GIN Gin farmers Barry (pictured) and Shonnay Smith are faced with a staggering $5000 electricity bill every time they switch on their centre pivot irrigator.
The Smiths, who have a 425m pivot that waters about 60ha of black soil country in the highly productive Delan district east of Gin Gin, said the cost of electricity had doubled during the past three years.
“It’s big cost, but what can you do,” Mr Smith said. “It’s only the incredible demand that this drought is creating for fodder that is keeping this business profitable.”
Like electricity, fodder prices have dramatically increased. Round bales that were worth $65-$70 are making up to $175.
However, unlike electricity prices, elevated fodder prices will fall once the long-running drought finally breaks. Energy companies have already flagged further major price increases.
It may be cheaper on the face of it, but you have to pay an upfront fee and also pay for all of the electricity allocated, whether you use it or not.
The Smiths said in attempt to reduce their mammoth electricity bills, which top more than $100,000 a year, they had switched to what had been promoted as a more cost effective tariff for farmers.
“It may be cheaper on the face of it, but you have to pay an upfront fee and also pay for all of the electricity allocated, whether you use it or not,” Mr Smith said.
“The reality was that it worked out to be even more expensive. We were quick to switch back to the previous tariff, even though that means we have to do significantly more work at night.”
The pivot is being used to apply up to 37mm over a 24 hour period to water both grain and fodder crops. The Smiths’ 325ha farm has some 140ha of cultivation.
“We like being able to hedge our bets,” Mr Smith said. “It’s great to be able to be able to both harvest grain and make fodder.
“It’s a high cost business. It’s not just the cost of running the irrigator but also the cost of pumping water to the irrigator, the cost of the water itself, as well as seed and fertiliser.”
The Smiths aren’t the only farmers attempting to steer their way through the confusing field of electricity pricing.
Energy dependent farmers are pushing for a specific food and fibre tariff that recognises the specific needs and importance of agriculture to the community.
Queensland Farmers Federation president Stuart Armitage said based on current state government policy and tariff offerings, many agricultural businesses faces further bill increases in excess of 50 per cent when they are forced on to standard business demand-based tariffs in less than two years.
“If action is not taken, unsustainable electricity price increases and lagging productivity will result in more expensive food and fibre and a loss of international competitiveness,” Mr Armitage said.