THIS week’s property review looks at reasons behind the change in direction for Gina Rinehart’s two pastoral businesses – Hancock Agriculture and the S. Kidman & Co joint venture – and some interesting developments in the property space concerning the companies.

Nobody has been more active in the Australian grazing property market than Ms Rinehart over the past five years, both as a buyer and seller.

Hancock Agriculture and Kidman Cattle Co collectively run about 240,000 head of branded cattle (with more anticipated after the next muster) on six million hectares across 22 properties (include several aggregations) operating in New South Wales, Queensland, Western Australia and the Northern Territory.

As part of its Wagyu program, Hancock also operates a number of dedicated feedlots for Wagyu programs. More on that as part of Beef Central’s recently launched Top 25 Lotfeeders feature, being published over the next four weeks.

When Mrs Rinehart decided to offload eight properties spanning 1.9 million hectares in 2020, some media saw this as first signs of her ‘bowing out’ of agriculture. The claims couldn’t have been further from the truth.

Australia’s richest woman was simply realigning her strategy to improve the genetics and quality of her cattle and also create a better balance between her breeding and finishing country.

There’s also compelling evidence it was about reducing her exposure to northern live export trade, in favour of traditional Australian production and processing.

Hancock Agriculture

Prior to its mining exploration success, the Hancock family owned and operated a number of well known cattle stations in WA’s north, including Ashburton Downs and Hamersley Station.

When Mrs Rinehart took control of Hancock Prospecting, she diversified her business interests beyond iron ore and made a string of cattle station investments including:

• 400,000ha Fossil Downs (capacity of 20,000hd), Kimberley, WA
• 265,000ha Liveringa (capacity 28,000hd), Kimberley, WA
• 312,730ha Mulga Downs (capacity 8000hd), Pilbara, WA
• 203,142ha Nerrima, Kimberley, WA. In September 2021, it was sold to WA’s Emanuel family for around $30m (including 15,000hd cattle).
• 171,000ha Willeroo, adjoining Aroona, west of Katherine, NT. In October 2021, it was bought by Hamish and Georgia Brett (Brett Cattle Co).
• 147,000ha Aroona, near Katherine, NT. In December, it was purchased in December 2021 by the DiGiorgio Family, Lucindale, South Australia.
• 3500ha Phoenix Park live export depot and holding facility near Katherine. In January 2022, it was sold to Crown Point Pastoral (a joint venture between Viv Oldfield and Danny Costello).
• 550,000ha Riveren and Inverway, Victoria River District, Northern Territory. In April 2022, it was sold to Peter and Jane Hughes for around $100m including 40,000 head of cattle.
• 457,200ha Brunchilly Station (capacity 24,000hd) breeding operation on the Barkly Tablelands of the Northern Territory. In November 2022, it was well advanced in a sale process along with three historic Channel Country backgrounding and grass finishing holdings in south-west Queensland.

Realignment

Brahmans destined for live export featured heavily in Hancock Agriculture’s previous business model, and while they are still run on some Western Australian holdings such as Fossil, Liveringa and Mulga Downs, as the pastoral portfolio has restructured in different areas, they have been largely replaced by Droughtmaster composite cattle in the extensive northern areas, and Wagyu in New South Wales, Queensland and southern Western Australia.

Today, Hancock Agriculture is focused on growing a premium Fullblood Wagyu herd, with a medium-term target to turn off 12,000 head a year.

The business is focussed on getting its grainfed model right. The parallel Kidman business is currently trialling some Santa channel country cattle on 150-day programs, up from 100 days, in a bid to balance meat quality with overall economic return.

Hancock Agriculture and S. Kidman & Co interim chief executive officer, Adam Giles, said it was all about ‘paddock to plate’.

“Our grazing properties breed, background and finish cattle, and our cropping properties produce the grain which our feedlots feed to the cattle to improve meat quality. On top of that we have a meat sales and marketing team to oversee the processing and to distribute the product.”

