GINA Rinehart’s grand vision for her rapidly expanding Australian beef cattle operations took further shape yesterday when the first product bearing her new commercial beef brand was despatched for export to a customer in China.
A short ceremony was held yesterday at the John Dee export beef processing plant near Warwick, in southern Queensland, where Wagyu product in cartons bearing Ms Rinehart’s new ‘2GR’ Fullblood Wagyu brand were loaded for shipment.
John Dee is providing a service kill for Ms Rinehart’s premium beef program, based on Hancock Pastoral’s fullblood Wagyu cattle bred on an aggregation of properties around Dubbo in NSW, and fed at specialist Wagyu feeder, Geoff Willett’s Maydan feedlot near Warwick.
Australia’s richest woman, Ms Rinehart’s new-found interest in beef really only started to take shape two years ago, with a series of large investments since then in beef cattle production assets stretching from central NSW to WA’s remote northwest, as well as the Northern Territory, and Queensland. In addition to production assets purchased in her own right, she last year completed a deal with Chinese partner Shanghai Cred to take a controlling interest in S. Kidman & Co.
Senior Hancock personnel including directors, together with operational staff and others involved in the company’s fledgling Wagyu beef supply chain were in attendance at yesterday’s launch.
The first consignment has gone to importer/distributor Quality Foods China, represented at yesterday’s launch by Mark Dyson, who has traded a range of commodities in China for 20-odd years.
The product will end up with a range of restaurant and hotel food service customers in Shanghai and Beijing, Beef Central was told. Quality Foods China, which has been trading in Wagyu beef for a couple of years, has established business in food service and retail in China, as well as some online retail sales.
Significantly, because of its diverse customer base, the agreement with Quality Foods China is for ‘natural fall,’ meaning Hancock is not left with bits and pieces of the carcase to try to place into other markets, greatly simplifying the early stages of the project.
“The launch of 2GR will being some of Australia’s finest quality Wagyu beef to customers in Australia, and around the world,” Ms Rinehart told yesterday’s launch gathering.
“We hope that this inaugural shipment will be the first of many in decades to come,” she said.
At this stage Hancock plans one shipment a month to China, gradually building up volumes as its supply chain capacity grows. Korea, Japan and domestic markets will also come into play, as production capacity grows, Beef Central was told.
Current numbers on feed at Maydan feedlot are around 900 head, but that will grow as three-weekly intakes of 80 head start to occupy more space in the yard.
Beef Central has confirmed that the Hancock Prospecting fullblood cattle numbers have already reached 8000 head, a figure which does not include the company’s Wagyu x Angus F1 breeding programs in Queensland’s South Burnett region. Hancock hopes to build its Fullblood breeder numbers to around 5000 head, to provide a regular supply for the brand program’s requirements.
John Dee general manager Warren Stiff told yesterday’s gathering that the first kill under the new arrangement, involving 50 head, had taken place on Wednesday last week, making up a full 20-foot container load.
“The company looked forward to working with Hancock in its Wagyu brand program for the long term future, which would enhance the throughput of the John Dee facility,” he said.
John Dee director John Hart told Beef Central a Wagyu service kill for Hancock was a good fit for the company’s operations, which focus heavily on high-quality beef processing rather than the commodity end of the business. Almost all of John Dee’s throughput is grainfed, either packed under its own export beef brands, or for other service kill customers including Rangers Valley, Stockyard Beef, the Australian Agricultural Co, and Korean retail giant, Lotte.
Brand’s origins trace back 100 years
Ms Rinehart’s 2GR brand name takes its inspiration from her great grandfather, who founded Ashburton station and in the late 1800s. His brand ‘H3B’ denoting Hancock 3 Brothers, was named after his sons George, John and Richard. After their father died, the brothers continued to run Ashburton Downs station – each brother taking in turns to manage for three years. Georgina (Gina) Rinehart was named after her grandfather, George, and later, Gina’s daughter, Ginia, was named after her mother.
“Today’s 2GR brand, which includes the initials of descendants, my daughter Ginia and me, pays tribute to our family descendants and the historic H3B brand and builds upon their legacy of surviving in remote and difficult conditions, and producing agricultural products,” Ms Rinehart said during yesterday’s launch.
