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Humble beginnings for Kerwee/Stockyard business + VIDEO

by Jon Condon, 01 November 2017
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As part of Kerwee’s 60th anniversary, marking the company’s major feedlot expansion officially unveiled earlier today (see separate story), Beef Central presents a brief history of the lotfeeding company and its export meat trading subsidiary, Stockyard, established by Robin Hart.  

 

KERWEE/STOCKYARD principal Robin Hart’s pathway into the Australian feedlot industry in many ways did not follow the conventional line of simply converting a ‘family farm into a feedlot’.

He spent his early years as a city boy in Brisbane, before taking up a jackarooing position on Sanders Station, owned by Sir William Glasgow, near the Expedition Ranges in Central Queensland.

Robin showed an enthusiasm and aptitude for cattle, so much so that he was appointed station manager in 1955 at the tender age of 20, after his previous boss, Jack Cooper was headhunted to run the nearby Elgin Downs and Twin Hills aggregation for US owners, King Ranch and Swift.

At the death of Sir William, Sanders Station was sold-off, and Robin was offered a career path position with King Ranch. He declined, because he had designs of his own.

The association with King Ranch, however, did give him an early insight into the potential of Santa Gertrudis cattle, which had only recently arrived in Australia via the company’s southern Texas breeding operations.

The small-framed Shorthorn types being run at the time at Elgin Downs were lifted dramatically by the introduction of Santa bulls, and the herd was one of the first in Australia to retain the F1 Santa bull progeny for use as herd bulls. This suggestion came from the master himself, King Ranch principal Bob Kleberg, during a visit to Elgin. The notion of using crossbred bulls was unheard-of in Australia at the time, and set the foundation for later genetic advances in the cattle industry.

In 1957 Robin married Del Langmore, a Jondaryan girl whose family operated the well-known Prospect Shorthorn Stud on the Darling Downs.  Prior to its resumption for the WW1 solder settlement scheme, the extensive property had extended all the way to Bowenville.

Robin and Del settled in the Burnett Valley, where they bought Kerwee, a grazing property near Eidsvold, under the guiding influence of legendary cattleman, Barney Joyce from Eidsvold Station.

They invested in Santa bulls at one of the earliest King Ranch Risdon sales, using them over a line of quality Shorthorn cows out of the Langmores’ herd.

Amagraze era

During this period, Robin’s father, Byrne, who was a well-known Brisbane chartered accountant and company director, became chairman of directors and took up a shareholding in the newly-formed Amagraze, a processing and pastoral company established by former Vesteys management who brought together a group of prominent Australian graziers and English investors as major shareholders.  The company bought and operated properties in northwest Queensland, processing interests at Biloela and Cairns (Queerah) and a boning room in Brisbane.

In 1969, Robin was asked to join the Amagraze board.

A major turning point – one that would shape the direction of the remainder of his business life – came soon afterwards when the company asked him to join Amagraze’s marketing manager on a sales trip to Japan, UK and Europe.

Amagraze was one of the pioneers of Australia’s meat trade into the Japanese market.  A trading group was put together in Japan for the specific purpose of importing Amagraze beef, called Nitchiku (literally translated as ‘Japanese meat men’). Nitchiku quickly grew into the country’s second largest importer during the heavily Government-regulated quota days.

During the Japan marketing visit, it became immediately apparent to Robin that all the domestic beef he saw was intensively fed, and contrasted dramatically with what was being consigned by Amagraze (and others) at the time from Australia. Regardless, the Australian grassfed product was selling well, because of Japan’s lingering protein shortage after the war.

Robin came home with a completely different view of what was required to be a successful supplier into the Japanese market. Here was a group of consumers that viewed beef in the way that others might savour wine: valuing its subtle flavours, tenderness, aroma and meat and fat colour characteristics much more than the typical Australian did at that time.

The Amagraze company itself looked at, but did not proceed with the prospect of establishing its own feedlot near its Biloela abattoir, which is owned and operated today by Teys Australia.

By this point, Robin’s own business interests included Kerwee, his Eidsvold breeding property, and some country at Jondaryan representing Del’s share of her family’s dispersed grazing enterprise, which they called Berwick.

Robin had started lotfeeding cattle at the Berwick property in 1965, opportunity feeding small mobs of up to 200 head to finish for domestic slaughter for local butchers.

Japan exposure stimulates decision to expand

However it was his Japanese marketplace visit experience which provided the catalyst towards investment in lotfeeding on a more serious scale.

“During the late 1960s we sent a considerable number of trial consignments of fed beef, but in hindsight we were still a long way off the mark, having no knowledge of the impact of age, breed type, or feeding period, on the end-product,” Robin said.  “We were sending beef from high growth-rate younger animals that, to us, looked like an ideal product, but of course the Japanese saw it differently.  As a result our high expectations about a price premium were very slow to materialise,” he said.

