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 Hi All,

Welcome to the first Progressive Agriculture Update. These will be short, concise updates delivered fortnightly and created to provide a mix of useful and entertaining information you won't get in one place anywhere else. Our target audience is progressive, entrepreneurial and innovative thinkers working in agriculture in the Riverina.
If you don't want to get it, just hit 'unsubscribe' at the bottom. If you'd like me to tweak things, or reckon I've missed the point, please tell me. If you like it, please forward it on to your contacts if you think they'll enjoy it.
Here we go. I hope you enjoy it. At the very least, check out the YouTube video in 'Retro Corner' for the best laugh you'll have today.

Andrew Bomm


Water Market Wrap

The Progressive Agriculture caravan rolled into Melbourne recently to sit on a panel discussing water at the launch of Aither’s 2015/16 water markets report and outlook into the 2016/17 season. Their report is well worth a read and can be found here:

Especially interesting was their outlook for southern Basin allocation prices in 2016/17:

“Based on average and wet allocation scenarios adopted from state authority outlooks and assuming median in-crop rainfall across the remainder of the 2016-17 year, our model estimates an annual average price of approximately $170 per ML under average conditions and $135 per ML under wet conditions. If rainfall for the remainder of the year is substantially higher than median, annual average prices for water allocations could be lower than $100 per ML in 206-17. A severe lack of rainfall for the remainder of the water year would need to be observed to lift annual average prices above $200 per ML for the 2016-17 water year.”

As for this season’s DPI allocations and markets currently, there are a few confusing signals around. Some dams are full but it doesn’t necessarily translate into allocation immediately. The allocation probabilities DPI released for the Murrumbidgee reflect dam airspace issues that need to see carryover water used before allocation can build to its maximum (DPI says we won't have more than 3 per cent extra by 1 November under any circumstances). The low temp water prices in the Bidgee either indicate that the market doesn’t see this as a major issue longer term or there will be a shock when allocations hit a speed bump over the next month or two.

There have also been some confusing signals about Murray GS allocations. The MDBA weekly report of 19 August made the following key observation:

“Even if Hume reservoir fills in coming weeks, the water in storage able to be allocated by NSW and Victoria will be constrained until significant further inflows are captured in Menindee Lakes and Dartmouth Reservoir.  However, in the coming weeks and months, any water demands which are met from tributary inflows downstream of Hume Dam will reduce the reliance on water held in storage and may thereby allow NSW and Victoria to further increase allocations.”

This indeed happened. The significant Barmah Millewa account borrow was triggered and paid in no time, with the last allocation effectively delivering 20 per cent to irrigators in a fortnight. Given contstrained Dartmouth inflows, this is much in excess of where many informed observers thought we might get. The dark art of determining the effect of tributary inflows on allocations remains elusive for market participants.

Prices in both valleys are pretty low and may be slight unders at present, but if it keeps raining buckets then the market will have got it right.



Current odds on which month the next interest rate movement will be in are:
September 2016              $11
October 2016                   $11
November 2016               $3
December 2016               $16
In or after 2017                $1.60
The talk from RBA is all cuts rather than rises. If $1.60 isn’t good value then the RBA have lost their minds. The danger of exacerbating the current housing bubble should prevent further cuts this year. And not to mention deposit holders going berserk. Or the incentives for high risk investment decisions. The irony: low interest rates are helping generate a real estate windfall for would be retirees, but their kids are still with them at home because real estate is too expensive and they have to keep working because the cash rate is delivering such low returns.

Yet will anyone support a policy designed to reduce the wealth tied up in an unproductive asset like the family home?

Farm business information

I’ve come across some pretty interesting stats from the Australian Export Grains Innovation Centre on the volume and value of Australian grain product to our major export markets. Have a look by clicking here.
Grain stats

Social Media Watch

Bulla Burra are a successful collaborative farming venture in the South Australian Mallee and they are pretty good at engaging on social media too.

Check out their Facebook page and get following. 
If you know of other good ones drop me a line and let me know.

Bulla Burra

Tractor Listening

For an interesting and easy to understand look at how finance and economics works, jump into ABC Radio Nationals’ ‘The Money’ podcasts by clicking the tab below. 

There’s an interesting podcast on the economics of dairy worth checking out, and I can highly recommend the instalment on how interest rates are set, which challenged what I thought I knew about this issue.




Can private forecasting serve agriculture well?

In our first weather segment, there’s no point telling you what the BOM thinks because we’ve all seen that.

However, if you’re on Facebook you may have seen a private weather forecaster called AV Weather delivering a social media and subscriber based service.

His focus is on delivering forecasts tailored for the farming community (the 2-4 week forecasts are pretty good), and not being afraid to have a stab further out than other services. Forecaster Anthony Violi has had a pretty good strike rate this year so it’s worth checking out his site and getting a taste via a trial:
AV Weather’s current Riverina forecast suggests more consistent falls for the next month.



On the punt

The US election result is all but decided and you can’t get enough on Hillary at $1.53 with sportsbet. Forget about her pneumonia. Today’s US demographics are against the Republicans winning anyhow, but throw their state-by-state winner takes all electoral system and Trump’s politics in the mix = nearly impossible for Trump.

Of the six largest states only Texas will go to him for certain, four are solid democrat and Florida is favouring Trump slightly after he was  $2.50 before the health issue. Ironic, given Florida's eldery demographic. The US bellweather state of Ohio is the next largest – the Republicans can’t win without it - and Hillary is $1.53 favourite. 

Expect her to shorten as the campaign moves on.


Retro corner

A treat for everyone here. This is without doubt the best sporting commentary you will ever see:

For the diary

20-22 September: Goin’ to the Henty field days:

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

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