650 · Australia

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