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China drives change to family-owned Centre

TURNING OF TIDE: Alice Springs livestock agent Doc Cunningham can see a shift in the market (pictured with Ro Cunningham).
TURNING OF TIDE: Alice Springs livestock agent Doc Cunningham can see a shift in the market (pictured with Ro Cunningham). NIKKI WESTOVER

CORPORATE ownership of productive Australian pastoral land is growing, but there is one place where families still rule the roost: the Red Centre. Or does it? Property sales this week suggest this may be about to change.

South of Tennant Creek, where the corporates dread the drier conditions and constant threat of drought, there is a long tradition of family-ownership in the cattle business.

That trend was consolidated only a year ago with the sale of the Delmore Downs and Delny pastoral leases, 200 kilometres north-east of Alice Springs.

Covering some 1200sq km of the Harts Range district, Delmore Downs Station was formerly owned by the Holt family, who ran the two leases as one station.

The buyer was Napier Pastoral Company, another family-owned cattle business from South Australia.

Family-dominated ownership of the Centre cattle trade runs counter to a trend in the North toward corporate ownership. That is because conditions are different in Central Australia to the Top End; the market is steadier, not so reliant on live export.

And while there is more volatility in rainfall, most agree that a family operation can often pull in their horns during dry times.

But developments this week may indicate there is a change in the wind. Hewitt Cattle Australia, backed by Canada's Public Sector Pension Investment Board, agreed on an estimated $50m for Ambalindum and Numery Stations, about 140km east of Alice Springs.

It is understood the sale will settle by the end of this week.

Combined, the properties cover some 650,000 hectares and run about 20,000 head.

CEO Mick Hewitt has told media the purchase has great strategic value, and supports their interest in a live trade with China. Interest in Territory cattle property waned following the live export bans of 2011, but picked up again during 2012 in a market where 223 pastoral leases cover 44% of the land mass.

An investigation last year by the ABC revealed 141 of these leases were family owned and 82 corporate-owned.

Of the 223 NT pastoral leases, 176 (or 75% of the total pastoral land area) were Australian-owned and 47 (25%) were fully or partly foreign-owned, of which 14 (7% of area) were fully foreign-owned.

The two properties sold to Hewitt had been owned by the Edmunds family, Tim and Emily, aka Hale River Pastoral Company and cover some 6400sq km of country at the edge of the Simpson Desert.

Immediate plans for Ambalindum are as a breeding ground for Hewitt's broader operations, as well as bringing the company's total Australian holdings to 75,000 head of cattle across about one million hectares. And Mr Hewitt tipped further development was likely for Central Australia. Sales of property in Central Australia over the past two years have boomed, and include McDonald Downs, Aileron, Derwent and Glen Helen and the aforementioned Delmore and Delny Downs.

Narwietooma as well as Murray Downs and Epenarra and also Pine Hill, have been sold. The interest has been attributed variously to a strong export market to Vietnam, as well as proximity to southern, eastern and northern markets.

The sale may flag the beginning of keener corporate interest in the mostly family owned Centre.

Alice Springs livestock agent Doc Cunningham agrees.

"It is changing. In the 49 years I've been involved in the region you can see that shift.

"It still mostly is family owned, but you can see the trend of corporate fellows starting to get interested in the place."

As for exactly why all the interest, Doc has mixed feelings.

"I think they're starting to see how inexpensive this country is to run.

"Ambalindum is one of the better places in the country.

"But Vietnam is a bit wavery, that hasn't really happened yet, but we hope it will; it's probably a go this year.” While Vietnam beckons and Indonesia's recent relaxation of the maximum live weights for export cattle means more exports from the Top End, the real interest for the Centre and other southern properties is in China.

Live exports to China have to come from below the bluetongue line, and may therefore mean a new market for southern and central beef when the market finally breaks.

The insect-borne bluetongue virus is monitored in a zone across Northern Australia which is defined at its southernmost edge by a southward-sloping line running east-west across the Territory at Tennant Creek.

The BTV free zone to the south of the line was significantly extended in 2013 to include areas west and south-east of Tennant Creek.

"For the China market, they've got to come from below the blue tongue line,” says Doc Cunningham.

"China has a strict protocol, they can't purchase cattle from north of the line.”

While the export of beef to China is yet to get going, many expect the boom will come, and soon. Wellard, Australia's largest livestock exporter had expected to start exporting beef to China this month.

Doc Cunningham thinks China is an opportunity waiting to arrive for the Centre.

"A lot will happen in the next 12 months.”

The likely fallout, however, is heightened corporate interest in family-owned Centre properties and pressure for those families to sell.

Topics:  alice springs farm glenn morrison heartbeat heartbeat column land owners land ownership northern territory station


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