A Pilbara pastoral station is so confident in its wagyu cattle operations, it has earmarked funds that would turnaround a herd worth about $3 billion in the next 15 years.
- Pardoo Station is located in the Pilbara region on Western Australia
- The property is expected to run more than 100,000 cattle by 2035
- It is the first large scale wagyu herd for the northwest region
Pardoo Station is located about 120 kilometres northeast of Port Hedland and is owned by Singaporean businessman Bruce Cheung.
The 200,000-hectare property was purchased by Pardoo Beef Corporation in 2015 and has since made headlines for trailblazing in pivot irrigation systems that provide perennial pasture for a wagyu cattle herd.
It is a breed of cattle that only the bullish of producers would dare try in drought-prone country, with the region leaning heavily on Bos Indicus genetics which have resilient capabilities and are usually sold in the live export trade.
However, Mr Cheung said, after investing $75 million to-date into his stand and graze program, it would offset the traditional challenges and in return, produce beef of global class.
“So far, we have invested $75 million into Western Australia, which includes genetic farms, northern farms, and building the herd,” Mr Cheung said.
“If the region and government allow us to continue our journey, we are prepared to double that.
“The likely economic output of that in 15 years’ time would be worth $3 billion.”
Five years in the making, what do the cattle look like?
Four years ago, Pardoo was running 10,000 head of cattle. That number has already doubled and is expected to increase sixfold.
In 2019, University of Western Australia School of Agriculture senior lecturer and economist Elizabeth Petersen conducted research into the economic benefits of Pardoo Beef Corporation.
The report found over a 15-year period, the business would increase its stock numbers to approximately 123,000 head and shift the industry’s focus from Bos Indicus to primarily high-value wagyu breeds.
Mr Cheung said the company was on track to reach those numbers.
“We are currently at 22,000 head of cattle, out of which 8000 are pure breed, and the rest are crossbreed Bos Indicus animals,” Mr Cheung said.
“Moving further down the road, the mix will eventually be heavily pure breed, and then further purity of wagyu content in six to seventh generation.
“In the next 15 years, we hope to accomplish a herd size of 100,000 head of cattle.
“We need to build the infrastructure and provide the drought-proofing capability to ensure that goal will be accomplished in a steadily orderly matter.
“We have a difficult journey … a lot more difficult than I originally envisioned… COVID-19 in the middle doesn’t help but we are steadily and extremely close to the numbers that we have originally set out to do.”
Prices and markets
Mature wagyu males can weigh up to 950kg, and with the world-class marbled beef fetching up to $500 a kilogram at restaurants, the numbers start to stack up for Mr Cheung if he was successful.
However, Mr Cheung said prices ebb and flow.
“Like most breeds, wagyu has gone through cycles,” Mr Cheung said.
“There was a down cycle three years ago out east driven by oversupply of first cross F1 wagyu products that drove the price down.
“We are now in full recovery, but we are worried because the price shot up too quickly. I think as primary producers, we always want an uptrend, but a steady slow one, not a huge peak and valley.”
By 2028, Asia will represent 56 per cent of global meat imports, and with Mr Cheung’s longstanding presence in the region, he said he would bring Western Australia to the party.
“A portion of our product goes domestically, and a portion goes to some of the economies that are in full recovery from COVID-19,” Mr Cheung said.
“North Asia is doing quite well. However, we are very mindful about some of the challenges that other industries are facing in over-relying in one market.
“Currently, our biggest market is China, but we are scaling back in the amount of reliance in one market. It takes around 51 per cent of our product. We probably would move that number back to 33 per cent in 2022.
“We are also in markets such as Hong Kong, Thailand, Middle East, Singapore, Philippines, Korea, Japan, UAE, Saudi Arabia, and we are in talks with Indonesia.”
The Pilbara’s disparate climate means when it rains, it pours, and in a desert-like scenario, that, unfortunately, delivers a spike in locust populations.
About 30 kilometres north of the homestead, there are 20 centre irrigation pivots, where the fodder is grown to drought-proof the cattle.
But Mr Cheung said they were unable to go unscathed.
“We were not prepared in the early days, and we actually had a pretty bad hit about three seasons ago,” Mr Cheung said.
“We learned through very painful exercise, and it has set us back almost half a season.”
Mr Cheung said spraying was part of the management program.
“It is important not to spray on the pivots because it affects our cattle. We have to try to locate the larvae very early on in the rangelands,” Mr Cheung said.
“One thing we have to do on a seasonal basis now is to constantly to be on a cut and carry basis versus the normal stand and graze, where we have to cut away feed and store it, which also has its difficulties.”
Mr Cheung said staff shortages were the biggest challenge and admitted how difficult it was to recruit and secure long-term skilled workers in the Pilbara.
The future: ‘Kimbara’
Developing the northwest region as a global premium boxed beef player is where the future lies for Pardoo Beef Corporation.
Mr Cheung said if the region developed a feeding and processing facility, it would be a tremendous asset for northern producers.
“It would allow produces to change over from live cattle to a boxed beef industry.”
It is envisaged that a feasibility study on a northern abattoir would be conducted when 35,000 processing stock per annum are produced.
Mr Cheung said he hoped to bring pastoralists from across the Kimberley and Pilbara on the journey as a marketable product, possibly with the name “Kimbara”.
“We want to infuse about 40 to 50 per cent wagyu content to soften the northern Bos Indicus product so that it becomes a cost-effective, yet high-quality eating product that would compete with European breeds like Angus or Hereford,” Mr Cheung said.
“Hopefully in my lifetime, I would like to see this region globally famous, not only for its resources but a unique product that has great flavour, texture and has part of the wagyu combination to it.
“There is definitely a gap in the market to create something like that, and I hope to be one of the catalysts to make that happen.”