Wellard eyes northern properties

08 Feb, 2010 09:41 AM
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MAJOR live exporter and shipping owner Wellard has confirmed its interest in land acquisitions in northern Australia, but says these would not be used for breeding purposes under any significant move into vertically integrated cattle supply.

Responding to rumours circulating recently in property circles, the company confirmed that among other prospects, it had examined some of the North Australian grazing land assets currently being offloaded by NT cattleman, Stirling Buntine.

"But we're not in the business of breeding our own cattle to put on our own live export boats," Wellard managing director Steve Meerwald said. "Exporting 300,000 cattle a year, we're hardly likely to buy enough breeding country to make a sizeable impression on that."

Instead, any move into northern land purchase would be designed primarily to smooth out the company's live export supply chain.

"We certainly have an interest in acquiring some properties that are compatible with our supply chain process. That might provide the opportunity to have greater control over backgrounding operations, and depoting of cattle for live export from northern ports like Townsville, Wyndham, Broome and Darwin."

Ideally, such properties would need to be in a logical, convenient position in terms of the supply line from cattle sourcing areas to the ports.

"We have nothing fixed in mind, but are simply looking at prospects as they come up," Mr Meerwald said.

The ultimate aim was to secure cattle supply during the northern wet season when access to stock was difficult.

With the growth in live export business out of northern Australia, Wellard now requires between 20,000 and 30,000 cattle each month for export, and demand from Indonesian importers is now much less seasonal than it once was.

"The Indonesian industry now requires those cattle virtually month in, month out. They can no longer cope with a shortage of supply over the wet season, and historically, the Australian export industry has had a shut-down phase over that time of year."

"But the industry has got bigger than that," Mr Meerwald said. "It's important for our feedlot customers that they do not have a major run-down of their cattle inventory over the wet season months, because that disrupts their production program going forward."

Identifying and purchasing some northern properties that were suitably located, provided all-weather access to port, and which had the capacity to act as a collection point for bigger numbers for supply during the wet season would help overcome that supply issue, Wellard says.

Currently that challenge is met, in part, by the use of leased NT floodplain country, where cattle are pooled earlier in the year for later consignment.

Another strategy is to supply cattle from further southwest in WA during the northern monsoon period.

There were now far more suitable Bos Indicus type cattle in the state's southerly regions than there was a few years ago, Mr Meerwald said.

"But we're also looking at additional strategies that would be complementary to those numbers, as our business grows." he said.

Any purchased properties could also be used for educating cattle to bunk-feed, perform vaccination programs and other pre-induction work which could improve performance in the Indonesian feedlots.

Currently Wellard leases several smaller properties near Townsville servicing the pre-export phase ? one an accredited live export depot, and another between Townsville and Charters Towers, which currently supports a large hay-growing operation for fodder supply onto departing live export boats.

During January, Wellard Agri completed the purchase of extensive Geraldton district grazing and farming property, The Grange, which last chan-ged hands in 2006 for a price reportedly between $20m and $30m. As well as grain production, the property could play a role in backgrounding of cattle for export through the Geraldton port.

Wellard already has a large portfolio of grain farming and grazing properties in WA's wheat/sheep belt. Many of these are not directly related to live export, but are stand-alone farming/grazing enterprises. The company late last year took off 32,000t of wheat in its first harvest from recently acquired properties around Kojonup and elsewhere.

In combination, Wellard currently has about 30,000 sheep plus some cattle on its books on WA properties, but was not totally wedded to sending those stock into live export.

"If we can get more money from a meatworks or lotfeeder buyer, for example, we would not hesitate in selling those animals that way," Mr Meerwald said.

While Wellard in the past had had a couple of 'little cracks' at feeding its own cattle in Indonesian feedlots on a contract basis, there were no long-term plans - at this stage at least - to move into retained cattle ownership or feedlot infrastructure investment in the Indonesian trade.

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