LAND values for cattle stations on the remote Cape York Peninsula in far north Queensland have remained much the same for the past 10 years, but there’s probably no better time to sell, market watchers say.
After a considerable drought in large-scale listings in the region, rural property agent TopX FNQ has listed more than 4000sq km of cattle country in the Musgrave Station region in the past couple of weeks.
The listings include:
- 230,000ha Holroyd River Station – Beef cattle breeding operation on a large scale with future potential for tourism and protein production. Located 530km north-west of Mareeba or two hours from Musgrave/Coen. Carrying capacity 18,000 head. Holroyd River includes the largest nature refuge in Queensland, taking in nationally-recognised wetlands, threatened vegetation communities and threatened plant and animal species. In 2010, owner D’Arcy Thomas Byrnes won a top environmental commendation at the Premier’s ClimateSmart Sustainability Awards for fencing-off sensitive wetland areas to prevent cattle access, establishing new off-stream watering points for stock, monitoring and controlling pest animals and improving plantings.
- 121,406ha Yarraden Station – Beef cattle breeding operation, 440km north of Mareeba or two hours from Musgrave/Coen. Owned by the same vendor as Holroyd River, Yarraden has a carrying capacity 8000 cattle. It will be offered separately or conjointly with Holroyd Station, together with a domestic licensed meatworks facility at Rocky Creek on the Atherton Tableland and two butcher shops in Cairns for a WIWO POA.
- 64,700ha Strathaven Station – Breeder block, criss-crossed by three Peninsula river systems, 470 km north-west of Mareeba and 70km west of Musgrave. Sale includes 3500 head, but carrying capacity is 3800.
TopX property agent John Friend, who services the remote Cape York region across to Croydon, Normanton, Laura, Cooktown and Karumba in the Gulf, said the three sales coincide with mustering.
“I advise property owners who are considering selling to do so during mustering season – when cattle are in the yards and staff are busy,” he said.
The season often dictates the timing of a property marketing campaign in the Peninsula region. It allows potential buyers or investors to access the properties from now to the start of the wet season. In fact, they can follow the cattle being trucked south to the meatworks, right up to the point of sale/and into retail/wholesale sector.
The Byrnes family, which owns Holroyd River and Yarraden Stations, have for many years run a vertically-integrated beef operation including the Rocky Creek meatworks located between Mareeba and Atherton. The plant is run in conjunction with the company’s two cattle stations and two retail butchery outlets in Cairns, together with a meat wholesale business.
Determining an individual value for Holroyd River or Yarraden Stations, together with the meatworks and retail shops is difficult to determine, according to Mr Friend, but the entire operation is expected to achieve more than $30 million.
Because all three properties are located on the Cape York Peninsula and are a five-hour drive from Cairns, Mr Friend said interested overseas parties were likely to fly into the stations.
“I plan to remain on property from Monday to Friday and drive people between the holdings, which are just a couple of hours apart,” he said.
While it is still early days, there is plenty of interest in the three Cape York stations with inquiry so far from China, Malaysia and several large Australian corporates.
Mr Friend said the two owners (of the three properties) were selling for family reasons.
“Those reasons may have been put on hold if there wasn’t industry certainty, driven by the current confidence in beef and the China-Australia Free Trade Agreement,” he said.
Mr Friend explained when Strathaven’s vendor Anthony Elliott, who has considerable investments in northern and western Queensland, purchased the property six years ago, he rebuilt it from top to bottom.
To fully-utilise Strathaven, he invested in new fencing, new steel yards and new machinery sheds. He also built two new houses – one for the manager and one for himself.
Cattle numbers determine property value
It is interesting to note what dictates property value in the region.
Mr Friend said the land component had remained much the same and the country had the same production figures as it did 10 years ago.
“But what’s making these properties more attractive is the number of cattle that will be involved in the sale,” he said.
“The value of Cape York cattle stations will have doubled in 10 years simply because there are larger numbers of cattle involved, and cattle are worth more. Strathaven should make $12 per hectare, fully stocked on a walk-in walk-out basis, with the new improvements.
