Northern Victorian irrigation allocations increased on back of good rainfall in catchments

But the resource manager Andrew Shields warned more rain was required to maintain flows into the storages to increase seasonal determinations.

"The latest Bureau of Meteorology seasonal outlook indicates below-average rainfall across all of northern Victoria is more likely during the August to October period," Mr Shields said.

Increases announced on Thursday included:

Seasonal determinations in the Broken system remain on 0pc HRWS, while the Bullarook system remains on 100pc HRWS and 100pc low-reliability water shares.

The low allocations and poor seasonal outlook are feeding continued high prices for water.

Water broker H2OX reported water selling in the southern basin from $595 a megalitre to $700/ML.

The Australian Bureau of Agricultural and Resource Economics latest Water Market Outlook, released on Thursday, said water allocation prices in the southern Murray-Darling Basin were likely to remain high in 2019-20.

"Over the last 12 months, water allocation prices have increased dramatically from around $250/ML in July 2018 to over $600/ML," ABARES head of farm performance and resource economics David Galeano.

ABARES modelling suggests a combination of low supply, caused by drought, and growth in water demand in recent years explains the observed increase in prices.

The latest ABARES Water Market Outlook provides a range of possible allocation prices for 2019-20 under average, dry, extreme dry, and wet seasonal condition scenarios.

"Under the dry and extreme dry scenarios, total water availability in the southern basin in 2019-20 would be well below last year but still above levels observed during the worst of the Millennium Drought (2007 to 2009), with ABARES estimating average annual water prices of between $526 and $650 per ML," Mr Galeano said.

"Of course, if we do see a shift to wetter conditions, prices are expected to fall quickly and substantially as they did in 2016-17.

Mr Shields said rainfall in the Victorian catchment areas during July had increased the flows into the major storages and improved the volume of water available.

"The catchments are responding well to the rainfall we have had, however more rain is required to maintain flows into the storages and help increase seasonal determinations," he said.

Mr Shields said there was some improvement in the volume of water available in the Broken system, but more was still needed to ensure carried-over allocation could be delivered throughout 2019/20.

He advised water users to consider available weather and climate information in conjunction with the seasonal determination outlooks when planning their water needs in 2019/20.

This story first appeared on Australian Dairyfarmer