Hancock properties

For close to ten years, Hancock Agriculture has been buying up grazing country in the higher rainfall areas of southern Queensland and northern New South Wales – ideal for Wagyu operations. Here’s some of the deals:

• November 2014 – A series of small dairy, beef and peanut properties covering more than 3500ha in southern Queensland’s South Burnett. When plans for the Hope Dairies Mary Valley milk powder operation were shelved, the aggregation was repurposed into a Wagyu beef breeding operation.
• December 2014 – the 4600ha Dubbo district grazing properties Boogadah and Caigan near Mendooran were purchased for $25m including the 3000 head highly regarded Green Hills fullblood Wagyu cattle herd (including 1600 elite fullblood females).
• November 2015 – the showcase 10,000ha Glencoe Station, north of Dubbo, is purchased for $30m.
• December 2016 – 1011ha breeding property Hiddendale, also north of Dubbo, is added to the adjoining 4600ha Boogadah and Caigan. Together, the three properties are known as the Caigan Aggregation.
• June 2017 – the 8000 head specialised Wagyu feeding business Maydan feedlot near Warwick in southern Queensland.
• December 2017 – Holyrood (adjoining the Rockybank stud farm) and South Maffra at Roma in southern Queensland.
• Forestvale north of Mitchell in southern Queensland.
• August 2018 – 17,800ha Sundown Valley, near Kingstown, west of Armidale – one of NSW’s best known and largest-scale backgrounding and finishing operations. The business also owns another unnamed Kingstown property.
• August 2018 –1607ha 7000-head Gunnee feedlot near Inverell.
• November 2018 – 3234ha Glendon Park Aggregation (comprising four properties), 40km north-east of Armidale.
• October 2019 – historic 3900ha Warrabah Station, between Kingstown and Manilla, west of Armidale. It neighbours the three Lyndhurst holdings spanning 3280ha.

Recently, the company diversified from these high rainfall areas on Australia’s east coast, taking ownership of an aggregation of properties (believed to be near or including Mrs Rinehart’s property Lang’s View) on the outskirts of Perth to grow Wagyu beef.

Drought mitigation assets

The forward-looking company has also secured two sizeable assets for drought mitigation.

A year ago, Hancock Ag made its first foray into dedicated cropping country with the purchase of the 3073ha Warra Warra on Queensland’s Western Downs for between $27m and $28m.

The acquisition was seen as a dedicated grain play, not necessarily integrated into the company’s cattle or lot feeding interests. The rationale was to diversify the company’s investment portfolio by securing high-quality farming land and water. Warra Warra boasts Condamine River and Cooranga Creek frontages.

Then, in October 2022, Hancock Agriculture secured three irrigated cropping properties in the Wee Waa region of New South Wales in a transaction worth around $150m. The 6856ha parcel featured sizable, reliable water entitlements, with a combined allocation of 23,000 megalitres plus 7000ML of groundwater.

Kidman & Co

In December 2016, Gina Rinehart partnered with China’s Shanghai Cred (a consortium known as Australian Outback Beef) to buy the iconic S. Kidman & Co for $386.5 million.

The majority joint venture purchase was more than just a business opportunity for Mrs Rinehart.

At the time she said, “the acquisition retains an iconic Australian business in majority Australian ownership and echoes the pioneering spirit of Kidman’s founder, Sir Sidney Kidman – who himself had been in partnership with my maternal grandfather, James Nicholas.”

1. Kidman & Co, founded by pastoral legend Sir Sidney Kidman in the 1890s, was the biggest landholder in Australian history and one of the country’s largest beef producers, with pastoral leases covering 101,000sq km across South Australia, Western Australia, the Northern Territory and Queensland.

The business was offered for sale in April 2015 and included 19 individual properties operated as 12 enterprises, comprising 10 cattle stations, a bull breeding stud farm and a feedlot.

However, the possibility of the company being purchased by foreigners, including the Chinese, triggered a vocal public backlash. In the end, the federal government’s approach to the sale of Kidman “enabled a local Australian company to pay a fair market price and retain Kidman in Australian control.”

Kidman’s 23,677sq km Anna Creek (the world’s largest cattle station) and The Peake (outstation) were carved off the portfolio and secured by neighbouring cattle producers, Williams Pastoral Holdings, reducing the overall S. Kidman & Co land area to 77,700sq km.

That 2016 business opportunity was originally built around a proposal to live-export large numbers of Kidman slaughter weight cattle to an island off the coast of China for local processing. That concept, which attracted widespread national headlines at the time, never eventuated.

Divestment

In November 2020, Hancock Agriculture and S. Kidman & Co announced plans to divest some pastoral holdings from their portfolios to focus on other agricultural and cattle opportunities.

In March 2021, the plan was activated and eight properties spanning 1.9 million hectares were offered to the market.

