Last month’s surprise confirmation of 2070 slaughter cattle shipped to China by Landmark has emboldened the farm services company’s ambitions in the often-volatile live export trade.
While its stock marketing rivals Elders and Ruralco have either quit or scaled back their involvement in live exports, Landmark insists it has the patience, determination and deep pockets to expand its breeding and slaughter stock shipment activity.
Markets on its radar range from Eastern Europe and the Middle East, to Asia (particularly China).
As if to highlight its current agenda, Landmark International buyers have been busy at weaner cattle sales in Victoria in the past month.
Last week they snapped up about 750 steers in the 210 kilogram to 380kg weight range from an offering of 2700 mixed sex young cattle sold at Ballarat to help fill a second “Russian” shipment of light- to medium-weight cattle sailing from Portland later this year.
The latest order is apparently for a Black Sea region destination in about May.
Landmark buyers have been in and out of the market since the start of this year’s weaner sales when they swooped on about 1000 steers in Victoria’s Western District.
We have a big balance sheet. We can accommodate the various requirements this market can throw up.
Another new order for heifers to the former Soviet republic of Kazakhstan has also been mooted, although not necessarily linked to Landmark.
New managing director, Rob Clayton, said Landmark was looking to open up markets for breeding and slaughter stock and prepared to take a long-term view of the opportunities.
“We’re really excited about the live export market in general,” he said.
“We have a big balance sheet. We can accommodate the various requirements this market can throw up.
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“We’re looking at developing markets which may have been inaccessible previously because of the significant capital costs involved or other market access costs, like credit access.”
At a time when other players were steering away from committing to sourcing big numbers of feeder stock from the high-priced Australian market, Landmark was happy to fill any emerging gaps.
Tight times biting
Big livestock exporter Wellard confirmed early this month it was still struggling to make profitable headway from the Australian trade to feeder beef markets such as Indonesia and Vietnam.
It is now paying increased attention to servicing routes from South America while also chartering its ships to other traders.
Tight margins in near Asian markets, costly import protocols and lingering animal welfare debates around the live trade were some of the factors which convinced Elders to sell its long-running North Australian Cattle Company business last year, despite cracking the China export market with Australia’s first sea freight consignment of slaughter cattle.
Ruralco’s Frontier International business was restructured 18 months ago to cut costs as earnings slumped.
While our competitors have been moving out of the market, we believe it’s an important market to be in
Frontier is maintaining a “disciplined management of live export operations in light of tight domestic supplies and weaker demand” in the feeder cattle market.
But Landmark’s Mr Clayton was “very happy with the financial results we’ve been achieving” in what had been a flatter period in the trade.
“While our competitors have been moving out of the market – because it can be a high capital cost business – we believe it’s an important market to be in and it will bring more end users closer to our customers,” he said.
“Live export is just one function of our business where we see options to deliver more value to our clients’ operations.
“There are a lot of dollars involved in supplying the boat trade, so it’s worth trying to make the most of it.”
He noted the 2070 cattle sourced for the recent China shipment to long-term Landmark client, Xinmao, on January 28 initially involved sourcing almost 3000 steers for export consideration.
Cattle were shipped ready for processing to an abattoir in the northern port city of Huanghua, about two hours east of Beijing.
The consignment lifted the total number supplied by four Australian players in the past year to about 10,000.
Proven track record
Landmark International has been a regular exporter of breeding stock, particularly dairy heifers to China and Russia.
In recent years it has also sourced beef breeders, notably, Angus heifers, for markets such as Russia and Turkey, mostly shipped from Portland, and Fremantle in Western Australia.
Russia has also been a market for Dorper sheep.
Until 2016 the Landmark business was a joint venture partnership with the owners of another significant export breeder specialist, now known as Australasian Global Exports.
“While we’ve mostly been moving breeding stock, we look at whatever might be possible, including shared boat consignments,” Mr Clayton said.
“We think our network provides a strong case to source orders.”
However, at this point shipments to Indonesia were not on the company’s radar because sale margins were too low.
“We must compete for business on price because live sheep and cattle markets are commodity categories like any other, but we take a long-term view that live export is a good business area for us and the producers we serve.”