Weekly property overview: The altering face and way forward for S. Kidman & Co

Gina Rinehart, with a few of Hancock’s rising Wagyu herd

THIS week’s property overview appears at causes behind the change in route for Gina Rinehart’s two pastoral companies – Hancock Agriculture and the S. Kidman & Co three way partnership – and a few attention-grabbing developments within the property area regarding the firms.

No one has been extra lively within the Australian grazing property market than Ms Rinehart over the previous 5 years, each as a purchaser and vendor.

Hancock Agriculture and Kidman Cattle Co collectively run about 240,000 head of branded cattle (with extra anticipated after the following muster) on six million hectares throughout 22 properties (embody a number of aggregations) working in New South Wales, Queensland, Western Australia and the Northern Territory.

As a part of its Wagyu program, Hancock additionally operates numerous devoted feedlots for Wagyu applications. Extra on that as a part of Beef Central’s lately launched Prime 25 Lotfeeders characteristic, being revealed over the following 4 weeks.

When Mrs Rinehart determined to dump eight properties spanning 1.9 million hectares in 2020, some media noticed this as first indicators of her ‘bowing out’ of agriculture. The claims couldn’t have been farther from the reality.

Australia’s richest girl was merely realigning her technique to enhance the genetics and high quality of her cattle and in addition create a greater steadiness between her breeding and ending nation.

There’s additionally compelling proof it was about decreasing her publicity to northern reside export commerce, in favour of conventional Australian manufacturing and processing.

Hancock Agriculture

Previous to its mining exploration success, the Hancock household owned and operated numerous well-known cattle stations in WA’s north, together with Ashburton Downs and Hamersley Station.

When Mrs Rinehart took management of Hancock Prospecting, she diversified her enterprise pursuits past iron ore and made a string of cattle station investments together with:

• 400,000ha Fossil Downs (capability of 20,000hd), Kimberley, WA
• 265,000ha Liveringa (capability 28,000hd), Kimberley, WA
• 312,730ha Mulga Downs (capability 8000hd), Pilbara, WA
• 203,142ha Nerrima, Kimberley, WA. In September 2021, it was bought to WA’s Emanuel household for round $30m (together with 15,000hd cattle).
• 171,000ha Willeroo, adjoining Aroona, west of Katherine, NT. In October 2021, it was purchased by Hamish and Georgia Brett (Brett Cattle Co).
• 147,000ha Aroona, close to Katherine, NT. In December, it was bought in December 2021 by the DiGiorgio Household, Lucindale, South Australia.
• 3500ha Phoenix Park reside export depot and holding facility close to Katherine. In January 2022, it was bought to Crown Level Pastoral (a three way partnership between Viv Oldfield and Danny Costello).
• 550,000ha Riveren and Inverway, Victoria River District, Northern Territory. In April 2022, it was bought to Peter and Jane Hughes for round $100m together with 40,000 head of cattle.
• 457,200ha Brunchilly Station (capability 24,000hd) breeding operation on the Barkly Tablelands of the Northern Territory. In November 2022, it was properly superior in a sale course of together with three historic Channel Nation backgrounding and grass ending holdings in south-west Queensland.

Realignment

Brahmans destined for reside export featured closely in Hancock Agriculture’s earlier enterprise mannequin, and whereas they’re nonetheless run on some Western Australian holdings similar to Fossil, Liveringa and Mulga Downs, because the pastoral portfolio has restructured in several areas, they’ve been largely changed by Wagyu in New South Wales, Queensland and southern Western Australia.

In the present day, Hancock Agriculture is concentrated on rising a premium Fullblood Wagyu herd, with a medium-term goal to show off 12,000 head a 12 months.

The enterprise is focussed on getting its grainfed mannequin proper. It’s at present trialling some non-Wagyu cattle on 150-day applications, up from 100 days, in a bid to steadiness meat high quality with total financial return.

Hancock Agriculture and S. Kidman & Co interim chief government officer, Adam Giles, stated it was all about ‘paddock to plate’.

“Our grazing properties breed, background and end cattle, and our cropping properties produce the grain which our feedlots feed to the cattle to enhance meat high quality. On high of that we’ve got a meat gross sales and advertising and marketing staff to supervise the processing and to distribute the product.”

