December 2, 2024 • 28 mins
In this episode, the team unpack the intricacies of managing one of Australia’s largest feedlot operations with special guest, Ben Carrigan, the General Manager of Commodities, Farms, and Transport at Mort & Co. Australia. You’ll gain insights into the complex feed composition and innovative practices that set Mort & Co. apart. Ben takes us through their diversified business model that includes not only feed lotting and branded beef but also Mort & Co’s approach to turning effluent into granulated fertiliser, boosting soil health and creating new market opportunities.
With sustainable practices at the forefront Ben sheds light on the adjustments in cattle diets and procurement processes essential for maintaining their high standards. From their ambitious Predictor Plus program aimed at optimising herd management and reducing emissions to their commitment to significant carbon footprint reductions by 2030, this episode is packed with valuable lessons on balancing animal welfare, operational efficiency, and sustainability.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
G'day and welcome to Feed for Thought, a regular
podcast from Pioneer coveringeverything from farm systems to
crops and products and much,much more.
Speaker 2 (00:15):
Rightio, welcome back to Feed for Thought.
My name's Matt Delly and, asalways, I've got my mate Wade
Bell with me.
And today we're actually beingopportunists.
We're at a conference over inAustralia and we've managed to
ring one of the speakers, benKerrigan from Morton Co.
So, ben, thanks for joining us.
Thanks, boys, I'm actuallystill buzzing from your
(00:36):
presentation.
There's so much to take in, sonow we get to capture a little
bit on this podcast.
So thanks for joining us.
Your role is GM of farms,commodities and transport,
transport yeah, that's right.
Speaker 3 (00:48):
So, um, just looking after all the the commodity
inputs that come into thefeedlot, so risk management,
price risk management andprocurement of that, uh the
farming operations, so about3,400 hectares, uh dry land and
irrigation production.
Um, in the farms and transportside we have 45 trucks on the
road, so it's approximately ahalf livestock carry and half
(01:09):
tankers, so bringing molasses,oils, liquid supplements in and
out of our feedlots.
Speaker 2 (01:16):
So we've quickly gained a bit of knowledge that
there's quite a bit of scale tothe operation you're running
here.
So at this conference you'vejust come off a cotton
conference as well, with a quitea large delegation there, and
that's a large part of yourbusiness as well as the feed
side of things.
But feed is one part energy orthe utilization of fertilizer
(01:36):
and we'll get into that a littlebit later.
What's your feed makeup thatgoes into these, the feed lots,
I suppose yeah, so we um.
Speaker 3 (01:43):
So just if you look at our feed lots, if we probably
step back and just look at thefeedlots, I suppose, yeah, so we
um.
So just if you look at ourfeedlots, if we probably step
back and just look at thefeedlots in a whole, so we have,
uh one time holding capacity of107 000 head um in feedlots.
So it's across three sites.
We we do have one large onewhich is grass style, so that's
uh currently got about 78 000head of cattle in.
So if we're looking at thecommodities that go into that,
(02:04):
uh, it's about half a milliontons per year.
So it's generally about 60percent grain.
And then we step down intosilage is 12 to 15 percent.
So that's a mix, a mix of cornor maize and barley silage.
Yeah, so corn's probably 75percent of that.
And then from there we startstepping down into cotton seed
is a big component.
(02:24):
So that's that's got roughage.
Uh, it also has an oilcomponent plus protein in it.
So uh, that's why we use cottonseed.
And then from there it's justwe step down into a lot of the
micro elements, which ismolasses, liquid supplements, uh
, hay um and hulls just roughagesources as well from there.
Speaker 1 (02:42):
So is the the feedlot business, that ispiece, if you
like.
Was that you know?
If you go back in time, or thehistory of the business you know
, is that how it started out?
Speaker 3 (02:51):
Absolutely yeah.
So that's a core component.
So Charlie Mort started thebusiness and he was just looking
to innovate the way feedlottingwas done.
So he's come in and over timehe's built into different
feedlots to build it to where itis today and feedloty will
always remain the core part ofmorton co's business.
But from there we've justlooked at where we can diversify
both up and down the supplychain and create any synergies
(03:13):
we can from that yeah, so if youwant to give us a summary there
, so you've got transport inthere.
Speaker 1 (03:17):
Fertilizer, you want to rhyme off the?
The various components of thebusiness yeah, yeah.
Speaker 3 (03:22):
So transport is one, and then we also have branded
beef.
So we've got five differentbrands of beef.
So ours are really looking atprobably the more high-end
products.
We're looking at long-fed Wagyuand long-fed Angus,
predominantly into exportmarkets.
So we're looking through Asia,a little bit into the US as well
, so there's that component.
Then we've got fertiliser.
(03:43):
So where we're converting thecattle manure, which is
traditionally a waste productcoming out of the feedlot, we're
actually taking that through afull granulation process.
So we're composting that downover 14 weeks and then we take
it through a granulation.
So the end result is afertilizer that has the same
physical characteristics as asynthetic.
So you're looking at mop ureasame physical characteristics of
(04:05):
that and something that we canreally use as a synthetic.
So you're looking at MOP ureasame physical characteristics of
that and something that we canreally use as a complementary
product.
So the whole idea of that is islooking to value add but also
open up our market.
A traditional manure marketprobably is within 50 kilometers
.
For farmers they're spreadingit on anywhere from five to ten
ton per hectare and what we'relooking to do is really change
that approach and be able toopen up markets hundreds of
(04:27):
kilometres away and where peoplecan apply it directly with
their seed or in anotherfertiliser blend, just looking
at nutrient use efficiency andthe whole sustainability piece
around that as well.
Speaker 2 (04:38):
Dive into it a little bit, because we're on that.
You talked about the porosityof it and the water holding
capacity a lot different to oursynthetics, I suppose and and
the fact that, well, the abilityto have a positive effect in
the, in the soil yeah.
Speaker 3 (04:52):
So like it's, we can kind of call it a soil amendment
.
I think everyone generallyknows the benefits manure can
offer to soil.
Uh, what we're looking to do isput that in a really targeted
approach.
So, generally, with the seed,where we can is the best thing.
So, and how the granule worksis, uh, it's got 34 percent
porosity, um, and it's reallyhigh in carbon, so it's roughly
(05:14):
30 percent carbon.
So what what that enables is itacts.
It actually acts in a differentway as well.
It's so it'll swell, so itabsorbs moisture and swells and
then, when it dries out, itcontracts and releases that back
to the environment.
As part of that process there'sa leachate, so releasing those
micronutrients.
So humic acid's a really bigone.
It's roughly 10% humic acid,but it also releases the
(05:37):
synthetics that dissolve.
When it's taking the water in,it'll absorb those synthetics
with it.
It's got a high CEC, so it canactually attach to it and then
it releases that back out intothe soil.
So it's a different mode ofaction and it's something that's
looking to really be acomplementary product to
synthetic fertilisers ratherthan a direct replacement.
Speaker 2 (05:54):
Yeah, interesting picture of actually a seedling
with its roots actually growingthrough the compound as well.
Speaker 3 (06:02):
Yes, we treat it as like it's a food's, it's a food
source, it's got a home.
We're also looking at otheravenues.
So the granules themselves.
I can actually absorb a lot ofwater, um.
So we're looking at as asynthetic fertilizer but where
we're seeing a lot of researchcoming from external parties is
actually using the granule as acarrier.
So we're looking at differentchemistry we can put on it, but
also biological.
(06:22):
So we're looking at differentchemistry we can put on it, but
also biological.
So we're looking at differentbiostimulants to really promote
microbial activity in the soil.
So we're seeing significantuplift in the initial round of
testing done on that, which isfascinating.