Hancock Agriculture would not comment on the sales, but Beef Central understands the eight properties raised around $350 million.

The sale included the Kidman-owned 7967sq km Ruby Plains aggregation (comprising the 480,000ha calf factory Ruby Plains and 316,000ha outstation Sturt Creek) in Western Australia’s Kimberley.

In September 2021 it was purchased by prominent Alice Springs businessman Viv Oldfield for $70m including around 25,000 head of Brahman cattle.

While South Australian Kidman properties Innamincka and Macumba Stations were not originally intended to be part of the Hancock/Kidman divestment process, selling agent Elders received significant interest from multiple parties.

In October 2021, it was revealed that Mr Oldfield had also secured the low rainfall, mostly desert country, with some channels, in an off-market agreement.

• 13,552sq km Innamincka (capacity 12,740hd) – SA’s second largest cattle station is located on Cooper Creek in the Channel Country.
• 11,063sq km Macumba (capacity 9000hd), located further west, is used for breeding cattle.

In April 2022, Kidman listed its last remaining South Australian beef industry asset – the 18sq km Tungali Feedlot (licenced for 4966 standard cattle units).

Located in the state’s eastern corner near Sedan (on the edge of the Barossa Valley), it was sold four months later to nearby grainfed beef producers, Simon Rowe and family’s Princess Royal Station (see upcoming Top 25 Lotfeeders profile).

The sale of Innamincka, Macumba and Tungali ended 122 years of South Australian pastoral land ownership for the iconic company founded by Sir Sidney Kidman.

Late last year, Beef Central reported that S. Kidman & Co was well advanced in a sale process to divest three historic Channel Country backgrounding and grass finishing holdings in south-west Queensland.

• 5540sq km Glengyle (capacity 7735head) situated in the heart of Georgina River channel country is ideal for breeding and growing cattle.
• 6600sq km Durrie (capacity 9100 head) located in the Diamantina channel country is considered to be some of the best grazing in Queensland.
• 7510sq km Naryilco (capacity 11,520head) on the southern end of the channel country in south-west Queensland is highly regarded for producing excellent bullocks.

Kidman & Co today

Seven years after the sale of S. Kidman & Co to Gina Rinehart, most of the original portfolio established by Sir Sidney Kidman has been sold off, with just three of the ‘better’ properties remaining:

• 5700sq km Helen Springs (30,000hd) a breeding property on the western end of the Barkly Tablelands in the Northern Territory.
• 8910sq km Durham Downs (including the Woomanooka outstation) – the highly regarded breeding and backgrounding property with a 20,210 head capacity is located in the state’s south-west channel country.
• 6230sq km Morney Plains (capacity 10,695head) – also situated in south-west Queensland is a prized channel country breeding and growing property.

The 14,600ha Rockybank (capacity 3300hd) a stud breeding centre at Roma in south-west Queensland (purchased by S. Kidman & Co just before the sale to AOB) is also being retained.

Where does that leave S. Kidman & Co?

So, where does that leave S. Kidman & Co?

In terms of governance, nothing has changed. Gina Rinehart continues to own 67 percent of the company, while Shanghai Cred holds 33 percent.

Adam Giles, interim CEO of Hancock Agriculture and S. Kidman & Co, said like Hancock Agriculture, Kidman was realigning its cattle genetics to improve its beef eating qualities.

“It has moved away from country and cattle that are more suited to tropical areas of Australia to properties that are more consistent with cattle that perform better with backgrounding and feeding and present well when processed for the domestic and export plated market,” Mr Giles said.

Kidman now focuses on 100-day and 150-day grainfed Santa Gertudis, and first cross Wagyu cattle fed for 350 days and processed into brand programs selling domestically and exporting internationally to some of the finest hotels and restaurants.

Given its recent property divestments, a cashed-up Kidman may be likely to follow a similar model as Hancock Agriculture and secure higher rainfall country closer to feedlots and markets.

Beef Central understands a number of property acquisitions are well advanced, with the business also looking at country in Victoria.

It is strongly indicated than Kidman has secured all or part of Packhorse Pastoral Co’s cattle portfolio put together by the late Tom Strachan.

These three blue-ribbon southern Queensland and northern New South Wales grazing properties are under contract following an expressions of interest campaign that closed in mid-December, however CBRE’s James Auty was unable to discuss the sale due a confidentiality agreement.