Nick Lenaghan, Australian Financial Review 26 January 2022
Packhorse Pastoral Company, a cattle and carbon play that is backed by Canberra Rich Lister Terry Snow, has taken its assets under management past $340 million with the acquisition of Ottley Station, in northern NSW.
The 8654-hectare spread northwest of Inverell, held by a local family and sold for an undisclosed price, is the first NSW property to be added to the Packhorse portfolio.
Packhorse, chaired by Hyperion’s Tim Samway, has been making waves since last year after it launched an agricultural investment fund with ambitions of raising $1.5 billion over five years to back a 2 million-hectare cattle grazing and carbon sequestration portfolio.
Driving the build-out of the portfolio is Geoff Murrell, chief executive of Pastoral, Packhorse Investments Australia, who said the Ottley Station acquisition was an opportunity for capital growth, land regeneration, carbon sequestration, while generating stable returns through cattle agistment.
The acquisition had to meet a series of criteria: properties located outside the tick line, a minimum 500 millimetre mean annual rainfall and a higher proportion of black clay soils that allow for the sort of regenerative farming practices Packhorse is implementing.
Mr Murrell told The Australian Financial Review: ”Part of the Packhorse strategy is the ability for us to mitigate risk in our portfolio through the geographic spread of the assets.
“This is the first one of those which is stepping towards property risk mitigation strategy.”
Packhorse will undertake water and fencing programs, while working on improving pastures and introducing more legumes in some parts of the property.
”Once we have done that, then the uplift we are going to achieve in carrying capacity [of cattle] is from around 4000 AE [adult equivalents]. We are going to be able to get in a two-year time frame up to 6000 AE. That will grow to about 7000 AE over a five-year period.“
In the first instance, investment into soil health through regenerative agriculture sets up a better environment for cattle rearing and breeding. But an increasingly significant spin-off to that is carbon sequestration and the generation of certified carbon credits.
Packhorse aims to achieve carbon-neutral status by 2028 and has partnered with Carbon Link on its carbon sequestration programs, including baselining all its properties.
Packhorse’s Lighthouse Station in Queensland, comprising 13,600 hectares, is the largest soil carbon project in the country currently.
Meanwhile, the price of Australian carbon credit units has surged past $50 per unit and forward contracts to 2024 are at $60 per unit, according to Mr Samway. When Packhorse launched its fund last year the price was at $16.
“The price is important but much more important is the total amount of the property that can be put under a carbon project,” Mr Samway said.
“We are very targeted at properties where we can apply the regenerative practices: get the grass cover, the green cover, which stores the carbon and then focus on those plants like legumes that really get carbon deep into the soil.”