When opportunity knocks, let it in

22 Jun, 2012 04:00 AM
The Napier Ranges make a stunning backdrop to the day to day activities on Napier Downs station on the Gibb River Road.
The Napier Ranges make a stunning backdrop to the day to day activities on Napier Downs station on the Gibb River Road.

OPPORTUNITY knocks every now and then. Some people take it, others may not.

Opportunity knocked for Peter Leutenegger in 1992 when the former helicopter pilot was presented with the chance to buy Napier Downs station.

At the time Peter owned Fitzroy Helicopters and had an intimate knowledge of the Kimberley through flying over it many times in mustering seasons.

Peter admits the opportunity to acquire Napier Downs also involved a bit of luck but it was his knowledge of the station through his helicopter flying that prompted him to make an offer on the property.

"The Brucellosis and Tuberculosis Eradication (BTEC) program in the Kimberleys in the 1980s led to many stations having to destock and Napier Downs was one of them," Peter said.

"While the majority of cattle were mustered and trucked off, the ones that couldn't be mustered had to be shot out and I did a lot of chopper flying for that destock so I came to know the station pretty well.

"I suppose sometimes you can be lucky in life and when Napier Downs went into receivership in the 1980s it was my turn to get lucky.

"I knew Bob McCorry (a well known Kimberley pastoralist who at one stage managed Napier Downs) and he knew the receiver managers of Napier at the time.

"Bob knew I was interested in the station and he came back from Perth one day and told me that the receivers were pretty keen to sell it.

"At the time they were asking $1.2 million for Napier but I wasn't willing to pay that.

"I know that sounds like a bargain in today's terms, but you have to remember that there was nothing on it.

"Stations in the area carrying 10,000-12,000 head of cattle were selling for the same price. That is just what the market was in those days.

"I made an offer, which was considerably less than that, and ended up getting the station relatively cheaply.

"I was also lucky in the fact that, due to my helicopter business, I had other income to support myself while I built the station up."

When Peter took over Napier Downs it was technically still in quarantine.

The only way he was able to reintroduce cattle to the place was in enclosed areas and only then after the area was inspected by the Agriculture Department and confirmed stock proof and free of stock.

"Initially we started running them in the horse paddocks and as we gradually fenced country up we would bring more cattle in," Peter said.

As a station, Peter said Napier Downs was underrated in the 1980s.

"It was a highly regarded station in the 1960s and early 1970s but when the 70s beef slump hit and then the BTEC program kicked in there were very few improvements done to the place," he said.

"Given my connection with it I knew there was some very good country on the place."

Continual improvement to the station over the 20 years he has run it has enabled Peter to lift cattle numbers to 20,000 head, including 8000 breeders.

"My main focus from the outset was putting as much back into the place as I could," he said.

"That is certainly the key to running these places. You have to have improvements otherwise you can't carry the cattle."

Napier Downs is now 380,000 hectares.

"It used to be one million acres, but there was a bit of a realignment between here and Kimberley Downs station, which is next door," Peter said.

"Pretty much forever the two stations had been owned by the same company or same family and always run together.

"The boundary was realigned when it was decided to sell them separately and Kimberley Downs gained more than what Napier did."

Peter said cattle numbers on Napier were about where they should be in terms of carrying capacity.

"There are all sorts of figures going around in terms of what carrying capacity should be for stations," he said.

"You have potential carrying capacity, current carrying capacity and estimated carrying capacity.

"I am fairly well aware of all these having been on the Pastoral Lands Board for five years but I am also aware there is a fair bit of misunderstanding about what carrying capacity could entail.

"Essentially, the carrying capacity is only a guide, the condition of the rangeland is what is important. True, it is used for valuation purposes and is used as a fall back if the rangeland is deteriorating, but the key to a property sustaining a relatively large herd is the level of improvements to keep the cattle scattered over the country rather than flogging out the preferred country.

"Put it this way, you can carry more cattle if you have got improvements than if you haven't got improvements.

"But having said all that, the numbers on Napier now are fairly well aligned with its potential carrying capacity."

Another focus for Peter when he took over was to introduce Red Brahman bulls.

"I bought Red Brahmans from the outset and we now have a predominantly red herd," he said.

"There are the odd grey Brahmans that still come through and we don't cull them just because they are grey, but mostly it is all reds now."

He said there was no technical reason for going red; it was more a personal preference.

"I like the red cattle and I think they are acceptable to more markets," he said.

"The Indonesian market tends to like the greys but given the issues with that market at the moment having red cattle isn't a bad thing. Not that I could see into the future 20 years ago when I went red!

"Even though there is still resistance to Brahman cattle in southern markets, red cattle are probably more acceptable."

Peter buys 60 bulls a year from Queensland and for the last seven to eight years most of them have come from the Kandoona stud, Injune.

While there has been a lot of talk about the Indonesian market following the ban on trade last year, Peter is quite circumspect when asked what his break-even price for cattle would be.

"I don't do the figures," he said.

"If my account is in credit then I must be making money, if it is in debt then I must be losing money.

"I honestly don't study those figures that thoroughly.

"I could have a guess but it is all to do with numbers. The break-even point for me may be quite different to the break-even point of station A or B.

"It depends on operating costs and cattle numbers I think.

"I wouldn't like to say that if we got under $1.80 a kilogram we are all going to start going broke or at $1.40 we are going broke but one thing I can say is that with the amount of money we have tied up we should be getting more. And, even though marketing of cattle is a bit challenging at the moment and costs are forever going up, I am not going broke, just yet!

"From an economic point of view it depends how you look at it as well.

"If I came along today and paid $20 million for Napier Downs I would need to be making a lot more from my cattle than what I need now.

"I was able to buy the property when cattle stations weren't worth very much and I was able to build it up with the income from another business and a lot of hard work until it got to the point where it could carry itself.

"So I have operating costs and improvement costs but my finance costs are low."

To an outsider it may look like one of the best seasons ever in the Kimberley with an abundance of feed and cattle that are literally shining with condition.

But Peter said it was probably just a slightly better than average year.

"It is, however, probably one of the better ones we have had in recent years," he said.

"This year looked a bit dicky when we didn't get any rain in January and most of February but then we got rain towards the end of February into March which helped."

In terms of the future of cattle production in the Kimberley, Peter is a big believer in the potential of the area.

He says while there are a few challenges at the moment, there are plenty of positives also.

"With Asia on our doorstep and the Middle East market there has to be potential here," he said.

"Asia has a growing population and they want to eat beef. While the import quotas are dropping I cannot see how that will last.

"Asian people will surely not want to pay too much for their beef and we are a close, cheap source of protein for them."


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