We're actually seeing that godown with the roots through the
profile as well.
So that's that avenue.
And the other one we're lookingat is, again, it's all around
nutrient use efficiency.
(06:43):
But it's about pulses inAustralia.
So pulse crops like faba beans,chickpeas, those type of crops
Traditionally the seed is coatedwith a rhizobia inoculant.
What we're looking to do isactually make the fertilizer be
coated.
So the reason is the seed has arhizobia on.
The seed traditionally hasabout a 24-hour life cycle and
(07:04):
then it's non-viable becauseit's a living organism, yeah,
whereas if we can coat it on thegranular.
We're showing shelf life of upto 30 days.
So it's just an application.
Farmers can have this pre-doneor done externally and then
they're just putting it downwith the seed and it's one less
operation they have to dothemselves and we know we're
getting viable results.
The initial rounds of testingwe've done is like the
nodulation and these pulse cropsis anywhere from one and a half
(07:26):
to two times better than thetraditional approach.
So straight away we're puttinga lot more end back into the
soil.
Speaker 1 (07:31):
Yeah, uh certified organic or it is certified
organic, yeah, australian.
Speaker 3 (07:36):
So, um, we're running three different products at the
moment.
So the first one is just whatwe call terrace um, it's a
straight organic compostedfertiliser granulated.
The second one's Terrace Pro.
It's 85% compost, 5% blood andbone, 5% chips and 5% sulphate
or potash.
And then the third product iswhat we call Gyptek, so it's 50%
manure, composted manure, 50%gypsum, and we are looking at
(07:59):
other trace elements we canbring into different blends as
well.
Yeah, depending farmersrequirements and soil
constraints can we circle backaround?
Speaker 1 (08:07):
to the farms yeah to the, to the uh, to the feedlot,
because they like uh.
You presented some fascinatinginformation there.
You know, in terms of you knowthe, the breakdown of the, the
cattle and and the kind of thegrowth rates and the feeds.
Can you, can you just elaborateand share a little bit about
that business, part of thebusiness and what sorts of
things you're doing in that area?
Speaker 3 (08:26):
so we're really we're running I guess three different
feed programs through the feedlots.
There's short fed, there's kindof two leagues to that, but say
short feds, traditionally 100to 110 days on feed.
So it's just cattle where we'rereally trying to hit with a
high energy diet.
We're trying to get them in andand put as much weight on them
as we can quickly and then westep into our angus cattle so
that's a mid-fed range we'd say150 to 200 days on feed.
(08:49):
So that actually does form intoone of our in our beef brands
as well.
And then we start looking atthe real high-end wagyu products
.
So we're taking those anywherefrom three to four hundred days
feed.
So that's really concentratingon marbling for that one.
Yeah.
Speaker 1 (09:04):
And so high energy feed.
So you talked a bit earlierabout I think you said 60%
grain-based, if I've got thenumbers right.
So what do those dietstypically look like at different
stages and sort of how muchenergy you're trying to pack in
and what sort of growth ratesare you getting on the back of
that?
Speaker 3 (09:20):
Yeah.
So if you just look at probablynet energy gains, probably the
good one um.
So on a wagyu one, it's aslower growth, more marbling
focus, so lower energy.
So that might be kind of 1.25times and in in the ration, then
we're moving right through toprobably 1.55 times.
On neg for um, for the shortfed, yeah, so like short fed
would be, targeting over twokilos a day is what we're trying
(09:42):
to put on, put on there, sohigh energy diets.
But we've really got to look atour mix of commodities.
So it's a it's a very lowmargin, high volume game.
So we're constantly looking atdifferent commodity mixes.
That is going to give us thebest return Ultimately.
Speaker 2 (09:56):
You made mention of a change in diets as well, with
temperature as well, so youdon't want to cook them.
Speaker 3 (10:00):
Yeah.
So in Australia where we canget, especially in Queensland,
we can get that high heat insummer so we get significant
days over 40.
So it's not just a straightheat, it's when it aligns with a
heat event that's got humidity.
If there's a storm that createshigh humidity at night but also
they're not getting thatcooling effect at night, so what
it's got it's accumulated heatunits over time.
(10:21):
So we've really got to monitorthat and if we see a significant
event come in, we'll look tochange the cattle's diets to
drop them down.
So if they're on a high energydiet so heavily wheat focused,
we'll look to take them off thatbring them back into more
silage, probably bring morebarley in just to try and cool
them down through that heatperiod.
Speaker 2 (10:39):
Scrolling back a little bit to the scale of the
place, head of animal and theturnover, because you also
mentioned, there's quite a lotof scope within the business
going forward.
Speaker 3 (10:48):
Yes, the current capacity is 107,000 head and
we're turning off approximately240,000 head of cattle a year.
Growth wise, we are looking atexpansion.
So we've got two real optionsat the moment.
Grassdale, our main feedlot, isthat build capacity so we've
got it fully built out to uslicense capacity and it's capped
out at a site.
Yeah, our two other smallfeedlots we do have room to grow
(11:11):
there.
So we've we can probably extendthose both of those out by
about no total would be 35,000head.
And then we are looking atanother feedlot up in central
queensland, so about an hourwest of rockhampton, so that
would be, um, that would beapproximately 40 000 head on
feed.
So that's a complete creedfieldsite, yeah, where we'd look to
come in and develop that as areally modern, efficient feedlot
(11:33):
.
Speaker 1 (11:33):
So, looking at every bit of water motion we can
through that yeah, and where arethe cattle uh coming from and
what's your kind of procurementsort of process and you know who
you're dealing with to actuallyget those sort of numbers,
because you've got somephenomenal number that you, that
you need every day or everyweek yeah, so our weekly
turnoff's about um so four and ahalf thousand head so coming in
and out.
Speaker 3 (11:52):
If you're looking at where we're sourcing from, it's
a big area.
So we're pulling anywhere fromnorthern queensland right down
to victoria, depending on thecattle mixes.
So it's a big one.
And how we do that we'redealing.
98% of our cattle are comingdirect from farmers.
So we look at our long-termproduction results.
We're getting from differentfarmers and we really try and
target those that have given usa positive return and run a
(12:14):
really good genetics but also areally good operation from feed
management as well.
Speaker 2 (12:17):
Yeah, and you talked about a program program, uh,
that more than co have.
Was it predictor plus?
Speaker 3 (12:23):
predictor plus.
Yes, it's a program buildinghouse.
So what we're looking at thereis we're really looking to
maximize um herd management, butit's also looking at the
emissions through the supplychain um.
So what?
What it is is it's got all thethe genotypes of all different
cattle breeds.
You can start putting yourindividual crosses into it and
it'll just show show theirenergy requirements through
(12:44):
their life cycle, as they'regrowing right through, as
they're reproducing, but alsolooking for growth.
And then over the top of that wecan overlay that with pasture
kind of known pasture resultsfrom different components in
australia, and with that alsocomes emissions.
So we've got emissionsintensity by area.
And then what we're doing fromthere is farmers are actually
sending their dung samples inand we're testing that and
(13:06):
looking at what energy isactually in the dung.
And then from there you can geta good, good gauge of what the
cattle are using um or whatthey're lacking in their diet
and overlay that with thepasture requirements.
We can see when they're whentheir seasonal demands or the
seasonal shortfalls, more so inin feed, and that's when we can
really start targetingsupplementary requirements and
and looking to go earlier andlonger, yeah, for a similar cost
(13:29):
, but really maintain that thatcattle and and that reproductive
rate, so if we're dropping thatdown, the reproductive rates
are off, so straight away theiremissions intensity goes up.
Yeah, but the other, the otherinteresting part is is we can
from that we can actuallyproduce an emission emissions
intensity report we can handback to the farmer.
