Australia: Wagyu on the menu as producers dish up $300m in farmland deals

Australian Financial Review | 30 April 2023

Wagyu on the menu as producers dish up $300m in farmland deals

by Larry Schlesinger

Australia’s leading Wagyu producers are betting on strong future demand for the premium beef product after spending over $300 million on prime grazing country in NSW and Victoria in the past 12 months – despite tumbling cattle prices.
In the latest deal, private equity-backed Stone Axe Pastoral has acquired the Moyhu Wagyu aggregation in Victoria’s King Valley from tax reform pioneer Bob Officer for about $25 million.

The acquisition comprises four parcels of land totalling 860 hectares and 1400 head Wagyu herd, of which 550 are full blood breeders (Wagyu cattle who show no evidence of cross-breeding and whose pedigree can be traced back to Japan).
The Perth-based operator manages a total full blood and crossbred Wagyu herd of more than 50,000 head. Its beef is sold to top restaurants in Australia and exported to the US, South Korea, China the Middle East and Asia.
Stone Axe managing director Scott Richardson said the Moyhu Wagyu operation and business would complement its existing Victorian operations.
“The acquisition for Stone Axe cements our strategy to become one of the largest and most sophisticated vertically integrated producer of ultra-premium Wagyu in Australia,” Mr Richardson said.
Ray White rural agents James Brown, Andrew Starr and Bruce Birch negotiated the sale of Moyhu Wagyu.
This deal follows the sale of $278 million of prime NSW grazing country to Wagyu farmers in less than a year. All these sales were negotiated by veteran rural agent Chris Meares of Meares & Associates.
The most recent of these deals was the 3645ha property Kentucky Blue and The Flags at Niangala in the New England region of NSW, which was acquired for $65 million (including 3000 head of cattle) by North Queensland farmer Adam Ian Rea.
Mr Rea, who is based at Aberfoyle Station, south-west of Townsville, also acquired another high rainfall New England property – the 2668ha Upton Farms at Niangala – last year for $88 million, including 4000 head of cattle.
Topping all of these deals, in November, Hunter Valley veterinary surgeon and businessman John O’Brien paid $125 million for the historic 11,300ha Plumthorpe aggregation in the Manilla River Valley in northern NSW.
“Our three major sales in the past nine months have all been to Wagyu breeders,” Mr Meares told the Financial Review.
He added that demand for breeding and backgrounding country for Wagyu had pushed up values in the New England and created a two-tier market for grazing country.
Stone Axe Pastoral and the Rea and O’Brien families join the country’s richest person, mining magnate Gina Rinehart, in expanding their Wagyu operations.
This wave of capital comes despite Wagyu cattle values tumbling around 30 per cent this year due to a combination of increased supply and reduced demand for premium beef, as higher interest rates and the sagging global economy takes their toll on consumer spending.
However, Australian Wagyu Association president Charlie Perry told an industry conference earlier this month that the longer-term outlook for the $2 billion-a-year industry was rosy because demand for Wagyu had grown beyond the small pool of “investment bankers with a black Amex cards” that had underpinned demand in the past.
“The Wagyu market now is too big to fail. There will be ebbs and flows, but I’m absolutely convinced that the overall size and longer-term direction of our market is heading in one direction – up,” Mr Perry said.
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