Branded beef company Stockyard unveiled its multi-million dollar Kerwee Feedlot expansion in November with feed capacity jumping to 20,200 head.
It appeared the cheapest part of the new feedlot facility was the $8 million spend on infrastructure including new feed pens and upgrades to its feed mill. The largest outlay by the Kerwee Group was buying Angus and Wagyu feeder cattle to stock the new feed pens with numbers set to grow by 9100 head by January 2018.
Conservative estimates would mean Stockyard invested 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 had 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 (Eastern Young Cattle Indicator) price is at the moment and that’s a lot of money,” Mr Hart said.
The expanded feedlot 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.”
A total of 90pc of all beef produced by Stockyard is exported overseas with only the remaining 10pc sold domestically. Mr Hart said Stockyard was exploring some European markets because they were 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.”