“My family members including me, who descended from this pioneering stock, are delighted to be here today,” Mrs Rinehart said.
While it would normally be highly unusual to freeze premium Wagyu beef like that included in yesterday’s first consignment, the fact the shipment was destined for China, where many cold chains are still a ‘work in progress’ (see Beef Central’s report from last October’s TSBE Access China trade mission), meant that in this case it was frozen before shipment, for easier management after receival.
Further brands likely
Hancock Prospecting’s general manager for cattle operations, Scott Richardson told Beef Central that while the company’s first export consignment to China had comprised frozen beef, the export program would progress to chilled beef over time, once cold chains could be better secured for the product within China.
He said the longer term goal – perhaps by the end of this year – was to have a number of brands in the company stable, starting with the Fullblood Wagyu 2GR program at the top, and possibly including crossbred Wagyu and conventional beef supply.
“But at this stage we see our Fullblood Wagyu program as offering a point of difference in the market, and it’s where we will be applying the primary focus.”
Mr Richardson confirmed that the original shipment consigned yesterday was not connected in any way with Hancock’s Chinese partner in the S. Kidman & Co venture, Shanghai CRED.
“But that’s not to say that further down the track, our JV partner Shanghai CRED may not be interested in buying our Wagyu product,” he said.
Hancock Prospecting’s cattle arm has assembled some of the best Wagyu genetics in Australia, firstly through its acquisition of the elite Greenhills Wagyu herd in 2015, and supplemented last year by another 1500 elite Fullblood breeders bought from prominent fullblood breeder David Blackmore.
Such cattle, longfed for 450+ days at Maydan, are looking for marbling scores on the 7-9+ range, and the cattle had previously averaged 7.5 when sold over the hooks into the Jack’s Creek Wagyu brand program.
“We believe we will improve on that, through fine-tuning some of our on-farm practices,” Mr Richardson said.
Although relatively new to the Wagyu industry, he has already drawn the conclusion that the industry needs to move forward in the way it grades fullblood Wagyu carcases.
“The current AusMeat grading system fails to recognise the fineness of marbling as an important trait in these carcases,” he said. “Current grading chips display globules of fat, rather than fine cobweb appearance, which Wagyu breeders are trying to breed into their cattle,” he said.
“The grading system needs finessing, and its one reason why a lot of Wagyu supply chains have gone to in-house, Japanese style grading. The grader’s difference between a marbling score of 5-6, or 7-8 can amount to a thousand dollars or more per body. That pays three-quarters of the feed cost, so it’s important we get the grading right.”
‘Experiments’ with Wagyu genetics in the north
Beef Central asked Mr Richardson whether Hancock Prospecting have any intention, like AA Co, to consider adding some of its Wagyu genetics to its extensive northern cattle operations for F1 production.
At this stage, the answer is a firm ‘no’, but some small, interesting trials are taking place, nonetheless.
“We had 17 Wagyu bulls sent to WA, which have now ended up in the west Kimberley, on Nerrima Station, near Liveringa – but it is only considered an experiment, and certainly won’t be our core business,” he said.
“Station manager Chris Morrow refers to them as ‘desert Wagyu’. They’re being crossed with some nice red breeders, mostly Droughtmaster and Brangus type heifers.”
Elsewhere, Hancock Prospecting ‘inherited’ about 80 Wagyu bulls when the company bought the Riveren-Inverway aggregation in the Victoria River District from Indonesian owner, Santori. Again they were part of a trial only, but progeny may end up in the domestic F1 beef trade, or may in fact go to Indonesia as feeders.
Again, this small project is not part of any pre-meditated attempt to inject Wagyu genetics into the region on any commercial scale, Mr Richardson stressed.
“Our extensive northern cattle interests will be based on traditional Bos Indicus and Bos Taurus cattle out of the north, for either live export or domestic slaughter,” he said.
Asked whether Hancock was likely to share its genetic resource with others in the industry through herd bull sales, he said at this point, genetics would be kept in-house, much the same as as AA Co has done.
“At the end of the day we’re looking at the meat side, rather than selling bulls, so our primary focus in the Wagyu program will be on marbling performance,” he said.
Tomorrow: Is Gina’s new cattle business positioning for downstream investments in vertical integration?