‘Just add water’
THE old jingle “just add water” takes on new meaning at Beetaloo Station in the Northern Territory, where the Dunnicliff-Armstrong family is investing about $40 million in adding water on an extraordinary scale.
It’s a project involving 600 135,000 litre tanks, about 3000 kilometres of 75-millimetre poly pipe, more than 3000 kilometres of fencing, and 70 bores.
That’s on the debit side. On the credit side, 1.05 million-hectare Beetaloo was carrying 20,000 cattle on its 40 “turkey nest” storages when the family bought the property in 2002. Now it’s carrying 80,000 head, and when the development project is finished next year, it will carry 100,000 head.
The point of this far-sighted undertaking is not merely water, but grass.
Beetaloo, once part of Peter Sherwin’s northern cattle empire, sprawls over the Barkly Tableland about 800km from Alice Springs to the south, and roughly equidistant from Darwin in the north and Mt Isa to the east.
Assessing the operation
After John and Trish Dunnicliff bought Beetaloo (operated in partnership with their daughter, Jane, and her husband Scott Armstrong), they began taking a closer look at what their $20 million investment was returning.
In 2002, Beetaloo relied on seasonal natural watering points and 40 turkey nests up to 12km apart.
In a roughly 1km circle around the existing waters, the landscape was constantly grazed hard by up to 1000-1500 cattle that would cluster around a dam. As a result, these areas tended to be mostly populated by tough annual plants.
In a 1-2 km circumference, grazing pressure fell off, but it was still constant, and hard on perennial species. Three kilometres out from water, and the pasture was hardly touched.
Cattle will use this distant pasture when other feed is absent, Mr Dunnicliff said, but any production value is lost because they burn off so much energy in walking.
At best, unused grass became rank and unproductive. Just as likely, it burnt off in the Dry, sparked off by the north’s intense lightning storms. Either way, the family was only using a fraction of its investment.
The Dunnicliffs are no strangers to developing country to maximise return, so they took the same course on Beetaloo - only more so.
Most of the old turkey nest storages are now fenced off. “No water is pumped that an animal doesn’t drink,” Mr Dunnicliff said, contrasting this with the pumping needed to make up evaporation and seepage losses from a turkey nest.
Almost all the property has been laid with 75mm pipe on a 4km grid, with a tank at each of the grid intersections, and troughs off the tanks.
The development has installed 560 waters so far - the remaining 40 will be installed next year - at a rate of about 50 a year. During the rollout phases, about 20km of pipe is ripped 600mm into the ground each night, when the pipe is less prone to kinking.
Pipe is bought in 1000-metre rolls from Northern Stock Water in Katherine, owned by the Dunnicliff’s son-in-law, Adrian Brown.
The network will be serviced by 70 bores, 60 of which are already operational. Each 620 Mono-equipped hole supplies at minimum nine tanks, but in practice a bore can run 20-30 tanks.
About 20 per cent of bore capacity will always be held in reserve. “Running out of water is not an option,” Mr Dunnicliif said.
The headline cost is substantial, but break it down over Beetaloo’s expanded carrying capacity, and the figures are much less confronting.
Each watering point, with fencing, costs about $60,000. That equates to about $350 per animal equivalent (AE, a 450kg animal) for the development phase. Thereafter, water delivery, including diesel, maintenance and wages, comes down to about $3 a head per year.
“It’s big money early on,” Mr Dunnicliff acknowledged, “but worked out on beast area, it stacks up. And it’s better than buying more country - there are management advantages, and tax advantages.”
Keeping costs in check
CAPITAL investment should make money in the long run, but running costs are just costs. Beetaloo keeps that last form of expenditure on a tight rein.
A tight focus on drivng down cost of production means there are some notable absences from Beetaloo’s management system: no lick, no castration, minimal people.
Through the Wet, management of the 1.05m ha station and its 80,000 cattle fall to five people. Four of them are the Dunnicliff-Armstrong family; the fifth is the property’s only permanent station hand.
Scott Armstrong, who manages station operations, is seldom in a ute, but daily in one of the station’s two Robinson R22 helicopters. Over a year, running the choppers costs about $6 a head, including all moving on the rotational grazing operation, mustering, and much of the checking of waters.
