Sunday, July 21, 2024

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HomeUncategorizedCorporate buyers may end family cattle industry

Corporate buyers may end family cattle industry

By ERWIN CHLANDA

How come the value of cattle stations is skyrocketing? The bar of the Centralian Beef Breeders Association was a good place for a pub test.

Some of the biggest pastoralists from The Centre, and agents from interstate, were having beers at the end of the Show, just days after the sale of the 65,000 hectares Woolner Station in the Top End for by an overseas corporate buyer $49m, according to the Cattlemen’s Association’s newsletter.

The News spoke to several of the bar’s patrons on the condition of not naming them, about what is clearly a historic switch from a 150 years old family-based industry to investment opportunities for big companies, some from overseas, and superannuation firms.

The question by the News was always: “How come the sale prices are going thorough the roof?”

The answers:

“I’ve got no idea. Prices of cattle are down. Nobody knows the answer. I’m not from here.”

“We’re not making any more land.”

“You’d better ask the blokes who are buying them. They obviously know something nobody else knows.”

“No comment. They clearly have a bigger cheque book than the next bloke.”

Are purchases in line with the earnings being made?

“Sometimes you make a dollar, sometimes you don’t.”

“Ask the guy with the blue hat over over there. He bought a couple.”

“I tell you one reason is because the families are getting out, family people are leaving. Kids want another life. Companies are coming in. We’re all pretty naive here. We live in Australia, Alice Springs, if you look at the world there is only so much land. The reality of economics, it does not make sense.”

“Look at the Canadian prices at the moment. What we are getting for a kilo they are getting for a pound over there.”

“Because the corporates are buying them. Not with borrowed money.”

“They are people who want to expand but they don’t stand alone on their purchase price. They are bought by people who are prepared to buy because they want to expand, but they don’t stand alone, they have other properties that are paid for. Just to have the income from their other places to pay the interest.”

Isn’t it simple to calculate the income – carrying capacity of two head per square kilometre, three years to be ready for the market and bring $1000 a head? This kind of calculation?

“That’s what I’m saying. They won’t stand alone. If you purchase a property you need other properties to generate the income to cover the interest and over time, as you pay down your debt, you start to break even as your interest costs are reduced. The corporates buying them have seven or 11 year plans and they don’t intend to keep an asset. If they are a superannuation company they put their money into various industries and they get out at a pre-determined time and the capital growth is what they are chasing. So they only need to break even while they own them. When they sell them they move the money into another industry.”

“We buy them and the intention is never to sell them. These people, the corporates, they buy them with the intention of selling them. We buy them as our families expand, we need more country. We’re competing with them. They are not emotionally attached [to the land]”.

“[The stations’ prices are going through the roof] because they are good things.”

“I have no idea. Somebody is keen … I have no idea.”

“Land value is rising Australia wide. They are not making any more land, Central Austraia is the biggest organic pastoral region in the world.”

“It must be a culmination of factors, I suppose.”

“It’s not because of the cattle prices because the prices are not that good, they are OK. I don’t know why [the station values are going though the roof]. We were only talking about this yesterday.”

“A lot of our part of the world is superannuation investment funded.”

“A lot of overseas money.”

From China?

No. Canada.

1 COMMENT

  1. This is good for a giggle, you called it a pub test, which is interesting in itself.
    You forgot to ask the privates if they’d be happy to sell to corporates – no doubt someone’s happy with the price received – or they wouldn’t sell in the first place.
    And you forgot to notice that corporates create jobs in the district, amen to that for those of us who aren’t generational recipients, or with a purse big enough to do it alone.
    It’s not just about land, it’s about an industry, and frankly your elitism perspective is sadly a bit ho-hum.

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