HE MAY be relatively new to beef, and rely on others for practical know-how, but there is good reason those in the beef industry with entrepreneurial tendencies soak up every word philanthropist Harold Mitchell has to say.
The son of teenage saw millers from the small Victorian town of Trafalgar, Mr Mitchell pioneered the concept of media buying in Australia and built a digital advertising empire.
When it sold in 2012 for more than $600 million, it was number one in the world.
It had 4000 clients and accounted for the highest per capita advertising volume, outdoing even the Americans who are said to live and breath advertising.
Even before his advertising juggernaut went to Japanese owners, Mr Mitchell had turned his eye to cattle, applying the same philosophies and way of business that created his advertising enterprise.
The Western Australian beef operation he bought into in 2008 for $10m is today valued at $70m.
Remarkably, given the magnitude of his success in both industries, the 74-year-old paints his business strategies as quite uncomplicated.
Look to what the market wants, embrace Asia, think long-term and keep up with the latest innovations.
Speaking at last week’s Agribusiness Gippsland 2016 conference, in Warragul, Mr Mitchell said within a decade, the Indonesian economy would be double the size of Australia’s.
“We will be 17th in the world and Indonesia will be 7th,” he said.
“Asia will account for 50 per cent of the world’s middle class.
“Throughout history it has been the middle class that has been the reason for economic growth - Europe 200 years ago, it’s what built America and now it is Asia and it is on our doorstep.”
There are four things the middle class want more of, and better quality versions of, according to Mr Mitchell.
They are education, health, holidays and food.
“They want better food and we can supply it - not all of it but enough to give us another great one hundred years,” he said.
“I still don’t think Australian agriculture gets Asia enough.
“It’s ridiculous to be talking about free trade with the UK - what could we possibly hope to sell them when Asia is as big as all this?”
Mr Mitchell said the advertising world was talking about the potential of Asia in the ‘90s and it was the obvious growing demand for protein that made him look to the beef industry.
He bought into cattle via the 500,000 hectare Yougawalla Pastoral Company in the Eastern Kimberley, along with former Seven West Media director Doug Flynn and the Sale family.
It supplies the live export trade, mostly to Indonesia.
When the Indonesian live trade ban hit in 2011, their neighbours gave up so they bought two properties next door and Mr Mitchell increased his shareholding to 70pc.
Leases were also tied up with neighbouring Aboriginal communities and the enterprise today consists of 3.5m hectares, running 45000 head of mostly Brahmans.
From solar energy and submersible wells to mustering cattle by strategic water control and utilising drones, the operation is run on the principle of capitalising on technology advancements.
And fitting the market.
“Too many people have a business and say the market will have to fit the brand,” Mr Mitchell said.
“Instead, we should always ask ‘what do they want at the other other end’.
“Be ahead of the market in every way.
“They don’t want horns - we are moving towards poll genetics.They want quick growth, we are providing that.
“The Indonesian buyers want cattle with a certain look, we even cater for that.”
The other thing Mr Mitchell believes is critical in beef is scale.
And that requires long-term thinking.
“There is some room for the small boutique supplier but being in the middle is being nothing,” he said.
“In both cattle and advertising, being small means you can’t control anything. You need to be big to get anywhere.
“We will go through the usual price fluctuations but, if you are about the long-term, there is an unbelievably position future for cattle.
“It is a better way to invest than almost anything else in this, far better than the stock market.”
