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Hi All,

Welcome to the second Progressive Agriculture Update. Same themes as last fortnight; please share with your friends and colleagues if you think they’ll like it.

Andrew Bomm

Well it’s as wet as a shag and prices are down. Temp prices last week of around $40 for Murrumbidgee and $50 for the Murray are where many (including me) thought we wouldn’t get to again with less entitlement in the system and increasing demand enabled by decoupled land and water. But you don’t need to water nuts in a flood and cotton plantings in the Murrumbidgee are going to be well down with a lot of inaccessible country. Cotton water hitting the market is a big part of the Murrumbidgee story. The Murray price is a little harder to understand, though even rice growers down there are talking about reducing their area because of impediments to preparation. This will be compounding the Murrumbidgee situation as well.
Last week’s zero allocation announcement in the Murrumbidgee will disappoint many. Again, the messages out of NSW DPI have been confusing. Last announcement focussed on stored water needing to be used to create airspace for additional inflows to be allocated. However, the reason given this fortnight was an obscure EWA account trigger only vaguely suggested at a fortnight ago. They really need to get better at communicating market sensitive information. It will be interesting to see if this low number has an upward effect on price to counter the lived experience of water all over the place. 

Anthony at AV Weather is predicting a wet October for NSW, albeit  with a bit of a break for the time being. He’s been on the mark previously – having called this wet winter and spring back in March. More wet conditions will have significant implications for winter crop production and access to country for summer crop planting. Even rice plantings may be down as a result of there being too much water around, though hopefully the next ten days will assist.  

What a shocker the BOM has had in assisting farm decision making. Six weeks ago they said September to November was an even money chance of being drier or wetter than usual. Surely Australian agriculture deserves better than infrequent wrong calls on impending scenarios others are getting right. Outlooks delivered just once a month? Please! You can tell how much closer to the mark AV has been by clicking on the BOM’s 25 August Sep-Nov outlook here:

After the SA power shambles last week, energy security was at the centre of a national debate and I’m little the wiser for it. Energy transmission is possibly one of the most complex technical processes to get your head around, and doesn’t exactly lend itself to a debate conducted in five second grabs over the airwaves. While SA’s increased reliance on renewable energy can’t necessarily be blamed for the SA blackout, a higher mix of fluctuating renewable energy does make electricity distribution more challenging, and does create greater vulnerability for energy security when things go wrong.

In SA, they’ve removed their domestic coal fired power source and rely on Victorian baseload power, which exacerbated this risk. Malcolm Turnbull made the mistake of raising these concerns too soon after the storm, a bit like talking about gun reform five minutes after a mass shooting, and was given both barrels for doing so (pardon the pun). SA’s power might have gone out regardless, but the warning he issued about the renewables fervour was right, even if poorly timed. Renewables are where we need to go, but the risk is that a headlong rush driven by ideology will be counterproductive in the end.

I’m pretty passionate about seeing highly professional decision making in agriculture. Nobody can pick the weather or prices, but if the decision making process is right, it’s more likely to be profitable. One way to do this is to adopt a company board approach to strategic decision-making. GRDC has put out some good information about farm advisory boards here.
Click here

Here is an interesting podcast of Richard Fidler’s conversation with Bruce Pascoe about how, despite common belief, Australian aborigines engaged in agricultural practices.

Well what else but a little Max Walker memory lane. RIP Max. Here’s Walker in one of the greatest commercials ever made:

And here’s some fantastic footage from early in Max’s media career:

The best punting is getting away with laying down your money on an outcome that’s already known. Impossible you say? Who would frame a market on an outcome that’s already played out? Well that’s what some agencies are doing by offering markets on reality TV shows. Nobody in television can keep a secret. In the market for Australian Survivor – reality drama where anything can supposedly happen until the end – in a field of ten candidates one contestant was set late last week at $1.40 favourite with Sportsbet. There is a good reason for this. Load up!

If you’re interested in what’s driving global commodity markets, get following Karen Braun on twitter via @kannbwx. She’s the Global Agriculture Columnist at Thomson Reuters and provides clear and easy to understand information on climate and supply drivers.

IREC is holding a wet weather strategy workshop at Murrumbidgee Irrigation on Thursday 13 October, from 10am. There’ll be advice from both the cotton and rice industries. See more details here:  
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