Speaker 2 (13:46):
Yeah, as well, and so this is for the 98, that's what
you're saying for those thatare supplying you guys yeah,
we're just looking to roll thisas a separate product.
Speaker 3 (13:55):
Um, obviously we'd love all of our producers to
take it up, but it's somethingthat's available, yeah, in the
market.
Speaker 1 (14:01):
Well, You've talked there a little bit about the
emissions intensity reporting.
Where is that being used or howis that adding value?
What other parts of thebusiness are using that on?
Speaker 3 (14:11):
Yeah, so we're producing a sustainability
report every year.
It's a key part of what we'redoing, but we're really looking
towards 2030, so that's a targetthat's been set in Australia.
So we've got some mandatedlevels in kind of 27, 28.
We have to start reportingscope one, scope, two ambitions,
and then eventually it willlead to scope three.
So we're getting a lot ofsignals from the top-down
approach being like end users,like supermarkets, offshore.
(14:36):
But we're also seeing investors, banks, also pushing for that
target.
People are wanting to knowwhat's your plan by 2030?
How are you going to reduceyour carbon or emission
footprint globally?
So we've got to look at whatwe're doing.
It's one thing that we don'twant it to be mandated.
We really want kind of thecorporate world to drive that,
(14:57):
and that's kind of what we'relooking at.
The carrot's much better thanthe stick, but I don't think
it's going to be premium focused.
It's really going to be marketaccess.
So I think if you're not, ifyou're not on that bandwagon,
you're going to have limitedmarkets, which will ultimately
lead to diminished returns.
Speaker 2 (15:10):
It's quite a pleasing way and I almost immediately
said afterwards because it's alot of the rhetoric that we're
seeing or communicating in thein the New Zealand dairy market,
so quite encouraging that it'sthroughout all businesses and
you guys are delving right intothat.
Speaker 3 (15:25):
Yeah, and a big one is we've got to look at
emissions intensity.
So we're not looking at it over.
We've got to try and bringeverything back to emissions per
kilo of beef produced or kiloof meat or per ton of fertilizer
that we're producing.
That's how we're looking at it.
Speaker 1 (15:40):
Someone raised a really good question in the
conference and it was about howfar does your reach extend?
We talk about scope three.
Would that eventually reachinto the suppliers of beef
animals, so where you'reactually sourcing them from, and
actually those farmers auditingtheir kind of emissions profile
and then supplying that to youand then that becoming part of
(16:03):
your value chain?
Absolutely.
Speaker 3 (16:05):
When you look at our scope, three emissions for us
it's a very significant portionof the total emissions in the
supply chain come at theproducer level.
Yeah, so we have to be workingwith them, because that's going
to be a key component.
We can control what happens inthe feedlot, but we also need to
be able to work with producersto reduce their emissions at the
production level.
Speaker 1 (16:26):
And that tool that Matt mentioned, predictor Plus,
is just one of those mechanismsto sort of help, measure and
refine and basically just drivesome of those efficiencies.
Speaker 3 (16:37):
Absolutely yeah, and it's looking at profitable
returns for a farmer as well.
Like what can they changewithin their mix to increase
profit but also reduce emissions?
Yeah, nice.
Speaker 2 (16:46):
What are some of the challenges going forward for you
?
You mentioned a little bit andprobably had it over the years
around perception, but what arethe challenges for Morton Co
going forward?
Speaker 3 (16:59):
Oh look, they're significant.
We're no different than anybusiness, so we're like it's a
high volume, low margin game.
So we've always got to look atthose.
Small things are very importantto us from a costing
perspective.
We've got to be efficient.
So, like energy, energy is onearea we've got to really focus
on, but it's really just aboutmanaging what we can do and it's
(17:20):
just trying to have continuity.
For us, there's always going tobe challenges with emissions,
with regulatory requirements orin effluent management, all
those things.
Yeah, so we've got a lot ofthings to focus on.
When you're dealing with animalwelfare, there's always a lot
there.
So that's our first andforemost.
But for us, it's people.
They're our number one asset,so we have to look after them,
(17:43):
and then the rest of those otherones will, because there's 300
staff yeah 300 plus staff acrossthe whole site.
So yeah, significant number ofpeople and sorry we should have
covered this at the start.
Speaker 2 (17:53):
1997 was it when the business started?
Yeah, Charlie Moore started it.
Speaker 3 (17:58):
yeah, so he came and just looked at a kind of an
innovative way to look at thefeedlot space and change it up a
bit from how others were doingit.
Speaker 2 (18:06):
Massive growth.
Look at the feedlot space andchange it up a bit from how
others were doing it.
Speaker 1 (18:08):
Massive growth, yeah, massive growth with uh you just
briefly touched there on that,on the animal welfare you know I
think about in new zealand.
You know we're very sensitiveto to animal welfare, like I
guess many countries are is that, is that a a major threat?
And you know what?
What are some of the thingsthat you do in terms of how you
manage that those feedlots,because they are hugely
intensive, obviously?
Yeah, so kind of how do youmanage those feedlots because
they are hugely intensive,obviously, so kind of how do you
(18:29):
manage those to ensure reallyhigh standards for animal health
and low death rates and allthose, yeah.
Speaker 3 (18:36):
So biosecurity is number one for us, so that's the
key focus we've always got tohave.
But outside that, like we havea lot of people, so every cattle
that comes in, they're inducted, they're given a health check
on the way in.
Of people.
So every cattle that comes in,they're inducted, they're given
a health check on the way in.
And then we have pen ridersevery single day going through
every pen if there's any, any,cattle, what's a pig rider?
so just a person, a personmoving through yeah, okay,
scouting around through the pens, um, and if there's any, any
(18:58):
animals at all that show anysign of sickness, so we'll pull
them out and actually take themto what we call the hospital bay
.
Yeah, so we've got we've gotisolated one, but also where we
can really monitor them closely.
Yeah, so a key focus, obviously, animal health and low
mortality rates.
We've got extremely lowmortality rates and we're
looking at that constantly.
Speaker 2 (19:18):
I suppose that comes into wastage and emissions as
well, doesn't it yeah?
Speaker 1 (19:22):
Just moving a little bit away from the feedlot.
So you've got 3,400 hectares ofyour owned farmland.
So what's the sort of summary?
So that's just a massivecropping platform.
What do you do with that?
Speaker 3 (19:34):
Yeah, so if we look at that 3,400 hectares 900 of
that's irrigated, so it's acrosstwo different cropping
properties.
So a key component of that ismanaging the effluent.
We obviously capture every bitof runoff from the feedlot into
effluent ponds.
We then look to use that backon our cropping land.
So we're we're mixing that withfresh water that we capture on
farm through through stormevents, so we're mixing that
(19:56):
back onto crops.
So it's opportunity havingirrigation in australia because
our climate's so much morevariable and arid as a whole
compared to new zealand.
So that water is a greatbenefit.
But it also does providechallenges with the effluent.
So it's a high salt load levelsand we also we have to be
managing effluent water in highrainfall events.
So a crop will already be wetfrom the rainfall event in wet
(20:20):
years and we may have to go onand keep pushing that irrigator
across as the manage effluent.
Speaker 2 (20:25):
And irrigation land, like all those irrigators
getting influence?
Or is it only a proportion thatwe'll actually see?
Speaker 3 (20:32):
Only a portion.
So we always have a crop in theground at any given point.
So we're rotating betweensummer and winter.
So traditionally where ourfeedlots are located, summer
crops would be probably 60%summer crop dominated, 40%
winter crop.
But we're looking, we grow avariety of crops.
So if we look summer we'regrowing cotton, sorghum or milo,
(20:53):
we're growing corn silage, wecan grow mung beans, so they're
probably the four predominantones.
