May 3, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

In March 2021, Hancock Agriculture, the second largest producer of beef in Australia, and its joint venture partner S. Kidman and Co. appointed Elders to market a portfolio of seven of its Northern Australia beef production assets. 

This move led to more than 1.8 million hectares (about 4.5 million acres) of prime Australian grazing land hitting the market, reflecting nearly 20 percent of the total 10 million hectares owned by Hancock Agriculture and S. Kidman, in which Hancock Agriculture Executive Chairman Gina Rinehart owns a majority stake in partnership with China’s Shanghai CRED, following its acquisition for A$386.5 million in 2016. 

Assets included in the offering that have already sold include:

~ Aroona Station in the Northern Territory was bought by the DiGiorgio family. Acquired in early 2017 by Hancock for $24 million, the 147,510-hectare Aroona is located 100 kilometers west of Katherine and included 15,000 head of Brahman cattle.

~ Willeroo Station was bought by the Brett family based in the Northern Territory. Adjoining Aroona, Willeroo is a 171,000-hectare station acquired by Hancock from Agri International, the Australian division of the Indonesian company Great Giant Livestock (GGL), in October 2017 for $33.05 million. The station included 21,000 head of Brahman cattle and an operational plant.

~ Nerrima Station was bought by the Emmanuel family of Western Australia. Located in West Kimberly and adjoining the Fitzroy River, Neerima totals 203,142.75 hectares (501,974 acres) with a three-year average carrying capacity of 15,445 and includes recent upgrades to its cattle yards and infrastructure.

~ Phoenix Park is an integrated cattle depot and cropping property with a capacity of 45,000 head per year that was acquired by Crown Point Pastoral  in February of this year. Originally acquired by Hancock Ag in 2016, this asset positioned Hancock to be a leading supplier to emerging Asian markets. 

~ Innamincka and Mecumba stations  (1.36 million hectares and 1.1 million hectares, respectively) were not originally included in the selected assets to be sold, however, Elders stated that expressions of interest on the holdings were strong enough to allow for a “timely sale”. These assets were also acquired by Crown Point in February of this year. 

As the sell-off comes to its conclusion, the final two assets, Riveren and Inverway stations in the Northern Territory have been acquired by Hughes Pastoral, owners of the largest privately held Wagyu herd in the world, in a deal reported to be worth A$100 million.

The Hughes family, which is also one of the top private landholders in the country, owning stations across the NT and Queensland, stated that their intention is to shift their herd (which numbers somewhere between 60,000 – 80,000 head) to 100 percent Wagyu.

The potential here cannot be understated, after records were shattered last week when a Wagyu heifer was auctioned for A$400,000. 

The Hughes’ have also been breaking records themselves. In June 2021, Peter and Jane Hughes broke Australia’s record for a single agricultural asset when they acquired the 438,000-hectare Miranda Downs station in Queensland in a deal valued at more than A$180 million. 

For Hancock Agriculture, the group explained in a previous statement that the sale of these assets has been the result of a natural progression following a rapid expansion and course of improvements undertaken across its portfolio, stating that it is… “now looking to complete its investment cycle and focus on other areas of growth in its agricultural operations.”

The timing of the sale has been orchestrated to capitalize upon the confluence of multiple favorable conditions: the return of a normal wet season in the northern Northern Territory, better than average rainfall in Northern Queensland, high cattle prices during a time of herd rebuilding following drought and floods, and high market demand for large scale cattle assets.

In April 2022, Tom Russo, general manager of real estate with Elders, who managed the sale process, said, “The growth of the Hancock Agriculture portfolio in such a small space of time, and its huge investment, is nothing short of astonishing.”

“This sale is a refinement of the overall portfolio following a period of value creation through further investment and strong management and our client’s intention is to reinvest in the growth and improvement of their larger agricultural enterprise, continue to focus on innovation, and maintaining high standards throughout the supply chain for employee safety and animal welfare.”

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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