Editor’s note: Every now and again, its worth looking into what the cattle property market is doing overseas. Here’s a recent extraordinary listing in Paraguay, South America, that’s somehow ended up in Beef Central’s inbox…..

 

A 44,000ha grassfed beef operation running cattle at stocking densities close to a beast to the hectare has been put on the market in Paraguay, with an asking price of more than $US$90 million.

As the image above shows (click on photo for a larger view), the asset has some highly unusual characteristics, by Australian extensive beef industry conventions.

It is divided into a vast network of 547 small cell grazing paddocks, each with its own shelter belt, watering points and shaded access lanes.

The un-named freehold property running 46,000 head of cattle is located in Paraguay’s Gran Chaco region, considered a premium beef producing location.

“We are expecting strong interest from institutional investors demanding agricultural assets in the greater than US$90m market segment,” marketing agents, UK-based Brown & Co said.

“We believe $1500/ha and 160kg beef production per hectare per annum to be globally competitive, and attractive to those in large-scale beef supply chains,” the company said.

There are no less than 30 houses for staff and management on the property. If nothing else, this serves to highlight the vast difference in labour access between Australia’s beef industry and that in parts of South America.

The property’s marketing commentary highlights the high levels of investment made in development since the asset was purchased by its current owners in 2008.

“The business has developed into one of the premier beef operations of its kind in Paraguay,” the marketing agents said.

“The chance exists for a range of interested parties to engage, from food security interests to institutional investors to carbon/biodiversity interests,” Brown & Co said.

Carrying capacity has continually improved and current stock numbers (both on the main holding and leased land) are currently around 46,000 head of predominantly high-quality Red Brangus cattle.

“The scale this opportunity presents is rare in the current climate, particularly in an operating environment where freehold land ownership is possible – combined with a low cost, low carbon operation that is immune to grain price volatility,” Brown & Co’s Charles Whitaker said.

“This is a unique opportunity in a rapidly developing part of the world which both food security mandates, beef supply chain and institutional investors are finding increasingly compelling.”

The business has a successful track record of establishing, operating and managing extensive cattle numbers across a fast-growing tropical pasture and cell grazing platform with adoption of leading innovation, technology and genetics at the core of the operation, Mr Whittaker said.

ESG, carbon and biodiversity

With about 18,500ha of forest reserve (see photo), the business was described as  well-positioned to maintain and build on strong ESG practices including animal welfare, low carbon impact, high efficiency water capture and use, active wildlife and biodiversity nature conservation programs, and potential for carbon sequestration alongside efficient cell grazing practices.

Water & Infrastructure

A comprehensive water and infrastructure investment program has been implemented together with an innovative, digital, patent-pending water monitoring and control system.

Some 80pc of the water required by the enterprise is derived from dam-collected rainwater in the summer rainy season (November to April) and stored in large gravity collection dams before being solar pumped up to ‘Australian tanks’ (a term open to reader interpretation – possibly turkey’s nests?).

Each dam and tank is supported by a bore and solar pump for additional capacity in the dry season.

“The quality of the management team together with investments made into infrastructure, water and genetics means this is an already at-scale low cost, low-carbon grassfed beef opportunity that is ready for an investor seeking a growth platform,” Brown & Co said.

Sovereign risk

In a nod to perceived sovereign risk in South America, the investor briefing makes the point that recent elections have seen a new 44-year-old, former IMF economist elected as President of Paraguay.

“The investment environment for those seeking long-term, scaleable investments is positive and stable, and consistent ongoing investment is improving the logistics and access to market outlook,” Brown & Co said.

A good example of this was the Bi-oceanic highway currently under construction which will link South America’s Pacific and Atlantic coasts and reduce logistics costs, further improving the competitiveness of the region.

“Over the medium and longer term we expect this to open up the Gran Chaco to significant development in the same way that we have seen other parts of the world that have seen investments in infrastructure and logistics,” the investor briefing says.