News

Large NSW, Qld feedlot investments for supply chain manager, Allied Beef

Jon Condon, 09/08/2021

TOOWOOMBA-BASED supply chain manager Allied Beef has completed two large investments in commercial feedyards demonstrating a positive commitment to the industry for the long term – one each in New South Wales and Queensland.

The move has come as a logical extension for the Allied Beef business, which for the past decade or more has used custom feeding services or leased entire feedlots for grainfed beef production.

Vandyke managers Tyson and Kirra Kucks in the feedyard recently purchased by Allied Beef

The two acquisitions are Vandyke feedlot near Springsure in Central Queensland, and Gunyerwarildi feedlot near Warialda in northern NSW. No price has been disclosed for either deal, completed privately.

Vandyke feedlot was settled back in May, and Gunyerwarildi feedlot near Warialda in northern NSW has only just been finalised.

Allied Beef managing director James Maclean told Beef Central the move from leasing to ownership of feedlot ‘bricks and mortar’ was about sustainability, and building capacity and efficiency.

“Leasing limited our ability to make improvements in regard to upgrading the facilities we operated to improve productivity and efficiencies, so it was a logical step for us to move into ownership,” Mr Maclean said.

“We’ve been looking at possible investment targets for a number of years, but as always, it’s hard to find ones that tick all the right boxes.”

“Leasing served its purpose in supplying our customers, but it did not give us longevity or security once the lease term came to an end – or the real ability to improve systems and processes,” he said.

“We have been fortunate to secure two great properties with proven performance, which we can now direct some capital investment to lift cattle performance and efficiency,” he said.

Sustainability would also be a focus, through integrating pre-conditioning and finishing plus the use of surrounding cultivation for expanded fodder production.

Key to both projects was access to large adjacent areas of country for backgrounding and pre-conditioning of feeder cattle, offering improved feeding efficiency, from an animal health perspective.

Some of the funding for Allied Beef’s acquisitions has come via a capital raising from an outside domestic Australian investment manager.

The two investments provide a ‘north-south’ feature to the business, potentially helping overcome localised seasonal variation, as well as tapping into two significantly different feeder cattle supply pools. Both yards are large enough to operate efficiently as stand-alone enterprises, instead of being inter-reliant on each other.

Van Dyke’s feeder cattle requirements will basically be supplied from the immediate central Queensland region plus areas north and west, while Gunyerwarildi will be supplied from the immediate northern NSW region, southern Queensland and southern parts of NSW and Victoria.

Allied plans to invest in both sites further, to expand them to licensed capacity. In combination, both yards will have a one-time operating capacity (including backgrounding) of around 35,000 head, and annual turnover of around 60,000 head, ranging from Wagyu to domestic supermarket weights, and mid fed cattle.

The company has started exploring some possibilities with development of its own grainfed branded beef programs, going into selected international markets. Volumes are still small, and very much part of a trial process.

Additionally, to service customer interest, Allied plans to market mixed rations processed at both yards to other beef producers in the respective regions of Central Queensland and northern NSW. Driven by the current boom cattle prices for young cattle, a number of large commercial feedyards in eastern states are now selling mixed rations to outsiders, as more producers adopt supplementary feeding as part of their management approach.

Lease history

Launched in 2007, Allied Beef had its origins as a specialist ‘aggregator’, backgrounder and marketer of young cattle to on-sell to established feedlots.

It later diversified into using custom-feeding and leasing feedlots to produce its own grainfed cattle. More recently, the company has leased the Vandyke feeflot for the past three years, and also leased the Tallawanta feedlot near Moree in northern NSW. The Tallawanta lease agreement came to an end a year ago, which enabled the company to focus on the search for property investment targets.

“We found that after backgrounding and pre-conditioning young cattle properly for better feedlot performance, retained ownership was a better financial outcome than selling well set-up young cattle to third-party feedlot operators,” Mr Maclean said.

Here’s a quick summary of Allied’s recent feedlot purchases:

Vandyke feedlot, Springsure QLD

Allied has purchased the Vandyke feedlot near Springsure after leasing the yard for the past three years.

Vandyke has been on the market, on-and-off, since 2018, and was last actively marketed in June last year, on the instructions of the original developers, the Iker family, who originally fed cattle for a supermarket contract, and more recently, Wagyu.

Sold with about 2500ha of surrounding cropping and backgrounding country, the feedlot has been built to a capacity of around 7000 head, but has a license for about 9500 head (8640 Standard Cattle Units). Current infrastructure includes 36 pens, two hospital pens and cattle yards including separate double deck loading facilities, and drafting and induction facilities.

