B.FLT.2000 - Water Report

Summary

- There was a lack of clear, comparable evidence on feedlot water use, its economic value, and its criticality relative to other industries, limiting informed decision-making around water allocation and industry growth.
- MLA commissioned analysis using a multi-pillar framework that assessed water use across volume, economic value (GVA per ML), and criticality, supported by modelling, literature review and industry data.
- The study found feedlots use a small share of national water (~0.13%) but generate relatively high economic value per megalitre, with water being essential and largely non-substitutable for production.

Objectives

The objective of this project was to strengthen the evidence base on water use in the Australian feedlot industry and improve comparability with other sectors to support informed decision-making.

The project quantified total water use, assessed economic value per megalitre (GVA/ML), and applied a criticality framework to evaluate the role of water in feedlot production relative to agriculture, mining and manufacturing.

It also aimed to distinguish feedlot water use from broader agricultural categories, highlighting differences in scale, value and operational importance to support more accurate policy, planning and investment decisions.

Key findings

- Feedlots account for a small share of national water use (~20,000–23,000 ML; ~0.13% of total), highlighting that their overall volume demand is relatively low compared to other sectors.

- Despite low volume use, feedlots generate high economic value per unit of water (~$28,200–$32,900 per ML), significantly outperforming the broader agriculture sector on a value-per-use basis.

- Water is a critical, non-substitutable input, with 78–91% used for livestock drinking, meaning even small reductions in water availability can directly impact cattle health, welfare and production.

- The study confirms feedlots are among the most water-critical production systems, combining high essentiality with limited flexibility, reinforcing the need to consider criticality—not just volume—when making water policy and allocation decisions.

Benefits to industry

This project has provided critical evidence to support more informed water policy and allocation decisions by clearly demonstrating the feedlot sector’s low water use but high value and essential reliance on water. By distinguishing feedlots from broader agriculture, the findings help ensure the industry is appropriately considered in planning and investment, supporting sustainable growth and improved resilience under increasing water constraints

MLA action

- MLA is using the findings to inform water policy and planning discussions by providing robust evidence on the feedlot sector’s water use, value and criticality. 

- The outcomes are supporting industry advocacy and stakeholder engagement by clearly distinguishing feedlots from broader agriculture in water allocation decisions. 

- MLA is leveraging the results to guide future RD&A investments and develop improved data, benchmarking and decision-support tools for sustainable water management.

Future research

- Improve the evidence base through more granular data on feedlot water use by region, climate, system and scale to support more accurate benchmarking and planning. 

- Enhance comparability with other sectors by aligning datasets, methodologies and timeframes across agricultural and industrial water users.

- Expand analysis to include marginal value of water and supply chain (embedded) water use to better understand whole-of-system impacts and decision-making under scarcity.

- Develop scenario modelling for water scarcity, allocation and quality constraints to inform policy, investment and industry resilience strategies.