LOOKING through last week’s QCL property section I noticed Avago Station in the Northern Territory is for sale and it prompted me to reflect on just how much progress has been made in the last 20 years in realising the grazing potential of vast tracts of northern Australia.
Avago is a very aptly named property as it encapsulates the determination and sheer hard work of pioneering owners Keith and Roxie Holzwart.
The property is offered for sale with 16,000 head of cattle but at the moment it is also carrying some agistment cattle so the present numbers are up around 18-19,500 head.
What a far cry this is from the humble beginnings in 1987 when Keith and Roxie first bought the block.
Located to the west of Larrimah and Daly Waters on the Sturt Plateau, Avago was a virgin slab of 1578km2 (390,000 acres) of unimproved Savannah country. There was a bit of boundary fencing on the eastern end but that was it. No surface water, not even wild cattle, nothing.
The local view was that it might be worked up to run 3000 head but Keith reckoned he could see potential for 4500 at least and so began the challenge of bringing untapped pastoral land into production.
For the next eight years, the couple attempted to develop the block while Keith maintained his day job as superintendent of the Emerald saleyards.
Their first cattle were 62 heifers bought out of an Emerald sale and trucked up there in three trips in Keith’s old Leyland body truck.
A similar long distance commute in 1989 yielded their first paddock to be fenced.
With the assistance of some of Keith’s cousins they cleared and put up 50km of fence in four and a half weeks.
But no matter how hard they seemed to try, the effort and money being spent was not really getting them very far.
By 1995 breeder numbers amounted to only 279 and a decision had to be made. Either they had to sell the block or get up there and make things happen. They chose the latter.
Even then, Keith recalled that it seemed to take forever to get to 1000 breeders.
Lack of finance was an issue as the banks appeared to have little confidence in Sturt Plateau country.
Water was the next biggest issue as drilling was a one in three chance in those days.
But gradually things started to change.
Delivering on promises helped change the banks’ attitude toward lending.
Government supported research and applied science led to the development of underground basalt maps and embracing this technology greatly improved the strike rate of drilling for water.
With the land itself, there was no development on the Sturt Plateau when they started, no one to ask.
In the distinct wet and dry seasons where an early end to the wet could mean a long, tough year, the challenge lay in understanding nutrition and the essential role of supplementation.
When I spoke to Keith earlier this week he nominated two key success factors in bringing Sturt Plateau country into production: waters (and grazing distances) and lick supplementation.
Now, the hard yards have been put in and things have come together to the point that he considers the place to be pretty well ‘mickey mouse’.
This includes catching up on the last of the raking and cultivating of 2500 acres of country for improved pasture, an initiative Keith describes as making a real difference.
Accordingly when Roxie thought it was time to steady up a bit, Keith felt less inclined to let go but they decided to put it on the market and see what happens.
If it does sell they won’t have far to move.
Last year they bought Lionel Johnson’s 105,000 acre block Whyworrie to the north of Avago with 3200 cattle.
Keith and Lionel go back a fair way to Emerald saleyard days and the deal was very much an ‘old school’ handshake and no deposit. Keith said the solicitor just couldn’t get his head around that.
No doubt there are many other similar stories to that of Keith and Roxie in both the private and corporate spheres of pastoral development in northern Australia.
Their collective efforts over the last 20 years have led the quest to unlock untapped productivity and further advances in science and applied technology in combination with investment capital will inevitably continue that process.
Transparency in pricing
IN the current Australian environment of strident calls for greater transparency in pricing along the supply chain, the latest report from Steiner Consulting makes interesting reading in regard to the value of beef cutout information in the context of the US market.
For those not familiar with the concept it is nothing more than a calculated wholesale value of a given grade of steer or heifer carcass (e.g. USDA Choice or Select).
The wholesale value of individual primals are derived from prices received for composite muscle cuts and trim and these are rolled up into a single weighted average $/lb representation.
If Steiner is any guide, the main use of this information in the US is to draw comparison with the price paid for fed steers or heifers. In this way some conclusions are drawn about packer margins and what implications that might have for the market going forward.
The important point to all this is that the information per se does not influence packer margins and thus producer returns, it simply quantifies.
As Steiner points out, the recent increase in packer margins is due to supplies of fed cattle expanding at a much faster rate than packing capacity can adjust to.
However this transparency in information does not appear to have led to any greater levels of trust and understanding between producer and processor.
The animosity remains with producers blaming the monopolistic power of US packers for the wider profit margins.
