Markets

Did Brinkworth’s epic 2013 cattle deal with AA Co pay off? We ask SA’s enigmatic cattleman

Jon Condon, 30/06/2016
Catching up at the recent AuctionsPlus 30th anniversary in Sydney were from left, Greg Cobiac, Elders Kingston, SA; Tom Brinkworth from Watervalley Station near Kingston; Dennis Scanlon, CALM's original livestock operations manager; and Peter Rollason, Elders AuctionsPlus coordinator.

Catching up at the recent AuctionsPlus 30th anniversary in Sydney were from left, Greg Cobiac, Elders Kingston, SA; Tom Brinkworth from Watervalley Station near Kingston; Dennis Scanlon, CALM’s original livestock operations manager; and Peter Rollason, Elders AuctionsPlus coordinator.

 

ALMOST exactly three years ago, enigmatic South Australian cattleman Tom Brinkworth pulled off one of the larger cattle deals seen in Australia in recent times.

In mid-2013 he bought 18,000 young heifers from the Australian Agricultural Co’s Barkly Tableland properties, and employed contract drovers to push them cross-country back to his grazing holdings in southern NSW.

The arrangement looked like an exceptionally good deal for the buyer at the time, with a big contrast evident in heifer prices between northern and southern Australia. AA Co was carrying a big surplus of heifers after two very good seasons, and only very limited opportunity to sell them in the north, at low prices, due to the lasting impact of the 2011 Indonesian live export market collapse.

The transaction was first discussed in this Beef Central article in June, 2013.

The sale, and particularly the droving exercise to take them south in nine large mobs over nine months, attracted national metropolitan media headlines. While it was breathlessly reported by some metropolitan media as the biggest single cattle transaction ever seen in Australian pastoral history, that was not accurate. Indeed AA Co itself had been involved in larger cattle deals only a few years earlier, distinctly separate from property transactions. The Brinkworth deal was, however, the largest single-vendor, single purchaser cattle sale Elders had ever transacted, where there was no property sale involved.

Under the circumstances, AA Co saw strong prospects for the heifer price to continue to deteriorate over the following 12 months, so the opportunity to offload such a large line of heifers in one hit looked very attractive.

No prices were ever discussed publicly, but rumours suggested the Brinkworth camp paid around $400 a head at the time for the weaner heifers 180-220kg, and about $500 or $550 for some older tail-end heifers weaned late the year before. All prices were delivered Longreach.

ANT Roadtrain ... off to workThe consignment was a combination of AA Co’s softer Barkly composites, with a few Gulf composites among the older heifers.

Sources at the time said the agreed price was ‘considerably better’ than the prevailing Darwin live export market for heifers like those described. At the time crossbred heifers were making 150c/kg, with higher Indicus types 140c, delivered Darwin.

It was widely suggested that the nine-month, 1700km droving exercise back to the intended destinations at Warren and Hay, NSW was going to cost around $200 a head.  The sheer cost of the droving exercise was in fact the deterrent that stopped AA Co doing something similar itself, by shifting the heifers south and selling them once they had arrived nine months later in southern Australia.

The heifers put on some weight during the early stages of their trek south from July/August 2013, with one estimate suggesting they had gained perhaps 30-40kg by the time they reached the Roma district. But seasonal conditions on the stock route then started to turn for the worse, deteriorating badly as they approached their destinations around the Hay/Warren districts in NSW.

Tom Brinkworth reflects on the AA Co deal

From their base at Watervalley near Kingston in SA, Tom Brinkworth and family operate a huge grazing operation stretching across more than 10,000sq km on properties in South Australia and NSW. The business includes about 80,000 cattle and 350,000 sheep.

Beef Central caught up with Mr Brinkworth at the recent AuctionsPlus 30th anniversary event, and asked him how the AA Co deal had ultimately turned out.

He said circumstances dictated that the deal ‘ultimately proved to be OK’, in a financial sense.

“The seasonal conditions deteriorated, the further south they came,” he recalled.

“Conditions were fine when I bought them, but while it started to dry off, I took the punt that it would rain while they were on the stock route. But ultimately I was wrong,” he said.

“It was a gamble – the heifers certainly looked relatively cheap at the time, but there was no way to know how the season in NSW was going to unfold, as they came south. But they’ve proven to be very good cattle. I’ve still quite a lot of them in the breeding herd.”

Big supporter of online sale by description

Mr Brinkworth was arguably one of the pioneer users of livestock sale by description in Australia, back as early as the late 1970s or early 1980s.

“We were running a lot of pigs at the time,” he recalled. “There was a pig sale by description (not electronic, but done via telephone) that dated back to about 1979.”

So what attracted Mr Brinkworth, who keeps a notoriously low industry profile, to choose to attend the recent AuctionsPlus anniversary event in Sydney?

“I’ve always believed in the marketing principles of CALM/AuctionsPlus,” he said.

He predicted that there would be major changes in the way cattle are transacted over the next five years, using sale by description.

“At the moment there is disquiet in the physical auction (saleyard) system. There has been forever, because when there’s an oversupply of stock you can get three buyers turn up at the yards, and they have a field day. And the suggestion of collusion never seems to go away.”

“But with modern technology now at our disposal, all that has to happen is for all the major weekly physical sales to offer a full description of sale animals – pre-sale weights, teeth, genetics – and a cameraman follows the sale, live, to allow outside buyers to log in and compete, and with confidence.”

“I think physical sales and online sale by description will blend into one. I think it will happen within five years. All the tools are there,” Mr Brinkworth said. “It’s only a matter of time…”

He felt new AuctionsPlus innovations like the buyer ‘star-rating’ of assessor performance would only reinforce that move.

The Elders Kingston branch, through which Mr Brinkworth often trades, has in past years won the AuctionsPlus annual award for largest volume of sheep and cattle traded over a yearly cycle on the online marketing platform.

 

 

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Comments

  1. Dennis Scanlon, 27/08/2020

    Rest in Peace, Tom – you did it well Mate.

  2. Michael J. Vail, 30/06/2016

    Whilst the exercise was splendid in both scale and audacious risk taking, it was Mr, Bill Little and his Team that made it possible; and with good delivery too, despite the travails of the journey.

    It made this cattleman glad …

    Well done, Bill!

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