February 1, 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. 

As the sell-down continues, Hancock Agriculture and S. Kidman & Co. have entered into contracts to sell Phoenix Farm located in the Northern Territory, and its Innamincka and Mecumba stations in South Australia to Crown Point Pastoral – a joint venture between the Oldfield and Costello families.

Crown Point has already acquired the Ruby Plains and Sturt Creek Stations as part of this divestment campaign. Totaling 796,134 hectares (1.9 million acres), these adjoining leases are excellent breeding stations with reliable rainfall, and abundant natural water storage. Prior to the sale, upgrades were made to water capture and distribution, and livestock handling infrastructure, as well as communication systems.

Phoenix Park was originally acquired by Hancock in 2016, one week after acquiring Riveren and Inverway. Phoenix Park is an integrated cattle depot and cropping property with a capacity of 45,000 head per year. The acquisition of this infrastructure positioned Hancock to be a leading supplier to emerging Asian markets.

The 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”. With the addition of Innamincka and Mecumba, a new total of nearly 3.8 million hectares of land, a collection representing approximately the area of Bhutan, would now move on the market. 

“Genuinely at the start [Innamincka and Macumba] were not on the market and it almost happened organically through the process;” said Tom Russo, executive general manager of real estate, Elders. “…we were speaking to dozens and dozens of interested buyers in the Hancock portfolio and as quite often happens a number expressed interest in properties outside the portfolio.”

Other assets 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.

~ And 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.

“The sale of these properties is consistent with Hancock Agriculture’s strategy of divesting properties where it has already invested to improve them by focussing on specific areas, including improved animal welfare and employee safety, the use of technology and innovation and genetic improvements across the herds,” said Hancock in a statement outlining the latest divestments.

Following this string of deals, only Riveren and Inverway Stations in the Victoria District in the Northern Territory remain available from Hancock, and the Tungali feedlot and head office in Adelaide remain available from the S. Kidman & Co. assets. Hancock Agriculture initially acquired the 550,000-hectare (1.36 million-acre) aggregation with 40,000 head of cattle in 2016 from Indonesia-based Japfa Santori. 

“Our vendor remains flexible in its approach to the Riveren and Inverway aggregation sale, which would also  function well if operated separately,” stated Hancock Agriculture. “There are also several investors currently engaged in the sale process  who are motivated to acquire all or part of the aggregation should a lease arrangement be agreed with a  suitably qualified counterparty over all or part of the combined stations.”

Moving forward, Hancock Agriculture expressed that it intends to hold and grow its remaining portfolio, which includes assets in South Australia, New South Wales, Queensland, West Australia, and the Northern Territory, as well as its east coast Wagyu operations representing the world’s largest Fullblood and Purebred Wagyu herd.

“Across these operations, Hancock will continue to be an Australian agricultural industry leader in the application of innovative technology, and in identifying and incorporating ways to continue to improve employee safety and animal welfare,” said the company. “Hancock will continue to invest in its numerous cattle stations, maintaining its management basis, ‘happy healthy cattle are the best cattle’ and strategically targeting technical and other improvements.”

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– 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 Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.