And then winter winter cropping.
We can look at wheat barley.
We've got legumes a favourbeans, chickpeas.
We can also grow canola.
We've got legumes of faba beans, chickpeas we've got.
We can also grow canola.
We've got small areas of thatthis year as well.
So we're always looking to havea crop in the ground.
But it's very much treatedcommercially, complete arm's
(21:14):
length.
So we're looking at commercialresults as a business as a whole
.
So if we're growing highprotein grain, we don't need
that in the feedlot, so we'llsell that externally and just
buy in a feed source for growing.
Speaker 2 (21:26):
So some interesting conversations between some of
the team.
Then as well, I happen to sitacross both areas.
Speaker 3 (21:32):
You have to choose.
Which hat I put on?
Speaker 1 (21:35):
You've just got to manage the boxing match between
the two entities.
So how large a portion doesthat owned support, block
support in terms of the feed?
How much external feed do youhave to go?
Our own production is tiny.
Larger portion does that, uh,owned support, block support in
terms of the feed, like how howmuch external feed do you have
to go?
Speaker 3 (21:50):
our own production is tiny in comparison.
Yeah, so we're broad.
Broad numbers is probably abouthalf a million tons of feed
commodities a year.
Yeah, bringing in yeah, yeahsignificant.
Speaker 2 (21:59):
There's something like 175 trucks a week or
something that carry yeah,that's just commodities.
Speaker 3 (22:05):
Yeah, yeah, yeah.
So that's working on roadtrains, so 50 tons at a time,
yeah it's something like a solidstick in new zealand would be
this time yeah if you, if you gothrough the different
businesses.
Obviously we've got the feedlots, the core and then.
So we've gone through thetransport, we've gone through
the fertilizer.
We also have a cotton seedcrush, um.
(22:25):
So where we can bring rawcotton seed in, we de-hull it,
so take the external coat offand then we're left with the
meats.
We then take that through anextrusion process and we're able
to generate oil.
And with that oil we canactually take it through the
first stage of refining just toremove the phosphorus gum, and
then from there we don't do it,but we can potentially sell it
to someone in australia thatwould refine that one more step
(22:48):
and then it's used as a cookinggrade oil.
So that's that, and then the uh, the other byproduct out of
that process is is cottonseedmeal.
So very high source of protein.
It's about 50, 52 protein andthat.
So again, external sources, wecan sell that or, worst case, we
can use all of that in ourfeedlot in the ration as well.
We We've got that.
We've got power generation.
(23:08):
So we've got three gas-firedgenerators at site so that
drives a large component of ourenergy production.
We're looking to expand thatwithin the next 12 months,
because you said that you'revery close to gas fields.
We are yes.
Speaker 2 (23:21):
And that's how you get that low-cost energy.
Speaker 3 (23:22):
Yes, yeah, yeah, so that's that.
So we've got a pilot lysineplant in at the moment, so
that's getting sorghum and we'llbe producing lysine, so kind of
that's amino acid we can use asan additive anywhere else.
So we've got that component aswell.
Yeah, so very diversifiedagribusiness.
Yeah, I was going to say whatare you?
(23:44):
Not doing yeah.
So we're basically just lookingat anywhere um up or downstream
of the feed lot where we we canadd value in that supply chain.
Ultimately, that's what we'lllook at.
Speaker 1 (23:52):
Yeah, um, someone raised the, uh the question
again in the conference about uh, you obviously are still doing
a lot of cattle, uh getting intoabattoirs and, and you know,
kind of owning that space, anyany interest in developing in
that area or not?
Speaker 3 (24:05):
really look, not at the moment, no, it's not, it's
not a key, key aspect for us.
So it's a pretty highlyspecialized industry, that one,
yeah, so we're just kind ofhappy we've got, we've got
reasonable contractualarrangements with a couple of
different suppliers and happyjust to keep it that way.
Speaker 2 (24:19):
Yeah, um, we'd have some, some partnerships,
especially around the meat sidewe look at through there, and so
for contracting there and forcontracting feed is a large part
of what you're doing yeah, notso much the meat, so I'm not
over the cattle but feed, yes,um.
Speaker 3 (24:33):
So we've got to look at at price risk management.
So we've got various tools wecan do.
Obviously, buying a graindelivered is the easiest one,
yeah, um, when we think it'sfavorable, or if not, we've got
different hedging opportunities,whether that's onshore in
Australia through, like ASXgrain futures track contracts.
We can also look at Chicago orEuropean grain futures as well
(24:54):
on that side.
So just looking to hedge ourpricing.
So I think one of the slides Ishowed was just our ration cost
over time.
So we've seen prettysignificant increases in that.
We've seen grain pull back inAustralia as it is globally at
the moment, with these wholerecession fears that are
floating around and generally adecent world supply of feed
grains, so we've seen a pullbackthere.
(25:16):
But it's not just grain, it'severy commodity that's really
driving that.
So we've seen just as inflationbites, the cost is moving up
across the board.
So, just looking to minimisethat wherever we can.
Speaker 1 (25:27):
Yeah, has that squeezed the margin even tighter
?
You say it's a low margin game,um, and you know your rising
ration prices.
That really squeezed thatmargin even even more in the
last three or four years?
Speaker 3 (25:38):
oh, it has.
And I think if you look at oneof the other slides I put up
just on cattle price, so I'veexperienced huge volatility.
So we came out of the droughtthe kind of the biggest drought
in 100 years in Australia.
It was a three-year one andcattle numbers were really low.
Producers had to sell just tokeep them alive.
And then on the back of thatwhen everyone started to restock
so chasing female numbers thatreally started to push cattle
(25:59):
prices and we went to historiclevels.
It was huge.
On the back of that we've comeinto restocking and finished,
and then we'd see the wholedownstream meat supply chain
really tighten, especiallyoffshore.
So as disposable income startedto get tighter, as inflation
ran right, people slowed theirconsumption of meat, especially
high-end meat, and then on theback of that they've just kind
(26:20):
of bottlenecked the supply chaina bit and we've seen cattle
prices really come offsignificantly.
So we had record highs almostdown too.
When you look at inflationadjusted over time, it's kind of
right down in the fifth totenth percent also.
Speaker 2 (26:34):
Yeah, so very volatile.
Yeah, Do you look to changeyour product marks in terms of,
say, Wagyu, for instance?
Does that start to change interms of how much you're going
to start processing?
We can but the big thing with.
Speaker 3 (26:46):
Wagyu is.
It's such a long process sothey're three to four hundred
days on feed, so it's very hardto be reactionary to market.
You've only got to stay in thatmix and take it over time and
just look at the manage.
Speaker 1 (26:57):
We can ultimately adjust our numbers, but it's a
component we're always going tohave, I guess, a bit of movement
between those depending onwhere the margins are and the
timing of selling.
I assume you manipulate thatfairly regularly.
Speaker 3 (27:15):
Oh, we do.
Yeah, we're very much looking.
So as cattle are exiting, youcan always look at what you're
replacing them with and changeit next to what you see is the
most profitable at the time.
Speaker 2 (27:23):
Yeah, yeah, I think you've done pretty well to
encapsulate what Morning Codedoes and the journey, I suppose
the cool new ventures that youguys are going into.
And thanks for sharing whatwe're seeing is the similarities
, I suppose, in the emissionsspace with the dairy market.
So thanks for jumping on.
I know we've kind of ripped youstraight out of the conference
(27:43):
and chucked the microphone andearmuffs on top of you.
So thanks, ben Ben, for joiningus.
It's been a pleasure having youand we'd love to do this again,
actually because there's somuch to your business.
