Hot on the heels of Ruralco upgrading its national water trading service, agribusiness rival, Elders, has confirmed it has much bigger ambitions in the water market, too.
The 177-year-old farm services agency and advisory group has just boosted its broking team’s ranks to 17 and wants more recruits as it responds to increasing trading activity and inquiry in the water market.
Brokers, Anthony Bent, Kevin Rochow, Matthew Moar, and Peter Gale have been lured from Australia’s biggest water exchange business, Waterfind, to join Elders’ Adelaide head office as national trading specialists.
They will be working in partnership with another 13 brokers Australia-wide whose roles have traditionally been split between water and real estate transactions.
Elders says while each season brings different demand and trends in irrigation water usage, farmers were increasingly realising the capital value of their water assets in much the same way they traded livestock, grain or wool.
“People are well aware of the value of the asset,” said Elders real estate general manager, Tom Russo, responsible for strategic development of Elders real estate portfolio, including rural and residential activities, home loans and water trading.
He said Elders’ close client relationships and marketing capabilities had led to increasing inquiry about trading options available to farmers with water to spare and from those wanting to manage their water needs more strategically.
Last week Ruralco expanded and re-launched what it described as Australia’s largest independent internet-based water market trading platform – waterexchange.com.au.
It allows irrigators, government bodies or agricultural corporate groups to trade a variety of water products.
The website was previously only open to Ruralco water brokers monitoring the market or making trades on behalf of clients.
Ruralco, which also owns the irrigation equipment group, Total Eden, has become active in the water broking space since about 2011.
Growth in irrigated agriculture, particularly new tree crops such as nuts, and expanding cotton production, combined with changing weather trends and tighter water extraction regulations, have prompted some big spending on water rights in recent years as well as the rise of new class of water-focused corporate and investment groups.
Last October listed agricultural property fund, Rural Funds Group, paid $34 million for a 9549-megalitre water entitlement, in one of the Murrumbidgee Irrigation Area’s biggest water deals.
Securing appropriate water entitlements has also become crucial for existing family farm irrigators.
Commodity marketing is central to our DNA and our agency network is all about servicing farmers, so it makes sense to help our clients with water trading strategies
- Tom Russo, Elders
“The market is getting more sophisticated and offering more ways for farmers to leverage value from their water portfolio,” Mr Russo said.
“Commodity marketing is central to our DNA and our agency network is all about servicing farmers, so it makes sense to help our clients with water trading strategies.
“It might be selling or leasing temporary entitlements over a season or two, or taking a forward price position on water you may need later in the year.
“Water is another commodity, and critical to Australian agriculture.”
Mr Russo said Elders did not currently have any plans to invest in water infrastructure businesses, but was focused on building an industry-leading, “capital light” broking arm based around “high calibre professionals delivering value to our clients”.
With so many new water market players and different trading options creating more choices for clients, Elders expected more demands on its water specialists.
“We want to grow,” he said.
“We’re open to creating positions for more more people in rural or capital city locations.”
New recruit, Mr Bent, who will lead the new water trading team after several years with the 14-year-old Waterfind, was looking forward to working within a national network entrenched and respected in rural Australia.
“We’re excited about the opportunities we will be able to create for clients to maximise the returns from their water portfolios.”