Irrigation water in dry years: sell, buy or apply?


A supplementary irrigated wheat scenario, Central West, NSW.

Key Messages

  • A seasonal analysis of the temporary water market during a recent period of research showed a gross margin of $319/ML could be achieved if water were sold at a market average price.
  • Hay prices and hay production need to exceed the dual economic thresholds of $500/t and 4.5t/Ha respectively, before planting the crop became the preferred option to selling water.
  • A sensitivity analysis of purchasing additional 1.5 ML/ha water, assuming a hay yield response of 2t/Ha found Return on Investment was very sensitive to water buy price.
  • Central West Farming Systems (CWFS) wheat variety trials found a wide variation in crop yields and suitability of cultivars. Wheat variety selection can help mitigate production risk and firm up crop revenues and subsequent water gross margins.

About the research

Smarter Irrigation for Profit Phase 2 (SIP2) is a partnership between the irrigation industries of sugar, cotton, grains, dairy and rice, research organisations and farmer groups. The aim of the Key Learning Sites, SIP2 project is to optimise the limited availability of water resources to obtain maximum dollars per mega litre across a range of irrigated cropping systems. The information in this case study is taken from the Central West Farming Systems (CWFS), managed site at Condoblin.