Speaker 3 (27:52):
Yeah, no, I'll thank you for the opportunity.
It's been great Appreciate it.
Speaker 2 (27:56):
And thanks, wade, again, and for our regular
listeners, make sure you likeand subscribe so that we push
this podcast further and wemight be able to go even further
than Brisbane Australia.
So watch out this space.
We'll talk to you next time,and thanks for waiting myself.
Cheers, ben.
Speaker 3 (28:12):
Thank you Thanks.
G'day and welcome to Feed for Thought, a regular
podcast from Pioneer coveringeverything from farm systems to
crops and products and much,much more.
Speaker 2 (00:15):
Rightio, welcome back to Feed for Thought.
My name's Matt Delly and, asalways, I've got my mate Wade
Bell with me.
And today we're actually beingopportunists.
We're at a conference over inAustralia and we've managed to
ring one of the speakers, benKerrigan from Morton Co.
So, ben, thanks for joining us.
Thanks, boys, I'm actuallystill buzzing from your
(00:36):
presentation.
There's so much to take in, sonow we get to capture a little
bit on this podcast.
So thanks for joining us.
Your role is GM of farms,commodities and transport,
transport yeah, that's right.
Speaker 3 (00:48):
So, um, just looking after all the the commodity
inputs that come into thefeedlot, so risk management,
price risk management andprocurement of that, uh the
farming operations, so about3,400 hectares, uh dry land and
irrigation production.
Um, in the farms and transportside we have 45 trucks on the
road, so it's approximately ahalf livestock carry and half
(01:09):
tankers, so bringing molasses,oils, liquid supplements in and
out of our feedlots.
Speaker 2 (01:16):
So we've quickly gained a bit of knowledge that
there's quite a bit of scale tothe operation you're running
here.
So at this conference you'vejust come off a cotton
conference as well, with a quitea large delegation there, and
that's a large part of yourbusiness as well as the feed
side of things.
But feed is one part energy orthe utilization of fertilizer
(01:36):
and we'll get into that a littlebit later.
What's your feed makeup thatgoes into these, the feed lots,
I suppose yeah, so we um.
Speaker 3 (01:43):
So just if you look at our feed lots, if we probably
step back and just look at thefeedlots, I suppose, yeah, so we
um.
So just if you look at ourfeedlots, if we probably step
back and just look at thefeedlots in a whole, so we have,
uh one time holding capacity of107 000 head um in feedlots.
So it's across three sites.
We we do have one large onewhich is grass style, so that's
uh currently got about 78 000head of cattle in.
So if we're looking at thecommodities that go into that,
(02:04):
uh, it's about half a milliontons per year.
So it's generally about 60percent grain.
And then we step down intosilage is 12 to 15 percent.
So that's a mix, a mix of cornor maize and barley silage.
Yeah, so corn's probably 75percent of that.
And then from there we startstepping down into cotton seed
is a big component.
(02:24):
So that's that's got roughage.
Uh, it also has an oilcomponent plus protein in it.
So uh, that's why we use cottonseed.
And then from there it's justwe step down into a lot of the
micro elements, which ismolasses, liquid supplements, uh
, hay um and hulls just roughagesources as well from there.
Speaker 1 (02:42):
So is the the feedlot business, that ispiece, if you
like.
Was that you know?
If you go back in time, or thehistory of the business you know
, is that how it started out?
Speaker 3 (02:51):
Absolutely yeah.
So that's a core component.
So Charlie Mort started thebusiness and he was just looking
to innovate the way feedlottingwas done.
So he's come in and over timehe's built into different
feedlots to build it to where itis today and feedloty will
always remain the core part ofmorton co's business.
But from there we've justlooked at where we can diversify
both up and down the supplychain and create any synergies
(03:13):
we can from that yeah, so if youwant to give us a summary there
, so you've got transport inthere.
Speaker 1 (03:17):
Fertilizer, you want to rhyme off the?
The various components of thebusiness yeah, yeah.
Speaker 3 (03:22):
So transport is one, and then we also have branded
beef.
So we've got five differentbrands of beef.
So ours are really looking atprobably the more high-end
products.
We're looking at long-fed Wagyuand long-fed Angus,
predominantly into exportmarkets.
So we're looking through Asia,a little bit into the US as well
, so there's that component.
Then we've got fertiliser.
(03:43):
So where we're converting thecattle manure, which is
traditionally a waste productcoming out of the feedlot, we're
actually taking that through afull granulation process.
So we're composting that downover 14 weeks and then we take
it through a granulation.
So the end result is afertilizer that has the same
physical characteristics as asynthetic.
So you're looking at mop ureasame physical characteristics of
(04:05):
that and something that we canreally use as a synthetic.
So you're looking at MOP ureasame physical characteristics of
that and something that we canreally use as a complementary
product.
So the whole idea of that is islooking to value add but also
open up our market.
A traditional manure marketprobably is within 50 kilometers
.
For farmers they're spreadingit on anywhere from five to ten
ton per hectare and what we'relooking to do is really change
that approach and be able toopen up markets hundreds of
(04:27):
kilometres away and where peoplecan apply it directly with
their seed or in anotherfertiliser blend, just looking
at nutrient use efficiency andthe whole sustainability piece
around that as well.
Speaker 2 (04:38):
Dive into it a little bit, because we're on that.
You talked about the porosityof it and the water holding
capacity a lot different to oursynthetics, I suppose and and
the fact that, well, the abilityto have a positive effect in
the, in the soil yeah.
Speaker 3 (04:52):
So like it's, we can kind of call it a soil amendment
.
I think everyone generallyknows the benefits manure can
offer to soil.
Uh, what we're looking to do isput that in a really targeted
approach.
So, generally, with the seed,where we can is the best thing.
So, and how the granule worksis, uh, it's got 34 percent
porosity, um, and it's reallyhigh in carbon, so it's roughly
(05:14):
30 percent carbon.
So what what that enables is itacts.
It actually acts in a differentway as well.
It's so it'll swell, so itabsorbs moisture and swells and
then, when it dries out, itcontracts and releases that back
to the environment.
As part of that process there'sa leachate, so releasing those
micronutrients.
So humic acid's a really bigone.
It's roughly 10% humic acid,but it also releases the
(05:37):
synthetics that dissolve.
When it's taking the water in,it'll absorb those synthetics
with it.
It's got a high CEC, so it canactually attach to it and then
it releases that back out intothe soil.
So it's a different mode ofaction and it's something that's
looking to really be acomplementary product to
synthetic fertilisers ratherthan a direct replacement.
Speaker 2 (05:54):
Yeah, interesting picture of actually a seedling
with its roots actually growingthrough the compound as well.
Speaker 3 (06:02):
Yes, we treat it as like it's a food's, it's a food
source, it's got a home.
We're also looking at otheravenues.
So the granules themselves.
I can actually absorb a lot ofwater, um.
So we're looking at as asynthetic fertilizer but where
we're seeing a lot of researchcoming from external parties is
actually using the granule as acarrier.
So we're looking at differentchemistry we can put on it, but
also biological.
(06:22):
So we're looking at differentchemistry we can put on it, but
also biological.
So we're looking at differentbiostimulants to really promote
microbial activity in the soil.
So we're seeing significantuplift in the initial round of
testing done on that, which isfascinating.
We're actually seeing that godown with the roots through the
profile as well.
So that's that avenue.
And the other one we're lookingat is, again, it's all around
nutrient use efficiency.
(06:43):
But it's about pulses inAustralia.
So pulse crops like faba beans,chickpeas, those type of crops
Traditionally the seed is coatedwith a rhizobia inoculant.
What we're looking to do isactually make the fertilizer be
coated.
So the reason is the seed has arhizobia on.
