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Fodder industry questions where water will come from in Government's announcement

Cassandra Hough and Jodie Gunders, Saturday November 9, 2019 - 14:34 EDT
ABC licensed image
Water will be freed up in the River Murray to help produce more fodder for livestock. - ABC licensed

The Federal Government's plan to put 100 gigalitres towards animal feed has raised more questions than answers for the fodder industry.



The Government has struck a deal worth almost $100 million with the South Australian Government to increase production from its desalination plant to service Adelaide.

This would leave 100 gigalitres in Southern Basin water storages to grow fodder upstream.

Forty gigalitres of desalinated water would be provided this financial year and a further 60GL would be produced the next financial year following a review.

In turn, the Government estimates 6,000 farmers will have access to 25 megalitres each, which must be used to grow feed for livestock.

The water will be offered to irrigators for $100 per megalitre and will be delivered by the end of April.

Minister for Water Resources David Littleproud said he expected the deal, which does not affect the Murray-Darling Basin Plan, could produce 120,000 tonnes of animal feed.

The Australian Fodder Industry Association chief executive officer, John McKew, said it was difficult to estimate the impact this additional water would have because there were many variables.

"It depends on when the water is going to become available, how they anticipate allocating that water to irrigators, and then of course what sort of crops you can grow with that water," Mr McKew said.

The other issue raised by the fodder industry was what impact the additional supply would have on prices.

"We're just into the 2019/20 fodder harvest and while there's been a reasonable amount of hay and silage made, there are still a lot of crops still standing in parts of the country that haven't been cut yet," Mr McKew said.



"And we're already starting to see some impact of the current harvest on supply and on prices. We're starting to see a little bit of softening of prices around certain areas of the country as the new harvest becomes more and more available into the supply pipeline.

"Extra supply like this, depending on the nature of the crops, can certainly have an impact on the supply, demand, and price equation."



"Those who are directly and very adversely impacted by lack of fodder supply, ongoing drought, and that necessity to maintain their herds and flocks will see this as a very good thing, of course," Mr McKew said.

"But those who are reliant on making an income directly out of growing fodder, if this is going to have any significant impact — particularly on the pricing of the product that they're trying to grow at the moment — then you can imagine some people would be a little bit concerned about the announcement and the impact it's going to have potentially on the pricing."

Traders don't think additional fodder will affect market

Tim Ford is the managing director of Feed Central, which described itself as Australia's main selling platform for hay.

"About 120,000 tonnes of feed between those 6,000 farmers is about 20 tonnes of feed each and is less than a semitrailer load," he said.

"If you just go by the number of semitrailer loads that are going up and down our highways all over the country, you can see that it … is a very insignificant volume of fodder."

Mr Ford said it would not have an impact upon on the fodder market.



"If the water is going to be used on-farm then, yes, I imagine it would be of some benefit to the dairy industry and other landholders who are immediately adjacent to those irrigation channels, presuming they've got the infrastructure that they can harvest and presuming that their farms are set up for livestock," he said.

"For a standard, commercial-sized fodder producer, that's about four days' water in an irrigated environment.

"120,000 tonnes is about 1.2 per cent of the national fodder crop, so an increase in supply of 1.2 per cent would never make any difference to the fodder market itself."

"This is one small step that may put a little bit more fodder on the ground for people along the Murray — there's no water in the Darling, so they can't give people another 25 megalitres when there's no water there so it won't make any difference to the upper parts of the Murray-Darling system," he said.


- ABC

© ABC 2019

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