March 20, 2019

Australian agribusiness Consolidated Pastoral Company (CPC) announced it has agreed to sell Mimong Station to Baldy Bay Pty Ltd., which is owned by pastoralist Sterling Buntine, for a reported A$20 million (US$14.3 million).

Mimong, which spans the northwest region of Queensland into the Northern Territory, will join Buntine’s portfolio of properties spread across the Barkly region of the Northern Territory and the Kimberly region of Western Australia. In 2008, Buntine acquired the 400,000-hectare Alroy Downs Station in the Northern Territory for A$70 million (US$50 million), and, in 2016, was a member of an investor syndicate that attempted to acquire the famed S. Kidman Co. Other properties in his portfolio include Dalmore Downs, Lissadell Station, Bedford Downs Station, and Lansdowne Station.

At 80,000 hectares, Mimong is one of CPC’s smaller holdings, and is considered a non-core asset. The land has the capacity to run 9,000 head of cattle, however, the sale, which included the land, plant, and equipment, did not include livestock.

Recent rains have led to a bit of a land run in Queensland, and Troy Setter, CEO of CPC, told Beef Central that the time was now right to sell, saying, “We had looked at selling it a few years ago when we sold our other western Queensland stations, but ultimately kept operating Mimong for a while longer. But now is an opportune time to sell out at a higher value, given last month’s rain.”

Held by UK private equity firm, Terra Firma, rumors about the sale of the CPC portfolio have circulated since November of 2014, but the divestment process did not being in earnest until last year with the announcement of the sale of Nockatunga Station, a bullock fattening operation located in southwest Queensland.

Spanning more than 850,000 hectares (2.1 million acres), Nockatunga was acquired by CPC in 1990 and includes 5,000 head of cattle and a station plant, and is reported to have been sold to the Harris family’s Cleveland Agriculture for as much as $50 million.

Then, in January of this year, CPC sold three more cattle stations: the Auvergne and Newry Stations in the Northern Territory, and the Argyle Downs Station in Western Australia – with a combined total of 740,000 hectares (1.8 million acres) of land, and 52,000 head of cattle – to Vietnamese investment group Clean Agriculture and International Tourism (CAIT) in a deal valued at $135 million.

However, despite being for sale, CPC is diversifying its operations through expansion into crop production in the northern region of the country.

There exists a number of drivers behind the decision to expand into cropping, according to CPC CEO Troy Setter, including the establishment of additional channels of income.

“…whether its sorghum hay or sorghum grain, or whether the next crop following the sorghum could be something like mangoes or melons. We’re still working through that, but we’re certainly committed to developing and looking at all opportunities in northern Australia,” Setter told ABC.

A second driver is the ability for CPC to become more self-reliant in regard to cattle feed, which would result in lower costs for transportation of feed for its young cattle which the company trucks in from the south.

After the sale of Mimong, the remainder of the CPC portfolio will still consist of 11 stations totaling 3.5 million hectares of land with a carrying capacity of nearly 300,000 head of cattle. This makes CPC still one of the largest pastoral holdings in the country.

“While challenging seasonal conditions in many areas of Australia have been well documented, CPC’s geographically diverse portfolio positions the business well in the current market and season,” said Setter. “We continue to benefit from strong demand dynamics for beef in Asia and around the globe, our Indonesian supply chain and investments in our properties and genetics.”

-Lynda Kiernan