Jane Armstrong handles all the company’s marketing. John Dunnicliff specialises in the big picture - finance and the station’s long-term direction - and Trish Dunnicliff manages the station office.
In the Dry, a mustering camp of seven or eight people is assembled, and a “grey nomad” borerunner. The camp is inducted into low-stress stockmanship by a professional educator: the family regards yard stress as another cost they can do without.
Also absent from the Beetaloo yards is castration. The family’s Indonesian clients prefer bulls entire, eliminating a time-consuming operation. Another costly operation, dehorning, is in the family’s sights as they start to push Senepol genetics through their Brahman herd.
Attention to detail extends to the family’s clients through South-East Asia, where they have been supplying live cattle for 20 years. Every year, members of the family personally visit their Asian clients to discuss animal performance and supply chain improvements.
The importance of building these deep relationships was highlighted during the 2011 live export crisis. Beetaloo didn’t have a crisis: it stopped shipping cattle for about two months, and then resumed normal operations.
Managing a rotational grazing model
INVESTMENT in water and wire on Beetaloo has more than trebled carrying capacity, but it has also expanded management options.
On the station’s red country, which makes up about 60pc of the holding, each watering point now only carries 150-200 head - despite being set-stocked - compared to upward of 1000 head often orbiting station watering points.
A water gives cattle ready access to 1600 hectares of pasture; should they walk beyond two kilometres in any direction, they are in the grazing zone of another watering point.
On the classic Barkly black soil plains that make up the remainder of Beetaloo, the family is running a rotational grazing operation where 5000-7000 young bulls for the live export trade are run in a single mob.
Rotational grazing paddocks vary in size, from 40 paddocks of 400ha to 20x 1000ha, and 50x 1600ha. The smaller paddocks get three days graze at a time, three times a year; the larger paddocks are moved on a weekly basis.
Ultimately, the family thinks it will push the rotational model over much more of the property. The production benefits seem to be there - although it is early days - but more importantly, it allows for effective feed budgeting.
Loading up Beetaloo with stock leaves no margin for error when a hard spell sets in, Mr Dunnicliff said. The ecological health of grasslands underpins profitability of the whole operation. Flogging them out in dry times, like running out of water, is not an option.
The rotational grazing model greatly improves the family’s ability to budget availability weeks ahead, and move early to destock if grassland health looks likely to be compromised.
If the production benefits hold up, as they appear to be doing, rotational grazing may be expanded, thanks to the new infrastructure, to become default mode of management on Beetaloo.
Staged development process
“IT'S not for the faint-hearted,” says John Dunnicliff of the big development program he’s implemented on Beetaloo.
It helps that he’s done this before, although not on such an immense scale. Mr Dunnicliff gave a quick history of his business model to a Soils for Life conference in Albury last month.
It began in 1966, he said, when he bought a run-down property at Coonamble for $120,000, including stock and plant.
“We borrowed $60,000 of the purchase price. By 1970, with the wool slump, wheat quotas and poor cattle prices, our value was $60,000, so we were technically broke - but we always paid our interest to the bank. They have to run a business as well. Sell what you have to, but pay the interest.”
“We managed to convince the development bank to lend us another $20,000 so we could develop the property, by sowing it down to lucerne, fencing it into 30 100-acre paddocks, and watering it properly.”
“This gave us a low-cost, productive operation. From then on we made profit and the bank backed us into another property, and we did the same. This gave us growth and a pattern to work on.”
The Dunnicliffs bought, developed and sold property in NSW, the iconic Isis Downs Station in south-west Queensland, King Island and the Kimberley.
Cherrabun Station in the Kimberley was bought for $2.25 million. It was carrying 7000 cattle on 57 watering points. The Dunnicliffs spent $2.5 million adding another 200 watering points and fencing, and boosted the station’s carrying capacity to 20,000 head.
The sale of Cherrabun and the King Island property financed the family into Beetaloo.
The $40 million development program they have nearly completed on Beetaloo is outside the scope of a family to finance, Mr Dunnicliff said, and although their bank has been accommodating, it will only stretch so far.
The family has taken out a convertible note with an Australian businessman, “who has the right to convert to 41pc of the operation or we pay him back in 2018”.
“By then we expect to be in full production of 100,000 cattle, profitable, with a low cost, economically and environmentally sustainable operation - hopefully worth more than $1000 an animal equivalent.”