Almond plantings boom as developers cross border to NSW
Almond plantings are booming in the Lower Murray despite concerns over water availability, with one farmer saying it was his only choice.
Almond plantations have continued to boom in the Lower Murray despite Victoria closing the door to new irrigation developments three years ago, raising fears the price of water could skyrocket as crops reach maturity.
In a new report released by the Murray Darling Basin Authority, satellite data from Sunrise Mapping and Research found major horticultural investors had crossed the border into NSW, developing 4570ha of new almond plantations in the NSW Lower Murray since 2018.
Industry groups, including the Almond Board of Australia, had lobbied the NSW Government to impose a moratorium on new developments in the Lower Murray to prevent the price of water from soaring and protect existing entitlement holders.
But the Government had resisted calls for a moratorium, and in 2018-2021 recorded its highest rate of growth in permanent plantings in the Lower Murray since comprehensive records started in 2003.
The biggest new development in NSW had been at the junction of the Murray and Murrumbidgee rivers, where privately owned investment firm goFARM had expanded its Canally Aggregation, adding to 1995ha of new almond plantations in a stretch of river from Wakool Junction to Wentworth.
The second largest development was south of Balranald, on the Murrumbidgee River, at the 2193ha Maffra Almond Orchard developed by goFARM in 2018.
Development had also boomed near the NSW towns of Tooleybuc and Goodnight in the Sunraysia region.
And there were more developments on the way, notably property north of Balranald, NSW, known as the 6929ha Homebush Aggregation, marketed by real estate firm Colliers as one of Australia’s largest greenfield development opportunities, with 4735ha “well-suited to permanent plantings”.
A NSW Department of Planning and Environment spokesperson said responsibility for high horticultural water demand rested with South Australia and Victoria, which had larger areas of land in the Lower Murray dedicated to permanent plantations such as almonds, mostly developed before 2015.
“The vast majority of almond plantations are in Victoria and South Australia, and NSW cannot put a moratorium on plantations in other states,” the spokesperson said.
Victoria placed a moratorium on new developments below the Barmah Choke three years ago, and growth in plantings on the Victorian side of the Lower Murray was expected to slow as new developments approved before 2019 came to completion.
Figures in the latest MDBA report revealed almonds had officially replaced wine grapes as the dominant horticultural crop in the Lower Murray, with a total area of 45,000ha, overtaking wine grapes at 43,615ha.
The dominance of almonds in the region was expected to put increased pressure on water supplies. Almonds demanded an average of 12.5 megalitres of water a hectare annually, according to the Almond Board of Australia, higher than grapes, which needed 9-10ML/ha, and citrus, which required 8-10ML/ha.
ASPARAGUS TO ALMONDS
For fourth-generation farmer Darren Minter, who grows asparagus, almonds and citrus in Iraak, in Victoria’s Sunraysia region, the expansion of his almond plantings makes economic sense.
This year Mr Minter will pull out about 100ha of asparagus and replace it with 82ha of almonds and 20ha of citrus.
“I can’t wait to get a smile back on my face and enjoy farming again … It was either this or sell up and walk away,” Mr Minter said.
For years Mr Minter has struggled to keep his asparagus crop – which his family has been growing for 95 years – viable. He has been battling against cheaper international imports from countries such as Peru, and rising water prices. During the pandemic he has been worn down by a shortage of labour and shipping delays.
“Asparagus has to be picked everyday. It needs one person per acre, picking and packing. If you miss it by half a day, it’s no good. (You have to pay) public holidays and overtime rates,” he said.
In comparison, almonds are a crop that can be maintained with a much smaller workforce and mechanical pruning and harvesting.
“I can sit (staff) in airconditioned cabs, and they’re happy and they’ll keep doing it all day,” he said.
Meanwhile, the water almonds need – about 13ML per hectare per year on Mr Minter’s farm – is “not much more” than asparagus, which need about 10ML of water per hectare, Mr Minter said.
Mr Minter’s expansion of his almond crop, which will total 155ha once the new plants go in, represents a broader shift in the Lower Murray that analysts and water traders are tracking closely.
A new report released this week by the Murray Darling Basin Authority shows Mr Minter is part of a continuing trend favouring almond crops over the past 20 years, and he isn’t the only one putting in new crops this year.
And there are more developments on the way. A property north of Balranald, NSW, known as the 6,929ha Homebush Aggregation, is being marketed by real estate firm Colliers as one of Australia’s largest greenfield development opportunities, with 4,735ha “well-suited to permanent plantings”.
And in February, goFARM Australia listed its Sandmount Farms aggregation – at Katunga, northern Victoria – for $250 million, marketed for its potential to become one of southern Australia’s biggest horticulture farming operations with 4000 hectares of almonds.
MAJORITY OF NEW ALMOND PLANTINGS IN NSW
The NSW almond developments centred around the NSW LGA of Balranald, near the junction of the Murrumbidgee and Murray Rivers.
Balranald Shire Council administrator Michael Colreavy said the new almond developments offered a lifeline to the area, which would otherwise have a shrinking population.
“Given our very small population, if you get an extra 100 jobs in an area like this, that’s one or two per cent on your population,” Mr Colreavy said.
Until 2018, new almond developments were largely focused on Victoria, which still has the largest overall area of land in the Lower Murray – more than 26,000ha – dedicated to almonds.
The shift followed a moratorium three years ago on new irrigation developments in Victoria, which was backed by the Australian Almond Board and other industry groups concerned about increasing competition for limited water supplies.
Mr Minter, who sits on the ABA, said the increasing demand for water was “everyone’s biggest concern”.
“We need no more water to be allocated out of the system until they (governments and the MDBA) can work out how they can get the water to us,” he said.
The MDBA declined to comment on its latest findings, but in a webinar last year, MDBA director of system review Dr Ben Dyer told farmers the “large amount of permanent horticulture” planted in the Lower Murray, combined with impacts of climate change, could lead to an “increased risk of (water) shortfall”.
The spokesperson said the Barmah Choke trade balance and the Murrumbidgee Inter-Valley Trade account “effectively provide(e) a limit to the volumes of water that can be traded into the Lower Murray”.
What these accounts do not limit, however, is the price of water skyrocketing as an increasing number of producers jostle for limited water supplies.
‘BEAUTIFUL STORY’ FOR TRADERS LOOKING TO PROFIT FROM THE WATER MARKET
Water traders are rubbing their hands at the growth in almond plantings on the Murray, which they say will push up the price of water to unprecedented levels.
In a candid presentation to investors last year, the chairman of Duxton water, the only publicly listed water trader in Australia, said the growth in permanent plantings in the Murray-Darling was an “economics 101 supply-demand imbalance”.
“It is so perfect, you couldn’t make up a better story,” Duxton water chairman Ed Peter said.
Mr Peter told investors the price of water was likely to skyrocket during the next drought, because the demand for water had outpaced supply.
“We’re going to have the next drought, not if but when, and there’s going to be one heck of a fight for the marginal supply of water,” he said.
At the time of the presentation, permanent plantings in the Murray required 700GL of water annually. When they reach full maturity, they would need about 1250GL – less than the 1100GL of available freshwater in the whole of the lower Murray Darling during the last drought, Mr Peter said.
Mr Peter said Australia could look to California to see how high water prices might go.
Almond producers in California were able to withstand water prices as high as $US24,000-$26,000 ($AU30,000) per megalitre for the equivalent of a high security entitlement. In Australia, the most expensive water to date was about $AU8,000 per ML, he said.
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