Australia’s first large-scale, purpose-built feedlot celebrated 50 years of operations today.

JBS Australia’s 25,000 head Beef City yard near Toowoomba has stood the test of time, surviving beef slumps, grain shortages and global recessions to deliver an estimated 1.3 million tonnes of high quality grainfed beef to customers worldwide since the yard commenced operations in September, 1974.

A gathering of staff, past and present, industry representatives, goods and service providers and others was held at the yard today to mark the occasion.

Beef City’s first general manager, Rod Hadwen, provided his colourful recollections of the yard’s earliest origins.

More reports from today’s 50 year anniversary gathering on Monday. See photos from today’s event at bottom of page.

• Set out below is a summary of the history of the Beef City feedlot and abattoir, written by Beef Central’s Jon Condon for the feedlot industry history “Grainfed: the history of the Australian lotfeeding industry.”

Black steers on feed at the JBS Beef City yard near Toowoomba

THE traditional stock agency business in Australia started to get tougher in the late 1960s and early 70s, and Elders Smith Goldsborough Mort (the predecessor of today’s Elders business) started looking at ways it could expand its business into other areas to enhance its bottom line.

To make matters worse, a credit squeeze occurred during 1972, which meant the company and its clients were paying 20 percent interest for access to money.

Around this time, the Elders (ESGM) board reached the conclusion that it should invest in lotfeeding operations, which by that time were starting to gain momentum in Queensland, NSW and Victoria. It was seen, potentially, as a means of value-adding the traditional agency business, extending through the supply chain and providing an essential part of the ongoing profitability of the broader cattle sector.

“Elders was not an abattoir or feedlot proprietor at the time, and it became obvious the company needed to partner with somebody with specialist expertise in these fields, to make the broader project work,” former Beef City managing director John Moore recalled during an interview for this book in 2011.

“We (Elders) understood a fair bit about the cattle industry, but very little further down the grainfed beef production chain.”

In looking for companies with which Elders could form an alliance, an inspection visit was made to Fat City feedlot, a 50,000 head US feedlot located at Salinas, California where a relationship was struck with the owners.

A chance meeting at Sydney’s swanky Menzies Hotel saw a second connection made with Frenchman Louis Lasserey, a senior executive in global investment, commodity trading and shipping firm Louis Dreyfus, who had come to Australia looking for investment opportunities in agriculture. Louis Dreyfus already had well-established investments in agriculture, shipping and commodities in more than 50 countries worldwide.

A joint venture was struck between Elders, the owners of Fat City, led by chairman, Jim Marks, and Louis Dreyfus. Despite rumours to the contrary at the time, Elders always retained a controlling interest.

The business kept its affairs extremely private during its early stages, perhaps helping arouse local suspicions that the venture represented a US or overseas ‘takeover’ of Australian farming/cattle assets. That took some considerable time to dissipate.

The marriage brought together the local cattle knowledge and connections of Elders; the finance, international marketing and grain procurement clout of Louis Dreyfus; and the feedlot and processing operations knowledge of Fat City.

Fat City was a little different from many US feedlot operations in that era, putting strong emphasis on managing cattle on feed for investors, with a lot of the funding tied closely to the US Cattle Futures market. Such investments were tax deductable in the US, and the attractive tax-minimisation opportunity was widely known in the US as ‘the Red Steer.’

Beef City Pty Ltd was formed as a subsidiary company, and plans were put together to build a feedlot of unprecedented proportions in Australia, supported by an adjacent boutique scale export  processing plant to service the grainfed kill, by simply walking cattle ‘across the road’ from the pens to slaughter.

An extensive site search took place, and ultimately a location was chosen at Aubigny, west of Toowoomba, including a large surrounding 1000ha dryland and irrigated farm operation.

Construction started in 1973, and the feedlot facility was opened in September, 1974, under the general management of Elders senior livestock employee Rod Hadwen (later to become an ALFA chairman). The abattoir and boning room followed soon after.

All of the larger feedlots in Australia to that point had simply evolved from much smaller enterprises, and Beef City was arguably the first to be built to a large scale from day-one. Its capacity grew in several stages to 26,500 head (measured in today’s SCU terms), making it easily the largest feedlot in Australia, when it was constructed.

By any standards, Beef City became a landmark investment in the Australian beef industry. The eight colossal cement grain storage silos, alone, holding an enormous 25,000 tonnes of grain, represented a major construction project, and became easily the largest privately-owned grain storage facility in Australia. The silo storage continues to dominate the Beef City skyline to this day.

Access to the colossal grain storage meant Beef City could buy grain when the price was right, for future use, providing some hedging against price movements.