The seed traditionally hasabout a 24-hour life cycle and
(07:04):
then it's non-viable becauseit's a living organism, yeah,
whereas if we can coat it on thegranular.
We're showing shelf life of upto 30 days.
So it's just an application.
Farmers can have this pre-doneor done externally and then
they're just putting it downwith the seed and it's one less
operation they have to dothemselves and we know we're
getting viable results.
The initial rounds of testingwe've done is like the
nodulation and these pulse cropsis anywhere from one and a half
(07:26):
to two times better than thetraditional approach.
So straight away we're puttinga lot more end back into the
soil.
Speaker 1 (07:31):
Yeah, uh certified organic or it is certified
organic, yeah, australian.
Speaker 3 (07:36):
So, um, we're running three different products at the
moment.
So the first one is just whatwe call terrace um, it's a
straight organic compostedfertiliser granulated.
The second one's Terrace Pro.
It's 85% compost, 5% blood andbone, 5% chips and 5% sulphate
or potash.
And then the third product iswhat we call Gyptek, so it's 50%
manure, composted manure, 50%gypsum, and we are looking at
(07:59):
other trace elements we canbring into different blends as
well.
Yeah, depending farmersrequirements and soil
constraints can we circle backaround?
Speaker 1 (08:07):
to the farms yeah to the, to the uh, to the feedlot,
because they like uh.
You presented some fascinatinginformation there.
You know, in terms of you knowthe, the breakdown of the, the
cattle and and the kind of thegrowth rates and the feeds.
Can you, can you just elaborateand share a little bit about
that business, part of thebusiness and what sorts of
things you're doing in that area?
Speaker 3 (08:26):
so we're really we're running I guess three different
feed programs through the feedlots.
There's short fed, there's kindof two leagues to that, but say
short feds, traditionally 100to 110 days on feed.
So it's just cattle where we'rereally trying to hit with a
high energy diet.
We're trying to get them in andand put as much weight on them
as we can quickly and then westep into our angus cattle so
that's a mid-fed range we'd say150 to 200 days on feed.
(08:49):
So that actually does form intoone of our in our beef brands
as well.
And then we start looking atthe real high-end wagyu products
.
So we're taking those anywherefrom three to four hundred days
feed.
So that's really concentratingon marbling for that one.
Yeah.
Speaker 1 (09:04):
And so high energy feed.
So you talked a bit earlierabout I think you said 60%
grain-based, if I've got thenumbers right.
So what do those dietstypically look like at different
stages and sort of how muchenergy you're trying to pack in
and what sort of growth ratesare you getting on the back of
that?
Speaker 3 (09:20):
Yeah.
So if you just look at probablynet energy gains, probably the
good one um.
So on a wagyu one, it's aslower growth, more marbling
focus, so lower energy.
So that might be kind of 1.25times and in in the ration, then
we're moving right through toprobably 1.55 times.
On neg for um, for the shortfed, yeah, so like short fed
would be, targeting over twokilos a day is what we're trying
(09:42):
to put on, put on there, sohigh energy diets.
But we've really got to look atour mix of commodities.
So it's a it's a very lowmargin, high volume game.
So we're constantly looking atdifferent commodity mixes.
That is going to give us thebest return Ultimately.
Speaker 2 (09:56):
You made mention of a change in diets as well, with
temperature as well, so youdon't want to cook them.
Speaker 3 (10:00):
Yeah.
So in Australia where we canget, especially in Queensland,
we can get that high heat insummer so we get significant
days over 40.
So it's not just a straightheat, it's when it aligns with a
heat event that's got humidity.
If there's a storm that createshigh humidity at night but also
they're not getting thatcooling effect at night, so what
it's got it's accumulated heatunits over time.
(10:21):
So we've really got to monitorthat and if we see a significant
event come in, we'll look tochange the cattle's diets to
drop them down.
So if they're on a high energydiet so heavily wheat focused,
we'll look to take them off thatbring them back into more
silage, probably bring morebarley in just to try and cool
them down through that heatperiod.
Speaker 2 (10:39):
Scrolling back a little bit to the scale of the
place, head of animal and theturnover, because you also
mentioned, there's quite a lotof scope within the business
going forward.
Speaker 3 (10:48):
Yes, the current capacity is 107,000 head and
we're turning off approximately240,000 head of cattle a year.
Growth wise, we are looking atexpansion.
So we've got two real optionsat the moment.
Grassdale, our main feedlot, isthat build capacity so we've
got it fully built out to uslicense capacity and it's capped
out at a site.
Yeah, our two other smallfeedlots we do have room to grow
(11:11):
there.
So we've we can probably extendthose both of those out by
about no total would be 35,000head.
And then we are looking atanother feedlot up in central
queensland, so about an hourwest of rockhampton, so that
would be, um, that would beapproximately 40 000 head on
feed.
So that's a complete creedfieldsite, yeah, where we'd look to
come in and develop that as areally modern, efficient feedlot
(11:33):
.
Speaker 1 (11:33):
So, looking at every bit of water motion we can
through that yeah, and where arethe cattle uh coming from and
what's your kind of procurementsort of process and you know who
you're dealing with to actuallyget those sort of numbers,
because you've got somephenomenal number that you, that
you need every day or everyweek yeah, so our weekly
turnoff's about um so four and ahalf thousand head so coming in
and out.
Speaker 3 (11:52):
If you're looking at where we're sourcing from, it's
a big area.
So we're pulling anywhere fromnorthern queensland right down
to victoria, depending on thecattle mixes.
So it's a big one.
And how we do that we'redealing.
98% of our cattle are comingdirect from farmers.
So we look at our long-termproduction results.
We're getting from differentfarmers and we really try and
target those that have given usa positive return and run a
(12:14):
really good genetics but also areally good operation from feed
management as well.
Speaker 2 (12:17):
Yeah, and you talked about a program program, uh,
that more than co have.
Was it predictor plus?
Speaker 3 (12:23):
predictor plus.
Yes, it's a program buildinghouse.
So what we're looking at thereis we're really looking to
maximize um herd management, butit's also looking at the
emissions through the supplychain um.
So what?
What it is is it's got all thethe genotypes of all different
cattle breeds.
You can start putting yourindividual crosses into it and
it'll just show show theirenergy requirements through
(12:44):
their life cycle, as they'regrowing right through, as
they're reproducing, but alsolooking for growth.
And then over the top of that wecan overlay that with pasture
kind of known pasture resultsfrom different components in
australia, and with that alsocomes emissions.
So we've got emissionsintensity by area.
And then what we're doing fromthere is farmers are actually
sending their dung samples inand we're testing that and
(13:06):
looking at what energy isactually in the dung.
And then from there you can geta good, good gauge of what the
cattle are using um or whatthey're lacking in their diet
and overlay that with thepasture requirements.
We can see when they're whentheir seasonal demands or the
seasonal shortfalls, more so inin feed, and that's when we can
really start targetingsupplementary requirements and
and looking to go earlier andlonger, yeah, for a similar cost
(13:29):
, but really maintain that thatcattle and and that reproductive
rate, so if we're dropping thatdown, the reproductive rates
are off, so straight away theiremissions intensity goes up.
Yeah, but the other, the otherinteresting part is is we can
from that we can actuallyproduce an emission emissions
intensity report we can handback to the farmer.
Speaker 2 (13:46):
Yeah, as well, and so this is for the 98, that's what
you're saying for those thatare supplying you guys yeah,
we're just looking to roll thisas a separate product.
Speaker 3 (13:55):
Um, obviously we'd love all of our producers to
take it up, but it's somethingthat's available, yeah, in the
market.
Speaker 1 (14:01):
Well, You've talked there a little bit about the
emissions intensity reporting.
