Branded beef company Stockyard has unveiled its multi-million dollar Kerwee Feedlot expansion with feed capacity raising to 20,200 head.
It appears the cheapest part of the new feedlot facility is the $8 million spend on infrastructure including new feed pens and upgrades to its feed mill. The largest outlay by the Kerwee Group will be buying Angus and Wagyu feeder cattle to stock the new feed pens with numbers set to grow by 9100 head by January next year.
Conservative estimates would mean Stockyard will invest an extra $16.9 million in both Angus and Wagyu/Wagyu-cross feeder weight cattle to fill the expanded feedlot capacity.
While Stockyard’s managing director Lachie Hart would not reveal the exact amount of money the beef business has spent on new feeder cattle, he noted it was a large investment.
It's been a big undertaking to find the extra cattle to put on feed, especially with where the EYCI price is at the moment and that’s a lot of money
“It's been a big undertaking to find the extra cattle to put on feed, especially with where the EYCI (Eastern Young Cattle Indicator) price is at the moment and that’s a lot of money,” Mr Hart said.
The expanded feedlot currently has 50 per cent 200-day fed Angus cattle and the remaining half is 400-plus day fed Wagyu/Wagyu-cross with more than 75pc of the Wagyu cattle on feed being F4 or more pure bred Wagyu types.
“The demand for our Stockyard brand has been increasing each year and we haven't been able to fully meet that requirement,” Mr Hart said.
“The feedlot expansion is not necessarily going to create any opportunities for us to expand into other markets.”
Currently, 90pc of all beef produced by Stockyard is exported overseas with only the remaining 10pc sold domestically.
Mr Hart added Stockyard is currently exploring some European markets because they are one of a few Australian branded beef businesses not exporting to the region.
“Hopefully, the negotiation of an EU and Australia free trade agreement starts before Christmas and delivers some good results for Australia,” he said.
“Diversification is an excellent risk mitigator and continuing to explore these markets provides great opportunity potential.
“It may mean we sell less to another market, but selling to a large variety of different overseas markets can provide more stability.”
Mr Hart said Kerwee Feedlot either expanded or started to lose customers.
Not quite ready
Despite the best laid plans, Kerwee Feedlot near Jondaryan is only running at 16,000 head of cattle on feed.
Stockyard general manager Lachie Hart said the original plan was for the feedlot to be at full capacity this week. The branded beef company’s facility is the oldest family-owned feedlot in Australia and has doubled its capacity from 11,100 to 20,200 head of cattle.
We're going to commission the new mill in a few weeks because we didn’t want to put anymore pressure on the existing feed mill until the upgrade was completed.
“We planned to have the mill upgrade completed by now but due to a few overruns we've kept it at 16,000 head,” Mr Hart said.
“We're going to commission the new mill in a few weeks because we didn’t want to put anymore pressure on the existing feed mill until the upgrade was completed.”
It's expected the feedlot will be full by January next year.
Mr Hart said times have never been better to be running an agribusiness.
“The megatrends have never been so strong, the population growth on Australia's doorstep in Asia and personal well is increasing across that region,” he said.
“The feedlot expansion was required to meet growing demand from the company’s award winning grain fed Angus and Wagyu beef, which is marketed under the Stockyard label.”