Mr Friend said far north Queensland experienced a similar property market about 15 years ago.
“To try and market a property in Cape York without stock would be very tough – almost impossible due to the difficulty in stocking a bare property. There aren’t any breeder cattle available in large numbers anywhere up here, so it makes a destocked property virtually unsaleable in today’s market.”
Mr Friend said concerns about a lack of breeding cows under 10 years old in the north of Queensland dominated a recent TopX agency group meeting.
“Most of the stations up here start marketing their 10 year old cows as culls, or for slaughter, or on the store market. Our advice is not to sell any females because there are no young breeders for sale.”
“For a buyer of a destocked station that would normally 3000 to 4000 breeders, they are just not going to be able to source them. It would make that property a very worrying investment.”
Buying stocked grazing land in the Peninsula at $12/ha?
Readers, please note: comments below were sourced from a contact by Beef Central publisher, Jon Condon – not property editor Linda Rowley
Beef Central’s readers from more southerly parts of the continent who might be unfamiliar with the Cape York Peninsula area, may struggle to understand how it’s possible to buy any grazing land for $12/ha, let alone stocked.
For this reason we asked a trusted contact in far North Queensland who knows the Peninsula region well to provide a snapshot of the environment, and the cattle production challenges it faces.
He warns, from the outset, that there are a lot of problems with trying to make making any money out cattle in Cape York.
The big pastoral companies had selected the better country in the region based around the big river systems running west, on the west side of the Cape to the north of Normanton. This included better frontage country and fair areas of heavy clay soils, treeless black soil and marine plains that grow decent amount of grass. This part of the Cape, at least, is not too phosphorus deficient.
The rest of the Cape is fairly ordinary low-fertility soils (with the exception of the Lakeland Downs basalt country near Cooktown) growing a range of reasonably palatable grasses including speargrass, plume sorghum, kangaroo, golden beard and forest blue grass. Unfortunately over-grazing and annual burning has lost good grasses in some areas, with unpalatable species like wiregrass, reed grass, canegrass, grader grass, fire grass, blady grass and rats tail dominating.
As well, the long-term practise of fires in April-May has led to a lot of timber thickening, so a lot of country grows a lot less grass under the tree canopy.
Except for river frontages, the rest of the Peninsula is severely phosphorus deficient, and if phosphorus is not fed over the wet season, branding rates often will not exceed 50pc, and death rates will be 10-15pc each year or higher. Also, annual liveweight gain will often not reach 60-80kg.
With phosphorus supplement programs, these figures will be lot better, but supplement costs will be in order of $20-25 head/year, depending on freight rates.
Another beef production challenge in the region is freight costs themselves. Supplies in, and cattle out, are all expensive, and most years a truck won’t move from December to April-May because of flooding and boggy roads.
That can lock a Peninsula cattle operation into selling cattle at the time of year when there is traditionally already a flood of cattle onto the market with first round mustering across other parts of North Australia.
The cost of further developing country in the region is hard to justify, in a region where a stocking rate of an adult beast to 20ha is common, producing less than 50pc weaning rates plus only 60kg annual liveweight gain. The economics behind adding further fencing and waters is often hard to justify on paying off that sort expenditure.
Good points for the Peninsula region include a reliable wet season and potential for stylo legume development.
Seca and verano stylo planted out through trees, plus phosphorus feeding in areas without timber thickening issues, have potential to boost property productivity in the region.
The stylo-phosphorus strategy, executed properly, can increase annual liveweight gain, drop death rates, raise fertility levels, and improve stocking rates to allow for fencing and new waters to be a viable option.
“Throw in a botulism vaccine for everything, vibrio the bulls and get cattle into some management groups, and things could happen,” our contact said.
With the low cattle prices and the rising cost price squeeze over last 30 years, however, most family-scale enterprises in the region have resorted to seeking an off-farm income, such as grading/road maintenance for local shire council.
“If cattle prices hold up to reasonable levels over next 10 years, some interest may be shown in development on the Cape, even if that involves usinbg the country as a basic breeder block and consigning weaners to southern growing/finishing country. Some of this is happening now,” he said.