Property

Paraway’s $13m Condamine acquisition will play key backgrounding role

Jon Condon, 17/07/2018

At 5500ha, Moira Runda had the added attraction of greater scale in a tightly held location

 

A SIGNIFICANT grazing property purchase on Queensland’s western Darling Downs earlier this month will play an important backgrounding role for new owner Paraway Pastoral Co, for company cattle heading to nearby feedlots.

The diversified pastoral company secured heavily-improved 5300ha Condamine grazing property Moira Runda after it was passed in by marketing agents Ray White at auction for $13 million in Brisbane recently.

While no final sale price was disclosed, the passed-in figure represented a value of about $2500/ha, but that included about 500ha of lease country which carried a considerably lesser value.

Paraway operates an increasingly well-integrated network of beef, sheep and cropping properties across three main geographic zones in the northern, central and southern parts of eastern Australia. Its beef herd currently numbers about 200,000 head, with a sheep flock of around 240,000 head.

Jock Whittle

Paraway chief executive Jock Whittle said the company had been looking for ‘quite a number of years’ for a larger-scale backgrounding/finishing property in the western Darling Downs region. Moira Runda had particular attraction given its location and large size, by local district standards.

The purchase was consistent with Paraway’s objective of building livestock finishing capability, and represented a new geographic zone for company operations.

Mr Whittle said Moira Runda could be used for two purposes in the livestock supply chain: either taking Angus or Wagyu x Angus F1 cattle from Paraway’s three large growing properties in northern NSW, or accepting young flatback crossbred cattle from its Queensland Channel country properties, Davenport Downs and Tanbar, or far northern breeding properties like Clonagh and Rocklands.

“It could work either way, depending on local seasonal and other circumstances,” Mr Whittle said.

“The purchase is really about better positioning ourselves as being a differentiated and quality supplier for our Queensland feedlot customers, in particular,” he said.

Paraway’s Channel Country properties have historically served as bullock depots, but increasingly, the company saw their role as being more flexible – either supplying feeder cattle or grassfed bullocks (or a combination of both), as the seasons dictate.

While uplifts of finished grassfed slaughter bullocks from the Channel Country properties tended to be big lines of cattle, removing cattle at a younger age for feedlot placement tended to require much tighter weightrange tolerances and smaller, but more frequent uploads.

“We see Moira Runda as being a good asset to help provide a ‘buffer’ between the larger Channel Country blocks and our nearby feedlot customers, allowing us to sort cattle more by breed type and weight,” Mr Whittle said.

Most of Paraway’s feedlot customers were within a couple of hundred kilometres of the property – either in southeast Queensland or northern NSW – and they tended to want cattle in convenient lot sizes of 200 to 250 head to align with feedlot pen sizes.

“If we bring 3000 backgrounder cattle in from the Channel Country properties, for example, we want to be able to leave them at Moira Runda for a while, set them up right, and then move them on. It will become a depot for some ‘short stay’ cattle from other holdings in NSW or Queensland, but will also need to ‘pay its way’, by putting kilos on young cattle in longer stays as seasons allow,” he said.

Mr Whittle said the company felt the best place for backgrounding for such feedlot supply work was just outside the ring that circled the biggest portion of Australia’s lotfeeding capacity, centred on southeast Queensland.

“Buying Moira Runda is equally about responding to market signals, and responding to seasons. We think there will still be times when the market is telling us to take those grower cattle through to slaughter weights on grass in the Channel Country. But at other times – especially when there’s some climatic uncertainty about – the market may be signalling a different pathway for those heavy feeders.”

“Our view about the Channel Country holdings is that we need to have the flexibility to go both ways, and the Moira Runda purchase is about helping deliver that.”

“Davenport and Tanbar will continue to produce grassfed bullocks when the conditions are right – it’s a good, efficient market for us – but we are trying to position ourselves to have the flexibility to service either channel,” Mr Whittle said.

While conditions on Davenport Downs and Tanbar this year ‘weren’t too bad’, they were obviously far better than the challenges currently being experienced in NSW holdings, he said.

The fact Moira Runda had a body of buffel and an oats crop in the ground at time of purchase made it even more attractive under the current seasonal circumstances, but he stressed it was not ‘bought for feed.’

Paraway’s Moira Runda purchase is subject to Foreign Investment Review Board approval, having met the public marketing disclosure requirement. Because Paraway, through owner Macquarie Pastoral Fund, is substantially foreign owned, any land acquisition it makes is subject to FIRB approval.

Strong pre-sale interest

Marketing agent Bruce Douglas from Ray White Rural said Moira Runda attracted 15 pre-auction inspections, and five registered bidders during a well-attended Brisbane auction earlier this month. Interest came from both corporate and private sectors, from across NSW and central and southern Queensland.

In addition to its high level of improvement and quality improved brigalow/belah scrub country, size was an added attraction, with a capacity of around 3000 backgrounders suggested during the marketing phase – depending on how the 1500ha of farming country used for oats and forage sorghum was utilised.

Situated 30 minutes west of Condamine, the property has a double frontage to the Condamine highway, making stock delivery from the west or south, and upload for feedlot delivery further east easier.

 

What’s in a name:

Paraway Pastoral Co’s name has a strong historical connection, being derived from the aboriginal nickname for early northern beef pioneer, Nat Buchanan, who opened up a droving route from the Barkly Tablelands into Queensland. When the company was established by Macquarie Bank in 2007, a suitably iconic name was sought for the new agricultural venture, and with Nat’s pioneering spirit and bold vision as inspiration, ‘Paraway’ was chosen.

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