Northern Victorian irrigators are becoming more exposed to the vagaries of the allocation water trade market, as farmers sell-off high-reliability water and rely on the temporary market, a new report has found.
Most farmers surveyed said $200/Ml was too high to viably operate a farm.
The performance of dairy farms was closely linked with water availability.
Goulburn Murray Irrigation District farmers use about 25 per cent less water in an average season than they did in 2010-11.
This correlates with reduced milk production in the region during the same period.
The land area devoted to dairying in the Goulburn Murray region has dropped by one third in less than 10 years, according to new studies released in Shepparton last week.
The reports also found that the remaining dairy farms were heavily reliant on temporary water prices, as property owners sold off their water allocations.
The Goulburn Broken Catchment Management Authority report into land use and water paints a picture of dramatic change for the industry.
While Goulburn Murray irrigators owned a total of 1543Gl in high-reliability water in 2004-05, the volume dropped to about 1000Gl in 2015-16.
Dairy farmers are using about 60 per cent more water than they own now.
Farmers and communities in the Goulburn Murray Irrigation District need to continue to adapt to changes in water supply and land use to remain competitive, is one message to emerge from the reports.
Goulburn Broken CMA chief executive officer Chris Norman said the findings of the Regional Irrigated Land and Water Use Mapping and The Challenges and Opportunities of Changes to Water Availability on the Food and Fibre Sector reports provided solid data to inform decisions in the GMID.
‘‘There is now a huge weight of work that confirms, among other things, that less water is being used by irrigators across the GMID, that there is more demand for high-security water from outside the region and irrigators are more reliant than ever on temporary water to meet their production needs and therefore are more exposed to higher water prices than in 2004-05 when we last did this level of in-depth analysis,’’ Mr Norman said.
Lancaster farmer Kelvin Bruce said the report confirmed what many farmers could see happening around them.
‘‘We now have the data and the facts confirming these changes so we can try to deal with them,’’ Mr Bruce said.
The report found that in 2015-16, more than 30 per cent of dairy farmers owned less than 200Ml of high-reliability water and 4.2 per cent owned none at all.
About 73 per cent of dairy farmers interviewed said they did not own enough water entitlement to meet their irrigation needs.
Despite the many challenges faced by the region, the farmers and communities remain resilient and resourceful.
‘‘More than 70 per cent of the farmers surveyed remained optimistic, saying they believed they would still be farming their property in the next five to 10 years, and half planned to pass their property on to a family member,” Mr Norman said.