Bindaree’s Myola feedlot near North Star n Northern NSW

VERTICALLY-integrated beef producer Bindaree Food Group is about to launch a plan to sell and lease back its large Myola feedlot in Northern NSW.

The sale process will be conducted through Miles Advisory Partners in Sydney, with advertisements to appear shortly in the national financial press, targeting institutional and other buyers.

The sale process follows an unprecedented sequence of commercial feedlot sales across Eastern Australia since October, often at prices that took many by surprise. Recent sales included Rangers Valley, Yarranbrook, Killara and Pinegrove. Other large yards placed on the market but yet to transact include Grassdale, Smithfield and Vandyke.

A trend is emerging in the feedlot ownership/operation space, towards owners selling their feedlot assets to passive investors to free-up capital, while continuing to operate the assets as a lessee.

Following its lead in the United States where JBS sold its feedlot assets to an investment fund, but continues to lease and operate the assets under the Five Rivers flag, JBS did the same in Australia, selling its assets to Rural Funds Group, a listed agricultural diversified trust.

Another US beef giant, Cargill, has also sold and leased-back its extensive US feedlot assets.

Institutional investors have been widely tipped as potential buyers of the enormous Grassdale feedlot near Dalby, which if it occurred, would likely lead to a lease deal with an established grainfed supply chain.

Other Australian grainfed producers like Allied Beef operate under different models, with institutional investor Laguna Bay making direct investment in Allied, rather than buying and leasing back the company’s feedlot assets. Allied’s yards include the recently-purchased Yarranbrook feedlot near Inglewood on the Qld/NSW border, Gunyerwarildi near Warialda NSW and Vandyke, Springsure Qld (currently involved in a sale process, as described above).

Myola proposal targets expansion

Bindaree’s Myola feedlot near North Star in northern NSW is currently built to an operating capacity of 20,000 head, but carries a license for 35,000 head. A condition of the sale and leaseback process will be that the new owner develops the yard to its full capacity. Bindaree is likely to seek a 15-year lease.

“As Bindaree continues to grow, this transaction allows us to direct further investment into other parts of the business while also bringing in a partner to expand Myola which increases our cattle on feed and strengthens our supply chain,” Bindaree Foods Group managing director Andrew McDonald told Beef Central.

Bindaree has discussed the prospect of expanding the yard since at least 2023 (see earlier report), but since the early 2020s, feedlot construction costs have spiralled higher.

The Inverell, NSW based processor purchased Myola in 2015 from original developers, the Mulligan family, who built the facility as an extension of their grain farming business in 1993.

Bindaree owns all the cattle on feed, with mostly 100-day programs for its own commercial beef brands – including an Angus program, an HGP-free program and others. Prior to Bindaree purchasing the yard, Myola was one of the largest providers of custom-feeding services in NSW.

Myola is situated in the ‘Golden Triangle’ region of Northern NSW, with 95pc of its grain requirements in normal years coming from within 100km of the feedlot. Most of the cottonseed comes from Moree 80km away, while Myola’s surrounding 800ha farm grows all its own silage and most of its own hay.

The feedlot has always used steamflaking for grain processing, with investment in milling infrastructure already underway, but requiring further investment to complete the yard expansion.

The yard provides shade across 100pc of its pens, in line with industry best practise.

• See this profile on Bindaree’s Myola yard from Beef Central’s earlier Top 25 Lotfeeders report