Cattle on Packhorse Pastoral’s Roma district aggregations

GINA Rinehart’s Hancock Pastoral has confirmed the purchase of two of three premium southern Queensland/Northern NSW grazing properties put to market last December by Packhorse Pastoral Co.

Hancock has secured Packhorse’s 10,029 ha Moolan Downs aggregation southeast of Roma and 8371ha Ottley Station, 50km west of Inverell in northern NSW. No price has been disclosed but its understood the deal, bare of stock, was for a combined price around $80 million.

Hancock is understood to have negotiated for the third Packhorse Pastoral property put to market in December – 8344ha Stuart’s Creek, northwest of Roma – but agreement could not be reached on a price. A deal on Stuart’s Creek with another party, understood to be a large Australian institutional investor, at a price higher than Hancock’s final offer, is said to be close to being finalised.

There was a red-hot rumour doing the rounds over the weekend that the buyer of Stuart’s Creek would be the North Australian Pastoral Co, which owns the adjoining Goldsborough. However NAPCo  chief executive Allan Cooney told Beef Central this morning (Monday) that while NAPCo did carry out an inspection, it “did not have a contract, nor an interest in Stuart’s Creek.”

Here’s a quick summary of the three holdings:

• Moolan Downs aggregation, 10,029ha of country 200km south-east of Roma on Queensland’s western downs was bought by Packhorse in an off-market deal completed in May last year, at a price suggested at the time of around $55 million. The deal included four properties, Moolan Downs, Cressy, Allambee and Old Southwood, three of which were Certified Organic.
• 8371ha Ottley Station, 50km west of Inverell in northern NSW, was bought bare by Packhorse for around $20 million in February last year year.
• The remaining Stuart’s Creek property not purchased by Hancock is 8344ha of country northwest of Roma in the Maranoa region. Packhorse paid $30 million for it in July 2021, including 800 breeders valued at around $3 million.

Beef Central foreshadowed the sale of Packhorse properties to Hancock in this March article summarising Mrs Rinehart’s recent grazing property transactions.

Based on the numbers above, and the suggested sale price for the two properties to Hancock of around $80 million, it appears there has been little if any capital gain since Packhorse acquired the holdings.

Settlement on the two properties takes place early next month.

The Packhorse Pastoral portfolio of blue-ribbon breeding/backgrounding was put together by the late Tom Strachan, who died with his son and pilot in an aircraft accident in August last year.

Before he died the founder and major investor in Packhorse put together a portfolio of three blue-ribbon Southern Queensland and Northern NSW grazing properties over the preceding three years, designed to fit into his regenerative agriculture vision for use as ‘grass motels’ and carbon sequestration assets.

Packhorse Pastoral Co put heavy emphasis on regenerative agriculture management principles in developing the properties.

In May 2021 the cattle property investment manager launched an agri-business fund seeking to raise $300 million in its initial move to combine cattle production with carbon sequestration on a large scale.

The company announced a five-year strategy to acquire $1.5 billion worth of cattle properties within a region stretching west of Coffs Harbour in NSW north to Bundaberg in Queensland.

The three properties currently being dispersed were offered through expressions of interest through CBRE’s David Goodfellow and James Auty, with registered carbon baselines in place and strategies to maximise carbon sequestration and natural capital development over the next 25 years.

The cleared and semi-cleared land on all three properties is currently used for cattle grazing under a ‘grass motel’ agistment agreement with one of Australia’s largest cattle producers.

Collectively, the three properties had been rated to carry about 13,600 Adult Equivalents and in the recent past have been mostly used for growing-out cattle owned by the agistor, which are bred elsewhere but moved to these stations to capitalise on their suitability for cattle growing and finishing.

In addition, all the cleared and semi-cleared grazing land and all the naturally timbered lands are subscribed to profitable carbon sequestration projects, instigated by Packhorse management and designed to provide both responsible environmental outcomes and substantial additional income.

“This is a strategic portfolio of properties with responsible and experienced management in place, which is designed to maximise the use of the expansive grasslands in a reliable rainfall area while capitalising on numerous opportunities for improved carbon sequestration,” CBRE’s David Goodfellow said at the time of the listing.

“Packhorse is a recognised leader in carbon farming initiatives and the environmental initiatives at these stations are well ahead of industry norms, with clearly established carbon baselines and management practices,” he said.

In a statement released after this item was first published, Hancock Agriculture said the purchase of the properties was consistent with the company’s strategy of acquiring first class properties to support growth in its annual turnoff of 2GR-branded Fullblood and purebred Wagyu.

The Moolan Downs and Ottley properties will now be integrated into the Hancock Agriculture portfolio, filling breeding and backgrounding roles fort the expanding Wagyu herd. The new owner intends actioning areas including animal welfare, employee safety, the use of technology and innovation and improvements across the herds.

Hancock Agriculture plans to implement its philosophy on animal welfare noting its mantra that “happy healthy cattle are the best cattle”.

“We continue to drive a change in the culture across the business. Hancock Agriculture have been leaders in this regard,” Mrs Rinehart said.

• Beef Central asked a series of questions about Packhorse’s future plans, but the company chose not to respond at this time.