Hancock properties

For shut to 10 years, Hancock Agriculture has been shopping for up grazing nation within the increased rainfall areas of southern Queensland and northern New South Wales – best for Wagyu operations. Right here’s a number of the offers:

• November 2014 – A collection of small dairy, beef and peanut properties overlaying greater than 3500ha in southern Queensland’s South Burnett. When plans for the Hope Dairies Mary Valley milk powder operation have been shelved, the aggregation was repurposed right into a Wagyu beef breeding operation.
• December 2014 – the 4600ha Dubbo district grazing properties Boogadah and Caigan close to Mendooran have been bought for $25m together with the 3000 head extremely regarded Inexperienced Hills fullblood Wagyu cattle herd (together with 1600 elite fullblood females).
• November 2015 – the showcase 10,000ha Glencoe Station, north of Dubbo, is bought for $30m.
• December 2016 – 1011ha breeding property Hiddendale, additionally north of Dubbo, is added to the adjoining 4600ha Boogadah and Caigan. Collectively, the three properties are generally known as the Caigan Aggregation.
• June 2017 – the 8000 head specialised Wagyu feeding enterprise Maydan feedlot close to Warwick in southern Queensland.
• December 2017 – Holyrood (adjoining the Rockybank stud farm) and South Maffra at Roma in southern Queensland.
• Forestvale north of Mitchell in southern Queensland.
• August 2018 – 17,800ha Sunset Valley, close to Kingstown, west of Armidale – one in all NSW’s finest recognized and largest-scale backgrounding and ending operations. The enterprise additionally owns one other unnamed Kingstown property.
• August 2018 –1607ha 7000-head Gunnee feedlot close to Inverell.
• November 2018 – 3234ha Glendon Park Aggregation (comprising 4 properties), 40km north-east of Armidale.
• October 2019 – historic 3900ha Warrabah Station, between Kingstown and Manilla, west of Armidale. It neighbours the three Lyndhurst holdings spanning 3280ha.

Not too long ago, the corporate diversified from these excessive rainfall areas on Australia’s east coast, taking possession of an aggregation of properties (believed to be close to or together with Mrs Rinehart’s property Lang’s View) on the outskirts of Perth to develop Wagyu beef.

Drought mitigation belongings

The forward-looking firm has additionally secured two sizeable belongings for drought mitigation.

A 12 months in the past, Hancock Ag made its first foray into devoted cropping nation with the acquisition of the 3073ha Warra Warra on Queensland’s Western Downs for between $27m and $28m.

The acquisition was seen as a devoted grain play, not essentially built-in into the corporate’s cattle or lot feeding pursuits. The rationale was to diversify the corporate’s funding portfolio by securing high-quality farming land and water. Warra Warra boasts Condamine River and Cooranga Creek frontages.

Then, in October 2022, Hancock Agriculture secured three irrigated cropping properties within the Wee Waa area of New South Wales in a transaction value round $150m. The 6856ha parcel featured sizable, dependable water entitlements, with a mixed allocation of 23,000 megalitres plus 7000ML of groundwater.

Kidman & Co

In December 2016, Gina Rinehart partnered with China’s Shanghai Cred (a consortium generally known as Australian Outback Beef) to purchase the long-lasting S. Kidman & Co for $386.5 million.

The bulk three way partnership buy was greater than only a enterprise alternative for Mrs Rinehart.

On the time she stated, “the acquisition retains an iconic Australian enterprise in majority Australian possession and echoes the pioneering spirit of Kidman’s founder, Sir Sidney Kidman – who himself had been in partnership with my maternal grandfather, James Nicholas.”

1. Kidman & Co, based by pastoral legend Sir Sidney Kidman within the Eighteen Nineties, was the most important landholder in Australian historical past and one of many nation’s largest beef producers, with pastoral leases overlaying 101,000sq km throughout South Australia, Western Australia, the Northern Territory and Queensland.

The enterprise was supplied on the market in April 2015 and included 19 particular person properties operated as 12 enterprises, comprising 10 cattle stations, a bull breeding stud farm and a feedlot.

Nevertheless, the potential of the corporate being bought by foreigners, together with the Chinese language, triggered a vocal public backlash. Ultimately, the federal authorities’s strategy to the sale of Kidman “enabled a neighborhood Australian firm to pay a good market value and retain Kidman in Australian management.”

Kidman’s 23,677sq km Anna Creek (the world’s largest cattle station) and The Peake (outstation) have been carved off the portfolio and secured by neighbouring cattle producers, Williams Pastoral Holdings, decreasing the general S. Kidman & Co land space to 77,700sq km.

That 2016 enterprise alternative was initially constructed round a proposal to live-export giant numbers of Kidman slaughter weight cattle to an island off the coast of China for native processing. That idea, which attracted widespread nationwide headlines on the time, by no means eventuated.

Divestment

In November 2020, Hancock Agriculture and S. Kidman & Co introduced plans to divest some pastoral holdings from their portfolios to concentrate on different agricultural and cattle alternatives.