Allied is installing a new mill and improved tempering capacity as part of the expansion program out to full licensed capacity, having now completed the transition from leasee ‘tenant’ to owner.

The plan is to cultivate about 500ha for silage and hay production, with the balance of country used for backgrounding work.

Vandyke has been used by Allied during the previous lease arrangement to feed a combination of cattle, ranging from some longfed Wagyu F1s sourced mostly out of Central Queensland, as well as domestic weights for a supermarket contract, and some 100-day grainfed export steers.

That will continue under the new ownership, as well as some custom-feeding of 100 day cattle for long-standing clients.

The surrounding country includes 300ha of developed brigalow scrub, 130ha of black soil coolabah grazing country, 540ha of creek flat grazing country and 875ha of light sandy soils to rocky escarpments. The property has a 125 and 30 megalitre irrigation licence. There are permanent waterholes along the Vandyke Creek, as well as a 1000 cubic metre dam.

Current feedlot infrastructure includes nine silos with capacity 1750t, a 130t poly molasses tank, an 80t steel liquid supplement tank, silage pits, a commodities shed, 12t/hour capacity roller mill, weighbridge, generator shed, a hydraulic vet crush and a four-way undercover draft with lights.

Gunyerwarildi feedlot, Warialda

Allied’s second acquisition, Gunyerwarildi feedlot, is located near Warialda east of Moree in northern NSW.

Covering some 6100ha (15,000ac) Gunyerwarildi was developed by Ceres Agriculture, which saw some of its assets go on the market after going into administration in March 2019. Ceres’s other large Moree region asset, the 9300ha Brudle Park grain farming aggregation north of town, was sold in 2019 to Macquarie’s Viridis Ag for around $50 million.

Owned by Twynam Agriculture at one point prior to Ceres’s purchase in 2003, Gunyerwarildi currently holds a 20,000 SCU license (effectively around 23,000 head on feed), but is currently built to a capacity of only around 7000 head, across 70 pens. There is silo storage capacity of 5500 tonnes, multiple sets of cattle yards plus numerous sheds, workshops and housing.

The feedyard yard employs two modern steam flakers, with capacity to process large quantities of grain.

Gunyerwarildi was used by Ceres for its widely-publicised Grain Assist feeding program, using mixed ration from the feedlot commodity shed fed to cattle from self-feeders in the paddocks.

Allied says it has no immediate plans to continue the grain-assist paddock finishing strategy – but will move from the Ceres model back to a more conventional intensive feedlot application, once the yard expansion is completed.

Work will start to expand the yard’s operating capacity out to its full 20,000 SCU licensed capacity over the next couple of years, Allied’s James Maclean told Beef Central.

Backgrounding capacity could grow to up to 5000 head at a time, depending on the intensity of backgrounding operations.

The yard will be used to feed custom fed cattle plus company owned cattle including a combination of F1 Wagyu, as well as 150-200 day mid-fed Angus steers and some lighter supermarket steers and heifers.

Covering some 6100ha (15,000ac) Gunyerwarildi was developed by Ceres Agriculture. The current 7000 head capacity feedlot will be expanded out to 20,000SCU.

Management team

Managers have been appointed at both Allied’s new southern and northern yards.

Stephen Pocock, who worked previously in feedlot and cattle operations management roles with the Australian Agricultural Co and later Consolidated Pastoral Co, started three weeks ago as manager at Gunyerwarildi, while Vandyke is managed by Tyson Kucks, who comes to the position out of a management role with a large intensive dairy business, driven by pivot-based irrigation, near Manilla in Central NSW.

Feeder cattle procurement and marketing for both yards will be overseen by Allied’s general manager livestock, Grant Haddin, supported by the company’s area managers – Warren Hohnke in Toowoomba and Peter Elmes in Augathella.

Allied will continue to assist private clients in marketing their cattle direct to third parties either directly or via online marketing programs. This area of the business has consistently grown through the delivery of a unique marketing approach that maximises client returns.

Allied Beef’s recent investments in yard infrastructure follow a recent trend in capacity expansion across the Australian lotfeeding industry – either in planning stage, under development, or recently completed.

 

  • Lotfeeders will be key targets in an upcoming backgrounding property marketing campaign being launched on Beef Central next week. Colliers International’s Phillip Kelly has coined the term, “Feedlot Central” to describe the offering of the five holdings, located in the Dalby and Condamine districts, totalling about 12,000ha of high quality backgrounding country. The holdings will be sold separately.

 

 

 

 

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