Amagraze at this point was struggling financially under the burden of excessive growth, insufficient working capital and the seasonal nature of processing cattle in the north.  The business was ultimately taken over by FJ Walker, dissolving the close business relationship that had existed with Nitchiku.

Robin then approached Nitchiku head, Yukiyoshi Hirai, with a proposal to carry on the relationship, albeit at a smaller scale, by putting a grainfed-specific beef supply business together in Australia.

The result, in 1973, was the formation of the Stockyard Meat Packers business, an alliance involving three emerging eastern Darling Downs lotfeeders including Dugald Cameron from Aronui feedlot near Bell, Don Bridgeford from Mungala feedlot near Warra, and the Hart family. Uen Morgan’s Lillyvale feedlot outside Condamine joined the group soon afterwards.

Nitchiku was a 20pc equal partner, with each of the Australian suppliers also holding 20pc of the stock. Former Amagraze senior executive Edgar Sim, who had great trading and carcase utilisation knowledge, later joined the business, and also took an equity position.

The business model was designed to minimise risk, to all parties, by developing ‘back-to-back’ marketing, meaning each consignment was already sold at point of delivery.

Setback during Beef Slump era

Just as the Stockyard business was showing promising early signs of growth, the 1974 beef slump hit, forcing the company to seek markets wherever it could. Differences of opinion started to emerge about how the business should go forward, leading to a division into separate companies: Stockyard Beef (Local trade) Pty Ltd, which ultimately closed down, and the original company, Stockyard Meat Packers, which focused on export.

On the strength of Robin’s dogged determination to focus on prospects in Japan, the Harts bought out the interests of the other shareholders in the Stockyard Meat Packers business.

Stockyard was arguably the first product-linked non-packer exporter working in the trade with Japan, and quickly settled on a strategy of building close and lasting relationships with its end-user customers.  Some within the ‘established meat community hierarchy’ wrote-off Stockyard as a pretender which would not last long in the Japanese market, given its modest scale.

Certainly in its early years, Stockyard went through difficult times while quota was such a controlling influence in Japan, but the hard groundwork in establishing direct end-user contacts bore fruit after Japanese market liberalisation in 1991.

Larger, established brands (or more correctly, carton labels) already had a reputation in the Japanese market.  Robin quickly realised that it was futile to try to compete directly with the larger exporters, instead seeking out niche-scale customers that the larger exporters could not, or did not wish to pursue.

This led Stockyard to a long-lasting relationship with Japan’s Co-operative movement, based on a model where consumers paid a fee to join a Co-op, which sourced product on their shareholders’ behalf based on a strict set of quality and safety criteria.

The Co-op movement in Japan had its foundations in high levels of food safety and traceability, and for this reason Stockyard was one of Australia’s early adopters of individual animal identification and full product traceability, to verify the production health and hygiene management.

The company’s niche market focus has led it increasingly into higher quality grainfed segments, with a strong orientation today on longfed Wagyu, F1 and midfed Angus programs with an emphasis on meat quality and marbling. As trade has become increasingly globalised, the original heavy emphasis on Japanese fullset business has now been replaced with more specialised cuts-based marketing into a range of destinations in North Asia and the Middle East.

To Robin’s lasting credit, it can be argued that nobody in the Australian beef industry has invested more time and effort in engaging with the Japanese customer, in getting to know their culture and manner of doing business.

Through countless visits to the country over the past 44 years he has established and cultivated relationships with leading stakeholders in the Japanese grainfed meat trade that have not only stood his own business in good stead, but also contributed greatly to the betterment of the broader Australian grainfed industry.

  • Robin Hart received an Australia Medal (AM) for services to the Australian beef industry, and was ALFA’s inaugural winner of the Elanco Outstanding Services to the feedlot industry award in 2005.



Reader's Comments


Comment
  • Michael J. Vail November 3, 2017

    A great story … of perseverance and quality.

  • Vicki Hawkins September 5, 2018

    This completes so many parts of the story I remember as a young child growing up. My father, Douglas Cronin, worked as a shipping manager for Amagraze at the Fortitude Valley office throughout the sixties and after the takeover by Walkers. I remember him bringing some Japanese clients home one night for drinks but some of the biggest challenges were dealing with striking waterside workers and getting containers away on ships during their limited time in port. Ironically I’m part owner in our Central Queensland family, cattle property producing beef for the EU market. It’a difficult to stay competitive. The cattle dogs and drone now muster cooperatively. Knowledge is everything and drought keeps everything real, just like in the 60’s. Thanks for a great article.

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