John Moore’s recollections of the investment figure in the project were somewhat vague, given that the events occurred 50 years ago, but he suspected it was about $20 million – an enormous sum for any agricultural investment in that era.

He said the main principal behind integration was not only about convenience and cost saving (in not having to transport cattle to processing), but quality improvement, in reducing bruising and animal stressors.

Beef City took many of its cues from the Fat City operations in the US, including being flexible in whether it owned the cattle on feed, or not. Some pen space was let on a virtually permanent basis, for example, to large cattle producers like Wallace Logan, who supplied the cattle from his Gulf properties and paid Beef City a fee to feed them, before negotiating a sale price for the finished cattle.

From its earliest days, Beef City’s production was focussed mainly on export markets, principally Japan and the US, with Elders taking a key role in marketing product through its Trading Division.

Japanese staff were employed to help implement boning room cutting lines and other techniques to suit specific customer country requirements.

Up to five or six Fat City feedlot and abattoir staff were also stationed at Beef City at any one time in the early stages, in advisory roles.

The site included one of the first steamflaking facilities installed in any Australian feedlot, and considerable emphasis was placed on nutrition advice through the Fat City staff.

The abattoir was equally innovative, including the first use of moving conveyor belt systems in the boning room.

With the onset of the Beef Slump in 1974, the original joint venture did not last more than two or three years, however, with Elders buying out Louis Dreyfus and the Fat City group to take overall control of Beef City, becoming a wholly-owned subsidiary.

The timing of the establishment of Beef City could hardly have been worse, with the arrival of the Beef Slump taking hold within 12 months of launch. The feedlot was closed for a period during the worst of the depression from 1976.

When it re-opened, however, because of its grainfed origins (mostly 100-day or mid-fed 150-250 days) and the high standard of the integrated processing facility, Beef City branded beef quickly established a strong reputation internationally for its quality and consistency. Some of the beef industry’s earliest large-scale brands, such as the ‘Your Choice’ midfed and ‘Beef City Black’ programs were launched.

Beef City today is owned and operated by JBS Australia, a division of Brazilian giant JBS. The business remains one of only two integrated feedlot/processing systems in Australia – the other being Riverina Beef (formerly Rockdale), previously owned by Japan’s Itoham, but now also owned and operated by JBS.

Botulism episode left an indelible mark

Along with the heat stress-related mortalities sustained at Whyalla and other Queensland feedlots in 1991, one of the saddest episodes in the grainfed beef industry’s history came a year earlier when Beef City feedlot suffered a botulism poisoning episode on an unprecedented scale.

About 5000 head of cattle died in 1990 as a direct result of the incident, which was fundamentally due to a commodity supplier either cutting corners to save costs, or failing to follow clearly-defined procedures.

As it was in lotfeeding areas all around the world, chicken shed litter was at the time a commonly used ration ingredient among some Australian feedlots, and Beef City had a supply contract with a large poultry operation near Brisbane.

Under the contract, the material was supposed to be heat-treated to a certain temperature and time-period, using a batch-cooker, to sterilise the material, killing any botulism spores that might be present, and negating any risk of poisoning.

For whatever reason, two loads of material to Beef City and another feedlot near Bowenville were either inadequately heat treated, or not treated at all.

Cattle quickly started to die after the material was mixed in rations and fed, and by the time a diagnosis was made and the source found, some 5000 head had been lost.

The episode itself had nothing to do with the management of the cattle or the feedlot’s own performance or procedures, but left an indelible mark on staff working at the feedlot at this tragically sad and difficult time. Nevertheless they knuckled down to the task at hand with great professionalism, spending days removing carcases from pens and disposing of them in vast pits.

It was probably the closest the Australian cattle industry has come to the images projected from the UK’s Foot & Mouth Disease episode of 2007, where hundreds of thousands of cattle were put down and buried in pits.

Despite an initial media coverage explosion following the episode, it died down quickly, and Beef City itself suffered no lasting issues with customers, either domestic or international.

Fortunately Beef City was fully-insured, and took the supplier of the contaminated material to court. The company reached an out of court settlement, paying for the losses in full.

One of the permanent outcomes of the event was that chicken litter could no longer be fed to ruminants, a legislative requirement that was consequently implemented in all Australian states and territories.

Beef City’s original general manager Rod Hadwen with current feedlot manager Sean Sturgess and 40-year staffmember, George Byers, one of the livestock team

JBS Australia chief executive officer Brent Eastwood addresses today’s 50th anniversary gathering

The first intake of cattle into the Beef City yard 50 years ago were Herefords bred by Bill Copeland near Taroom