Where is that being used or howis that adding value?
What other parts of thebusiness are using that on?
Speaker 3 (14:11):
Yeah, so we're producing a sustainability
report every year.
It's a key part of what we'redoing, but we're really looking
towards 2030, so that's a targetthat's been set in Australia.
So we've got some mandatedlevels in kind of 27, 28.
We have to start reportingscope one, scope, two ambitions,
and then eventually it willlead to scope three.
So we're getting a lot ofsignals from the top-down
approach being like end users,like supermarkets, offshore.
(14:36):
But we're also seeing investors, banks, also pushing for that
target.
People are wanting to knowwhat's your plan by 2030?
How are you going to reduceyour carbon or emission
footprint globally?
So we've got to look at whatwe're doing.
It's one thing that we don'twant it to be mandated.
We really want kind of thecorporate world to drive that,
(14:57):
and that's kind of what we'relooking at.
The carrot's much better thanthe stick, but I don't think
it's going to be premium focused.
It's really going to be marketaccess.
So I think if you're not, ifyou're not on that bandwagon,
you're going to have limitedmarkets, which will ultimately
lead to diminished returns.
Speaker 2 (15:10):
It's quite a pleasing way and I almost immediately
said afterwards because it's alot of the rhetoric that we're
seeing or communicating in thein the New Zealand dairy market,
so quite encouraging that it'sthroughout all businesses and
you guys are delving right intothat.
Speaker 3 (15:25):
Yeah, and a big one is we've got to look at
emissions intensity.
So we're not looking at it over.
We've got to try and bringeverything back to emissions per
kilo of beef produced or kiloof meat or per ton of fertilizer
that we're producing.
That's how we're looking at it.
Speaker 1 (15:40):
Someone raised a really good question in the
conference and it was about howfar does your reach extend?
We talk about scope three.
Would that eventually reachinto the suppliers of beef
animals, so where you'reactually sourcing them from, and
actually those farmers auditingtheir kind of emissions profile
and then supplying that to youand then that becoming part of
(16:03):
your value chain?
Absolutely.
Speaker 3 (16:05):
When you look at our scope, three emissions for us
it's a very significant portionof the total emissions in the
supply chain come at theproducer level.
Yeah, so we have to be workingwith them, because that's going
to be a key component.
We can control what happens inthe feedlot, but we also need to
be able to work with producersto reduce their emissions at the
production level.
Speaker 1 (16:26):
And that tool that Matt mentioned, predictor Plus,
is just one of those mechanismsto sort of help, measure and
refine and basically just drivesome of those efficiencies.
Speaker 3 (16:37):
Absolutely yeah, and it's looking at profitable
returns for a farmer as well.
Like what can they changewithin their mix to increase
profit but also reduce emissions?
Yeah, nice.
Speaker 2 (16:46):
What are some of the challenges going forward for you
?
You mentioned a little bit andprobably had it over the years
around perception, but what arethe challenges for Morton Co
going forward?
Speaker 3 (16:59):
Oh look, they're significant.
We're no different than anybusiness, so we're like it's a
high volume, low margin game.
So we've always got to look atthose.
Small things are very importantto us from a costing
perspective.
We've got to be efficient.
So, like energy, energy is onearea we've got to really focus
on, but it's really just aboutmanaging what we can do and it's
(17:20):
just trying to have continuity.
For us, there's always going tobe challenges with emissions,
with regulatory requirements orin effluent management, all
those things.
Yeah, so we've got a lot ofthings to focus on.
When you're dealing with animalwelfare, there's always a lot
there.
So that's our first andforemost.
But for us, it's people.
They're our number one asset,so we have to look after them,
(17:43):
and then the rest of those otherones will, because there's 300
staff yeah 300 plus staff acrossthe whole site.
So yeah, significant number ofpeople and sorry we should have
covered this at the start.
Speaker 2 (17:53):
1997 was it when the business started?
Yeah, Charlie Moore started it.
Speaker 3 (17:58):
yeah, so he came and just looked at a kind of an
innovative way to look at thefeedlot space and change it up a
bit from how others were doingit.
Speaker 2 (18:06):
Massive growth.
Look at the feedlot space andchange it up a bit from how
others were doing it.
Speaker 1 (18:08):
Massive growth, yeah, massive growth with uh you just
briefly touched there on that,on the animal welfare you know I
think about in new zealand.
You know we're very sensitiveto to animal welfare, like I
guess many countries are is that, is that a a major threat?
And you know what?
What are some of the thingsthat you do in terms of how you
manage that those feedlots,because they are hugely
intensive, obviously?
Yeah, so kind of how do youmanage those feedlots because
they are hugely intensive,obviously, so kind of how do you
(18:29):
manage those to ensure reallyhigh standards for animal health
and low death rates and allthose, yeah.
Speaker 3 (18:36):
So biosecurity is number one for us, so that's the
key focus we've always got tohave.
But outside that, like we havea lot of people, so every cattle
that comes in, they're inducted, they're given a health check
on the way in.
Of people.
So every cattle that comes in,they're inducted, they're given
a health check on the way in.
And then we have pen ridersevery single day going through
every pen if there's any, any,cattle, what's a pig rider?
so just a person, a personmoving through yeah, okay,
scouting around through the pens, um, and if there's any, any
(18:58):
animals at all that show anysign of sickness, so we'll pull
them out and actually take themto what we call the hospital bay
.
Yeah, so we've got we've gotisolated one, but also where we
can really monitor them closely.
Yeah, so a key focus, obviously, animal health and low
mortality rates.
We've got extremely lowmortality rates and we're
looking at that constantly.
Speaker 2 (19:18):
I suppose that comes into wastage and emissions as
well, doesn't it yeah?
Speaker 1 (19:22):
Just moving a little bit away from the feedlot.
So you've got 3,400 hectares ofyour owned farmland.
So what's the sort of summary?
So that's just a massivecropping platform.
What do you do with that?
Speaker 3 (19:34):
Yeah, so if we look at that 3,400 hectares 900 of
that's irrigated, so it's acrosstwo different cropping
properties.
So a key component of that ismanaging the effluent.
We obviously capture every bitof runoff from the feedlot into
effluent ponds.
We then look to use that backon our cropping land.
So we're we're mixing that withfresh water that we capture on
farm through through stormevents, so we're mixing that
(19:56):
back onto crops.
So it's opportunity havingirrigation in australia because
our climate's so much morevariable and arid as a whole
compared to new zealand.
So that water is a greatbenefit.
But it also does providechallenges with the effluent.
So it's a high salt load levelsand we also we have to be
managing effluent water in highrainfall events.
So a crop will already be wetfrom the rainfall event in wet
(20:20):
years and we may have to go onand keep pushing that irrigator
across as the manage effluent.
Speaker 2 (20:25):
And irrigation land, like all those irrigators
getting influence?
Or is it only a proportion thatwe'll actually see?
Speaker 3 (20:32):
Only a portion.
So we always have a crop in theground at any given point.
So we're rotating betweensummer and winter.
So traditionally where ourfeedlots are located, summer
crops would be probably 60%summer crop dominated, 40%
winter crop.
But we're looking, we grow avariety of crops.
So if we look summer we'regrowing cotton, sorghum or milo,
(20:53):
we're growing corn silage, wecan grow mung beans, so they're
probably the four predominantones.
And then winter winter cropping.
We can look at wheat barley.
We've got legumes a favourbeans, chickpeas.
We can also grow canola.
We've got legumes of faba beans, chickpeas we've got.
We can also grow canola.
We've got small areas of thatthis year as well.
So we're always looking to havea crop in the ground.
But it's very much treatedcommercially, complete arm's
(21:14):
length.
