GOOD quality forest breeding country in Queensland’s north and north west is in high demand, and calculating buyers are doing their sums to determine what they can pay for it.
Northern breeding forest country roughly encompasses an area from Normanton to Croydon in the Gulf, across Georgetown, Einasleigh, Mount Surprise in the lower peninsula and down to Charters Towers.
Over the last three to five years, Townsville-based Herron Todd White valuer Roger Hill has monitored strong increases for the region’s agricultural land values.
“Early in that phase, southerners came north to buy grassed country. Now, the market is in the same situation where those on the downs are looking to the forest country for grass and safety.”
Typically, in late April, the property market would be a month into marketing and sales campaigns, however the rain arrived later than usual this year.
Mr Hill said great rain in the northern forest country last summer has produced an incredibly good grass response, as well as a good weed response (some of which is seasonal).
However, grass on the downs has not responded to good rain and that failure is pressuring local demand for forest country.
While there appears to be a shortage of forest breeding country, Mr Hill admitted local buyers are door-knocking and several southern buyers are quietly conducting due diligence on a number of off-market northern assets.
“The time to sell forest country comes and goes. Typically, when it is dry on the downs, interest in forest country picks up – and that appears to be how 2021 is rolling.”
Mr Hill said with very little blue-ribbon forest country on the market, purchasers were picking their way through secondary and coarser country types.
“This is a boon for those who bought rougher or lighter forest country three or four years ago. In 2016, in the Normanton to Croydon area, country was selling for $40/$45 per hectare. In 2021, there is talk of offers upwards from $100/ha.”
Mr Hill said areas to the east, where the country is heavier, and has ironbark and a bit of rock, are confirming an incredible degree of growth.
“There is an example on the basalt country north of Charters Towers that sold privately in 2016 for $186/ha. It took a couple of years to sell the property. That type of area rate is what is paid for rougher and lighter country now.”
“Come forward to 2019 with the auction of Marionvale with the land component at $578/ha. The only guides since are two, small blocks near Mt Surprise that indicate about $800/ha,” he explained.
Land condition being recognised
Mr Hill said the market is finally recognising the commercial reality of land condition.
“Traditionally, the market has been naïve to land condition variations. There are examples of country with no grass that sold for exactly the same as places with well managed grass, in the same way as places infested with Prickly Acacia.”
He said that northern buyers are becoming much more commercially attune to the benefits of land condition status when pricing offers for property acquisitions.
“The market is more aware of the productive and economic benefits of better land condition, and as a result, stronger prices will be paid for country that is commercially productive and provides an immediate financial return.”
“Prospective buyers may consider purchasing a run-down property knowing it will take a year or two to turn it around, but an increasing number of discussions are centred on the economics of rotations, resting and spelling country – in other words, doing more with less,” Mr Hill said.
Properties for sale
Mr Hill said during this phase of the market cycle, there is usually an increased number of secondary located forest breeding properties offered to the market.
“While they are not the blue-ribbon operations located or close to markets or Central Queensland buffel country, these are often reliable calf factories.”
The most recent example is Bellevue Station in the region’s Lower Peninsula.
The 211,664ha holding, situated on the Mitchell River near Chillagoe, 300km north west of Cairns, is being offered via expressions of interest. Selling agent LAWD is anticipating more than $35 million.
Irrespective of what the agent price guidance is, the market will determine what price to offer.
Mr Hill said Queensland’s northern breeding forest country ‘was not for everyone’, yet there are many examples of profitable weaner factories in the area.
“Cattlemen with a bit of business sense are often surprised how, with prudent management of costs, grass, nutrition and genetics, this country can produce good quality weaners,” he said.
“Weaners cost a lot at present, so the backgrounders look further north to gain genetic control over a weaner factory and secure their supply chain,” Mr Hill said.
A good quality, large scale breeding enterprise that has just been listed is the 159,700ha Strathpark Station, 140km north of Richmond.
On the market for $25 million (including 8000 head of cattle) with Kennedy Rural, Strathpark provides an attractive scale, reliable weaner factory on the doorstep to Mitchell grass downs backgrounding country and southern market areas.
Mr Hill said the rural property market was a free economy.
“With cattle prices where they are, interest rates so low and good rain in the forest districts, the only variable is the human choice to sit out, meet or increase the market pricing.”
“Presently, the market is riding short in its stirrups, the forest is looking to ride hard for a bit longer, the downs may keep its length for a while or even lengthen its straps for a stride or two and catch its breath,” he said.