10-Year Water Price History: Southern MDB 2016 to 2026

The decade in one table

Zone 1A (Greater Goulburn) annual VWAP — the benchmark for the southern Murray-Darling Basin:

| Water Year | Zone 1A VWAP | Zone 6 VWAP | Key Driver | |------------|-------------|-------------|------------| | WY2017/18 | $106/ML | $117/ML | Recovery from 2016 El Nino | | WY2018/19 | $366/ML | $414/ML | El Nino, low allocation, drought | | WY2019/20 | $485/ML | $478/ML | Severe drought, Eildon ~20% | | WY2020/21 | $115/ML | $131/ML | La Nina onset, prices collapse | | WY2021/22 | $63/ML | $66/ML | Double La Nina, storages full | | WY2022/23 | $36/ML | $37/ML | Record wet, lowest prices in dataset | | WY2023/24 | $68/ML | $57/ML | El Nino but storages entered high | | WY2024/25 | $104/ML | $113/ML | Neutral-to-dry, recovery | | WY2025/26 YTD | $258/ML | $267/ML | Strong El Nino signal, IOD+, Eildon low |

The range: $36/ML to $485/ML. A 13x swing in under three years. No other farm input moves like this.

What drives the cycle

After a decade of data, the hierarchy is clear:

1. Rainfall and inflows (primary). When it rains across the southern MDB catchment, dams fill, NVRM announces high allocations, supply floods the temporary market, and prices fall. When it does not rain, the opposite. Everything else is secondary to this.

2. Allocation announcements. NVRM publishes fortnightly determinations based on storage and modelled inflows. Each step-up adds supply. A 10% upward revision typically drops prices 5-15%. A downward revision in January-February causes 10-25% spikes because buyers have no alternative season remaining.

3. Permanent crop demand floor. Almonds (10-14 ML/ha), citrus (8-12 ML/ha) and other permanent plantings cannot reduce water consumption. Their owners buy at almost any price before losing trees. Estimated national almond water demand now exceeds 2,400 GL/year — this structural demand floor did not exist before 2010 and has permanently lifted the price trough.

4. Carryover volumes. Large carryover stocks from wet years moderate the early-season price rise when conditions turn dry. But once carryover is consumed (sold or used), prices accelerate.

5. IVT limits. When the Goulburn-to-Murray IVT exhausts, zone prices diverge. Zone 1A may soften while Murray zones firm.

The drought years: 2018-2020

This period fundamentally reset expectations about water costs.

Inflows into the southern MDB collapsed through 2018. Eildon fell toward 20%. NVRM opened Goulburn HRWS at approximately 20% in WY2019/20 — the lowest in the VWR data era. LRWS received nothing. Murray allocations were also deeply curtailed.

Zone 1A prices surged past $400/ML by late 2018 and averaged $485/ML through WY2019/20. Zone 6 tracked at $478/ML. For irrigators relying on purchased allocation, water became the single largest input cost — exceeding fertiliser, fuel and labour combined.

Permanent entitlement values peaked above $4,000/ML for Zone 1A HRWS. The market attracted intense media scrutiny, ACCC investigation, and political attention. The structural driver was simple: permanent plantings (almonds, citrus) planted in the preceding decade hit full production and demanded water that the climate could not provide.

The flood years: 2020-2023

Three consecutive La Nina events transformed the market.

Rainfall across the MDB catchment was well above average. Eildon filled. Hume reached capacity. Allocations hit 100% early. Zone 1A allocation dropped to $63/ML in WY2021/22 and then $36/ML in WY2022/23 — the lowest in the VWR dataset.

Total southern MDB commercial allocation trade value collapsed from $538M (WY2019/20) to $28M (WY2022/23). The market was awash with cheap water.

Permanent entitlement values softened to $2,000-3,000/ML. Anyone who bought HRWS at $4,000+ during the drought faced significant paper losses. The lesson: entitlement values are cyclical too, just with longer wavelengths.

Recovery and acceleration: 2023-2026

As La Nina ended, the market found a floor around $68/ML (WY2023/24) and began recovering. WY2024/25 averaged $104/ML on neutral-to-dry conditions. Then WY2025/26 accelerated sharply.

The current season opened with Eildon at approximately 38% — the lowest July 1 level since WY2019/20. Goulburn HRWS opened at 31% and reached only 80% by season end. LRWS received 0% all year. IOD turned positive. Zone 1A prices ran to $300-320/ML at the January-February peak, averaging $258/ML for the season.

This is not a drought yet. Goulburn HRWS at 80% is tight but not extreme. What it demonstrates is that the structural price floor has risen — even a moderate dry season now produces prices above $200/ML because permanent crop demand is higher than it was during the millennium drought.

The price-storage correlation

Eildon's percentage full on 1 July is the best single predictor of the coming season's VWAP:

| Eildon July 1 | Typical Season VWAP | |---------------|---------------------| | >80% full | $50-120/ML | | 60-80% | $100-200/ML | | 40-60% | $200-350/ML | | Below 40% | $350-500+/ML | | Below 20% | $500-900/ML (millennium drought estimate) |

Eildon is currently at 42% and falling at approximately 18,000 ML/week. It will likely enter WY2026/27 below 40%. If winter rain does not recover storages significantly, next season sits in the $300-450/ML range based on historical correlation.

Zone basis spreads

Zone 7 (below the Barmah Choke) consistently trades at a downstream premium:

| Water Year | Zone 1A | Zone 7 | Premium | |------------|---------|--------|---------| | WY2021/22 | $54/ML | $89/ML | +$35/ML | | WY2022/23 | $21/ML | $33/ML | +$12/ML | | WY2023/24 | $57/ML | $83/ML | +$26/ML | | WY2024/25 | $124/ML | $174/ML | +$50/ML |

The premium reflects the physical delivery constraint of the Choke and the inelastic permanent crop demand below it. SA Murray trades at an even larger premium — $186/ML in WY2024/25 versus Zone 1A at $124/ML.

What this means right now

The cycle is accelerating. We are in the rising phase. Prices have gone from $36/ML (trough) to $258/ML (current) in three years. The setup for WY2026/27 is concerning: Eildon below 40%, Hume at 27%, IOD positive, developing El Nino.

The price floor is higher than last cycle. The millennium drought produced $500-900/ML when the almond industry was a fraction of its current size. Today's structural demand floor (2,400+ GL of permanent crop demand) means even moderate dry conditions produce $200+ pricing.

Wet years will still come. La Nina events will refill dams and crash prices. They always do. But the trough is probably $40-60/ML now rather than $20-30/ML, because the demand floor has risen permanently.

The best time to buy entitlements was 2021-23. The second best time is the next wet year. Entitlement values soften when allocations are cheap and plentiful. If you are waiting for another La Nina to buy permanent water at $2,000/ML, you might get that chance — but not this year.

Read our guide on when to sell water for timing strategies, or review the difference between allocations and entitlements.

Check our water pricing guide for current live pricing across all zones.

Disclaimer: Past water prices are not a reliable indicator of future prices. Water allocation values are subject to seasonal conditions, government policy, and other factors beyond anyone's control. This analysis is general information only and does not constitute financial or investment advice. Seek independent professional advice before making water trading decisions.