In March 2021, the plan was activated and eight properties spanning 1.9 million hectares have been supplied to the market.

Hancock Agriculture wouldn’t touch upon the gross sales, however Beef Central understands the eight properties raised round $350 million.

The sale included the Kidman-owned 7967sq km Ruby Plains aggregation (comprising the 480,000ha calf manufacturing facility Ruby Plains and 316,000ha outstation Sturt Creek) in Western Australia’s Kimberley.

In September 2021 it was bought by outstanding Alice Springs businessman Viv Oldfield for $70m together with round 25,000 head of Brahman cattle.

Whereas South Australian Kidman properties Innamincka and Macumba Stations weren’t initially supposed to be a part of the Hancock/Kidman divestment course of, promoting agent Elders acquired vital curiosity from a number of events.

In October 2021, it was revealed that Mr Oldfield had additionally secured the low rainfall, principally desert nation, with some channels, in an off-market settlement.

• 13,552sq km Innamincka (capability 12,740hd) – SA’s second largest cattle station is situated on Cooper Creek within the Channel Nation.
• 11,063sq km Macumba (capability 9000hd), situated additional west, is used for breeding cattle.

In April 2022, Kidman listed its final remaining South Australian beef trade asset – the 18sq km Tungali Feedlot (licenced for 4966 customary cattle models).

Situated within the state’s jap nook close to Sedan (on the sting of the Barossa Valley), it was bought 4 months later to close by grainfed beef producers, Simon Rowe and household’s Princess Royal Station (see upcoming Prime 25 Lotfeeders profile).

The sale of Innamincka, Macumba and Tungali ended 122 years of South Australian pastoral land possession for the long-lasting firm based by Sir Sidney Kidman.

Late final 12 months, Beef Central reported that S. Kidman & Co was properly superior in a sale course of to divest three historic Channel Nation backgrounding and grass ending holdings in south-west Queensland.

• 5540sq km Glengyle (capability 7735head) located within the coronary heart of Georgina River channel nation is right for breeding and rising cattle.
• 6600sq km Durrie (capability 9100 head) situated within the Diamantina channel nation is taken into account to be a number of the finest grazing in Queensland.
• 7510sq km Naryilco (capability 11,520head) on the southern finish of the channel nation in south-west Queensland is extremely regarded for producing glorious bullocks.

Kidman & Co immediately

Seven years after the sale of S. Kidman & Co to Gina Rinehart, a lot of the authentic portfolio established by Sir Sidney Kidman has been bought off, with simply three of the ‘higher’ properties remaining:

• 5700sq km Helen Springs (30,000hd) a breeding property on the western finish of the Barkly Tablelands within the Northern Territory.
• 8910sq km Durham Downs (together with the Woomanooka outstation) – the extremely regarded breeding and backgrounding property with a 20,210 head capability is situated within the state’s south-west channel nation.
• 6230sq km Morney Plains (capability 10,695head) – additionally located in south-west Queensland is a prized channel nation breeding and rising property.

The 14,600ha Rockybank (capability 3300hd) a stud breeding centre at Roma in south-west Queensland (bought by S. Kidman & Co simply earlier than the sale to AOB) can be being retained.

The place does that go away S. Kidman & Co?

So, the place does that go away S. Kidman & Co?

When it comes to governance, nothing has modified. Gina Rinehart continues to personal 67 % of the corporate, whereas Shanghai Cred holds 33 %.

Adam Giles, interim CEO of Hancock Agriculture and S. Kidman & Co, stated like Hancock Agriculture, Kidman was realigning its cattle genetics to enhance its beef consuming qualities.

“It has moved away from nation and cattle which are extra suited to tropical areas of Australia to properties which are extra in keeping with cattle that carry out higher with backgrounding and feeding and current properly when processed for the home and export plated market,” Mr Giles stated.

Kidman now focuses on 100-day and 150-day grainfed Santa Gertudis, and first cross Wagyu cattle fed for 350 days and processed into model applications promoting domestically and exporting internationally to a number of the best motels and eating places.

Given its latest property divestments, a cashed-up Kidman could also be more likely to observe an identical mannequin as Hancock Agriculture and safe increased rainfall nation nearer to feedlots and markets.

Beef Central understands numerous property acquisitions are properly superior, with the enterprise additionally nation in Victoria.

It’s strongly indicated than Kidman has secured all or a part of Packhorse Pastoral Co’s cattle portfolio put collectively by the late Tom Strachan.

These three blue-ribbon southern Queensland and northern New South Wales grazing properties are below contract following an expressions of curiosity marketing campaign that closed in mid-December, nevertheless CBRE’s James Auty was unable to debate the sale due a confidentiality settlement.