A mini property boom is emerging as beef producers in parched inland and northern areas of Queensland opt to ‘buy grass’, as an option over scarce agistment, feedlot placement or sale of valuable breeding stock.

Part of the stimulus for the process this year has come from the marked seasonal contrast that has emerged between northern and western grazing country – roughly west of a line from Roma to Emerald – and those areas closer to the coast that have in some cases had a bumper summer grass-growing season.

Herron Todd White Townsville land valuer Roger Hill has monitored the recent rise in buyer inquiry for well-grassed, lightly-stocked cattle properties from producers in dry areas that missed out badly on summer rain this year.

“The people who appear most likely to give the land purchase option serious consideration are those who really feel the need to ‘preserve their ovaries’ – their core breeding herd – rather than trying to buy back into the market later at much higher breeder prices,” Mr Hill said.

The ‘grass buying’  trend was last seen in Queensland in 2007, when there was a frenzy of property-buying activity for similar reasons, during a dry period across northern and central parts of the State.

While the cattle market and the level of producer confidence was a lot healthier back then than it is now, Mr Hill said the current demand trend was growing in strength.

Even though the dollars-per-beast for many producers in dry areas this year had been well down, many had recorded high cash flow because of the sheer number of dry cattle being sold, he said.

That might put more people than would otherwise be expected into a position to consider the land purchase option.

Buying interest has focussed on districts that received good earlier rain, especially around Springsure, Nebo, Blackall and parts of the Longreach district. However interest was also being shown in areas much further north, where rain had also fallen.

“There are four or five blocks in the Croydon/Georgetown/Aramac region on the market at present, including Langlovale and Prestwood, and Stirling/Lotus Vale at Normanton. Much of the inquiry being received for those properties has been driven by the hunt for grass,” Mr Hill said.

Townsville-based agri-banker, Brad Castle, North Queensland district manager for Suncorp, has also noted some client interest in the ‘buying grass’ scenario, especially as they eliminate other options.

 “We’re at that stage now where the well-finished cattle from dry properties have been marketed, or are about to be;  killing space is very tight; agistment is scarce; feedlots are full; and moving cattle to other properties within a business enterprise has already happened, where it can,” Mr Castle said.

“Some producers are now at the point of considering whether it is worth buying another place, in an area which has had good summer rain. For those Queensland producers who do have good feed, it is probably an opportunity to market a property, particularly if it is only lightly stocked, or sold bare,” he said.

In some cases vendors who tried unsuccessfully to sell properties earlier, have now re-listed them, with greater emphasis on the quantity of feed on offer as a selling point.

“In my opinion, this trend is not going to be as big as the last 2007 run on buying properties for grass, because this time there just isn’t as many people with the financial capacity to go out and buy another place,” Mr Castle said.

“In 2007 there was a lot of sales in a short period. At this point, the activity is still a long way from that, but it’s growing.”

While property values had certainly declined since the 2007 sales surge, that in itself was not really a stimulus for the current property interest, Mr Castle said.

“It’s more of a case of the lesser of two evils. They are not really in the mood to buy a second property, but drought-impacted producers are thinking if they sell all these cattle, they may take a huge hit in the current market – and it may be expensive to buy back in when conditions improve.

“But if they buy a well-grassed place and even pay a small premium for the grass on it, they figure they are still going to have a place to trade-on, when the conditions turn around.”

Mr Castle said he knew of a number of deals that had already been done, and expected to see more.

While much of the interest was focussing on Central Queensland, there were still places further west and north that had received good earlier storm rain, and had good bodies of feed.

In contrast, any properties with limited or no feed on them remained almost unsaleable at present.

Ten sales, contracts in Longreach region   

Topex Longreach agent Tom McLeish said at least ten properties in his general district had either sold recently, or were under contract, as cattlemen from drought-impacted areas sought to buy well-grassed land to get them out of trouble.

The focus in his region was on places where rain had fallen earlier – west to Winton, east to Muttaburra and Aramac and south to Barcaldine and Isisford.

Recent sales and contracts based around ‘grass purchases’ included:

• Hillview, near Muttaburra – settled a fortnight ago for $115/ac bare of stock to a Kynuna buyer
• Myrtle Farms, near Aramac – under contract for $100/ac bare to a McKinlay buyer
• Wakefield, near Isisford – earlier received 18 inches of rain and is currently under contract to a Winton buyer.

A similar process is occurring further east, with producers in very dry areas around Charters Towers and Hughenden also recently buying properties for grass. A Charters Towers cattleman recently paid $5.1 million for well-grassed Plataway Station near Nebo, representing a value of around $350/ac (no stock included); and a Hughenden grazing family bought a block near Blackall for around $200/ac.

Further south, the trend is not yet as strong, but showing signs of emerging.

Topex Roma property specialist Tony Gillett said buyer interest from dry areas further north was starting to be seen.

The first sign was a well-grassed property called Beilberanga near Condamine, which settled to a buyer from Winton four or five weeks ago.

“But I’ve had interest recently from people around Winton, Julia Creek, Hughenden – anywhere that missed out on rain,” Mr Gillett said.

“The limiting factor this far south may be distance – not so much the distance to transport relocated stock, but the distance involved in managing them remotely.”

“Those grass buyers appear to be picking-off the grassed property opportunities closer to home first, but that is likely to change as closer properties with feed start to reduce in number,” he said.

“One of the upsides in making a purchase this far south is that the cattle are then closer to more marketing options with feedlots, processors and restockers.”

Mr Gillett said it appeared that grass buyers’ considerations today were “less about the capital improvements and property location, and more about how much feed a place has on it.”