So we're looking at commercialresults as a business as a whole
.
So if we're growing highprotein grain, we don't need
that in the feedlot, so we'llsell that externally and just
buy in a feed source for growing.
Speaker 2 (21:26):
So some interesting conversations between some of
the team.
Then as well, I happen to sitacross both areas.
Speaker 3 (21:32):
You have to choose.
Which hat I put on?
Speaker 1 (21:35):
You've just got to manage the boxing match between
the two entities.
So how large a portion doesthat owned support, block
support in terms of the feed?
How much external feed do youhave to go?
Our own production is tiny.
Larger portion does that, uh,owned support, block support in
terms of the feed, like how howmuch external feed do you have
to go?
Speaker 3 (21:50):
our own production is tiny in comparison.
Yeah, so we're broad.
Broad numbers is probably abouthalf a million tons of feed
commodities a year.
Yeah, bringing in yeah, yeahsignificant.
Speaker 2 (21:59):
There's something like 175 trucks a week or
something that carry yeah,that's just commodities.
Speaker 3 (22:05):
Yeah, yeah, yeah.
So that's working on roadtrains, so 50 tons at a time,
yeah it's something like a solidstick in new zealand would be
this time yeah if you, if you gothrough the different
businesses.
Obviously we've got the feedlots, the core and then.
So we've gone through thetransport, we've gone through
the fertilizer.
We also have a cotton seedcrush, um.
(22:25):
So where we can bring rawcotton seed in, we de-hull it,
so take the external coat offand then we're left with the
meats.
We then take that through anextrusion process and we're able
to generate oil.
And with that oil we canactually take it through the
first stage of refining just toremove the phosphorus gum, and
then from there we don't do it,but we can potentially sell it
to someone in australia thatwould refine that one more step
(22:48):
and then it's used as a cookinggrade oil.
So that's that, and then the uh, the other byproduct out of
that process is is cottonseedmeal.
So very high source of protein.
It's about 50, 52 protein andthat.
So again, external sources, wecan sell that or, worst case, we
can use all of that in ourfeedlot in the ration as well.
We We've got that.
We've got power generation.
(23:08):
So we've got three gas-firedgenerators at site so that
drives a large component of ourenergy production.
We're looking to expand thatwithin the next 12 months,
because you said that you'revery close to gas fields.
We are yes.
Speaker 2 (23:21):
And that's how you get that low-cost energy.
Speaker 3 (23:22):
Yes, yeah, yeah, so that's that.
So we've got a pilot lysineplant in at the moment, so
that's getting sorghum and we'llbe producing lysine, so kind of
that's amino acid we can use asan additive anywhere else.
So we've got that component aswell.
Yeah, so very diversifiedagribusiness.
Yeah, I was going to say whatare you?
(23:44):
Not doing yeah.
So we're basically just lookingat anywhere um up or downstream
of the feed lot where we we canadd value in that supply chain.
Ultimately, that's what we'lllook at.
Speaker 1 (23:52):
Yeah, um, someone raised the, uh the question
again in the conference about uh, you obviously are still doing
a lot of cattle, uh getting intoabattoirs and, and you know,
kind of owning that space, anyany interest in developing in
that area or not?
Speaker 3 (24:05):
really look, not at the moment, no, it's not, it's
not a key, key aspect for us.
So it's a pretty highlyspecialized industry, that one,
yeah, so we're just kind ofhappy we've got, we've got
reasonable contractualarrangements with a couple of
different suppliers and happyjust to keep it that way.
Speaker 2 (24:19):
Yeah, um, we'd have some, some partnerships,
especially around the meat sidewe look at through there, and so
for contracting there and forcontracting feed is a large part
of what you're doing yeah, notso much the meat, so I'm not
over the cattle but feed, yes,um.
Speaker 3 (24:33):
So we've got to look at at price risk management.
So we've got various tools wecan do.
Obviously, buying a graindelivered is the easiest one,
yeah, um, when we think it'sfavorable, or if not, we've got
different hedging opportunities,whether that's onshore in
Australia through, like ASXgrain futures track contracts.
We can also look at Chicago orEuropean grain futures as well
(24:54):
on that side.
So just looking to hedge ourpricing.
So I think one of the slides Ishowed was just our ration cost
over time.
So we've seen prettysignificant increases in that.
We've seen grain pull back inAustralia as it is globally at
the moment, with these wholerecession fears that are
floating around and generally adecent world supply of feed
grains, so we've seen a pullbackthere.
(25:16):
But it's not just grain, it'severy commodity that's really
driving that.
So we've seen just as inflationbites, the cost is moving up
across the board.
So, just looking to minimisethat wherever we can.
Speaker 1 (25:27):
Yeah, has that squeezed the margin even tighter
?
You say it's a low margin game,um, and you know your rising
ration prices.
That really squeezed thatmargin even even more in the
last three or four years?
Speaker 3 (25:38):
oh, it has.
And I think if you look at oneof the other slides I put up
just on cattle price, so I'veexperienced huge volatility.
So we came out of the droughtthe kind of the biggest drought
in 100 years in Australia.
It was a three-year one andcattle numbers were really low.
Producers had to sell just tokeep them alive.
And then on the back of thatwhen everyone started to restock
so chasing female numbers thatreally started to push cattle
(25:59):
prices and we went to historiclevels.
It was huge.
On the back of that we've comeinto restocking and finished,
and then we'd see the wholedownstream meat supply chain
really tighten, especiallyoffshore.
So as disposable income startedto get tighter, as inflation
ran right, people slowed theirconsumption of meat, especially
high-end meat, and then on theback of that they've just kind
(26:20):
of bottlenecked the supply chaina bit and we've seen cattle
prices really come offsignificantly.
So we had record highs almostdown too.
When you look at inflationadjusted over time, it's kind of
right down in the fifth totenth percent also.
Speaker 2 (26:34):
Yeah, so very volatile.
Yeah, Do you look to changeyour product marks in terms of,
say, Wagyu, for instance?
Does that start to change interms of how much you're going
to start processing?
We can but the big thing with.
Speaker 3 (26:46):
Wagyu is.
It's such a long process sothey're three to four hundred
days on feed, so it's very hardto be reactionary to market.
You've only got to stay in thatmix and take it over time and
just look at the manage.
Speaker 1 (26:57):
We can ultimately adjust our numbers, but it's a
component we're always going tohave, I guess, a bit of movement
between those depending onwhere the margins are and the
timing of selling.
I assume you manipulate thatfairly regularly.
Speaker 3 (27:15):
Oh, we do.
Yeah, we're very much looking.
So as cattle are exiting, youcan always look at what you're
replacing them with and changeit next to what you see is the
most profitable at the time.
Speaker 2 (27:23):
Yeah, yeah, I think you've done pretty well to
encapsulate what Morning Codedoes and the journey, I suppose
the cool new ventures that youguys are going into.
And thanks for sharing whatwe're seeing is the similarities
, I suppose, in the emissionsspace with the dairy market.
So thanks for jumping on.
I know we've kind of ripped youstraight out of the conference
(27:43):
and chucked the microphone andearmuffs on top of you.
So thanks, ben Ben, for joiningus.
It's been a pleasure having youand we'd love to do this again,
actually because there's somuch to your business.
Speaker 3 (27:52):
Yeah, no, I'll thank you for the opportunity.
It's been great Appreciate it.
Speaker 2 (27:56):
And thanks, wade, again, and for our regular
listeners, make sure you likeand subscribe so that we push
this podcast further and wemight be able to go even further
than Brisbane Australia.
So watch out this space.
We'll talk to you next time,and thanks for waiting myself.
Cheers, ben.
Speaker 3 (28:12):
Thank you Thanks.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!