November 7, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Packhorse Pastoral Company Australia (PPCA) launched in Australia last year with its eye set on building a $1 billion portfolio of regenerative cattle properties by 2027 that would play a critical role in carbon sequestration and addressing climate change. 

The plan called for properties to operate mostly under a service delivery model and non-ownership of cattle – meaning the properties will be rejuvenated and leased out to top beef producers for cattle feeding. Through this model, the company aimed to repair the soil with the help of cattle to restore grassland, and by doing so, targeting an IRR of between 8-10 percent (3-4 percent from yields and 5-6 percent from appreciation).

The restoration of these assets would not only improve the carbon content of the soil, but enable PPCA to sell carbon credit offsets at scale in a market expected to be valued at $8.25 billion by 2027, positioning the company as the world’s leading land steward, restorer, and beef supply chain.

However, tragedy struck at the end of August when Thomas Strachan, Packhorse’s co-founder and executive director, his son Noah, and their pilot Garry Liehm, died in a plane crash. 

Now, the decision has been made by Packhorse Pastoral leadership to list a collection of three prime regenerative cattle stations strategically acquired by the late Strachan over the past three years. 

“The directors of Packhorse Pastoral will consider Expressions of Interest to continue the successful regenerative work the company has been undertaking on its properties,” said Tim Samway, chairman, Packhorse Pastoral.

“That could be with a new partner who could inject substantial new capital but equally the company would welcome interest from local landowners who may wish to acquire one property or a line of three outstanding properties and so benefit from the economies of scale.”

The properties being offered via David Goodfellow and James Auty with CBRE all have registered carbon baselines in place and strategies to maximize carbon sequestration and natural capital development over the next 25 years. They also are all being used for cattle grazing under a “grass motel” agistment agreement with one of the largest cattle producers in Australia. They include:

~ Stuart’s Creek Station: located in Queensland, Stuart’s Creek was the first property acquired by PPCA in a $30 million deal. 

~ Moolan Downs: a 10,029-hectare property in Southeast Queensland acquired by PPCA in an off-market deal. Moolan comprises four properties: Moolan Downs, Cressy, Allambee, and Old Southwood, of which Moolan Downs, Cressy, and Allambee are Australian Certified Organic (ACO) and certified U.S. National Organic Program for cattle.

~ And Ottley Station: an 8,371-hectare station in New South Wales acquired by PPCA in early 2022. 

Collectively, all three properties have been rated to carry about 13,600 head, and are being used for growing-out cattle owned by the agistor. These cattle are bred elsewhere, and later moved to the stations for fattening.

Each property has undergone a range of improvements including cattle handling facilities, reticulated livestock watering systems, shedding and grain storage facilities, and access and sub divisional fencing to optimize both grazing and soil carbon management efficiencies.

Additionally, these lands, and all the natural timbered lands on the stations are subscribed to profitable carbon sequestration projects initiated by Packhorse management and designed to deliver responsible environmental outcomes as well as new income streams.

David Goodfellow, CBRE, noted, “This is a strategic portfolio of properties with very responsible and experienced management in place, which is designed to maximize the use of the expansive grasslands in a reliable rainfall area while capitalizing on numerous opportunities for improved carbon sequestration.”

 “Packhorse is a recognized leader in carbon farming initiatives and the environmental initiatives at these stations are well ahead of industry norms, with clearly established carbon baselines and management practices.”

The sequestration projects currently registered on the properties are expected to produce approximately 28,000 ACCUs (Australian carbon credit units) per year. At the current ACCU value of A$30-A$40 per unit, income stream expectations range between A$840,000-A$1.12 million per year for the new owner.

Goodfellow and Autry stated that the properties may be acquired collectively or as separate assets, giving all buyers – from institutional investors to local farmers – an opportunity to participate in the process, which calls for expressions of interest to be received by December 15.

Auty concluded, “We are delighted that Packhorse is willing to give both the corporate and family farming sectors equal opportunity to purchase these assets.”

~ Lynda Kiernan-Stone is editor in chief 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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