Victoria, and the wider country in general, is currently experiencing a boom in rural property values.
Favourable conditions for both livestock and grains across most production regions has contributed to increasing prices for agricultural land. Good seasons accompanied by good prices tend to be a rare occurrence in agriculture, but for now it appears the stars are aligned for producers.
2020, generally speaking, was a good year in terms of domestic agriculture. Winter crop yields were good and prices held, thanks to demand for grain from other parts of the world. Throughout the first year of the COVID pandemic, the Australian agricultural industry managed to stay strong – demonstrating supply chain resilience in the face of disruptions to both demand and supply elsewhere in the world. Overseas demand for grain, lamb and beef exports kept prices high, with Australian produce able to fill some of the gaps created through disruption to other supply chains. This situation has led to an increase in confidence locally, and over the last six months lamb prices have gone through the roof – in some areas, almost doubling on a per-acre return basis.
All of this growth is great news if you’re thinking about selling your farm – you’re selling into a hot market. However, for younger farmers starting out – and even mid-level farmers who are already somewhat established – these high land-prices are limiting their ability to expand and grow their business. Even if they’re able to access the capital required to make a property purchase, the challenge of sourcing sufficient working capital to operate still remains. For new entrants or expanding livestock producers, StockCo can assist as a source of funding for your herd or flock.
StockCo’s approach to providing finance is different to conventional agricultural lending. Often, producers find themselves financially constrained due to insufficient equity in real estate to access additional funding. StockCo finance is secured by the livestock itself, which for many producers means access to the funding they need to expand their operation, without impacting their relationship or leverage with their existing farm financier. This innovative approach allows StockCo facilities to sit alongside other finance arrangements, whilst providing valuable capital to grow productive capacity.
StockCo assists producers to really maximize the capacity utilization of their existing agricultural asset base, and this really drives growth opportunities. We do this by working very closely with the customer and their bank with the view of having some really mutual beneficial outcomes. StockCo does not compete with banks for business or their customers. Stock only provides livestock funding. We only fund sheep and cattle. So, we don’t do term lending. We don’t do equipment finance. We don’t provide transactional facilities. Our core business is simply livestock funding.
StockCo’s goal is to create value for our customers. We look to enhance the relationship they have with their current financier. This is ultimately providing them with a new pathway to increase livestock revenues. And ultimately this will help them deliver on an improved financial performance. StockCo’s facilities do not disrupt or interfere with an existing bank in terms of their security arrangements.
StockCo can assist producers emerging from a destocking event, for example, a drought and our facility helps them to return to generating profits really quickly after a favourable weather event. StockCo’s product can assist producers to really maximise the return on their assets and effectively, this provides them with further income or further revenue to help service their bank facilities or growth projects.
StockCo’s funding can help provide additional capital to our customers to help them grow their numbers which assists when acquiring new properties or on the back of a large development program where they’ve increased their carrying capacity.
Another good example of where StockCo’s facility can be really beneficial to our customers is where we have an existing customer who wants to defray an existing fixed cost, fixed operating costs, over a larger income stream or a larger revenue stream. And they can do this a number of ways, whether they go into a leasing agreement to lease further country or agisting further country.
StockCo sets up essentially an overarching credit limit for each individual customer, and that credit limit is really based on the peak livestock funding requirement of that customer. So once that limit is in place, the customer then makes the decisions around the most appropriate class of stock that they want to purchase to maximize the profit for their business.
Once the customer has then made that purchasing decision, they then simply purchase the stock the way they normally would, using their normal agents or their preferred purchasing channel, and the invoice is presented to StockCo who settle that invoice directly with the vendor or the vendor’s agent. So, when StockCo settles the purchase invoice, StockCo actually claim the GST back and then we charge finance charges on the GST exclusive amount only. We then carry the purchase price through and the accrued finance charges until the livestock is sold.
When they’re sold, the proceeds come to StockCo, we take out the purchase price and the accrued finance charges and we pay the profit out to our customer. And importantly we do that on a per head basis. So, the customer doesn’t have to wait until StockCo’s exposure on those stock has been cleared before they receive any funds. The moment they start selling livestock, we start paying profit out to their bank account.
StockCo does business with customers in all the major pastoral regions within Australia, and this is for both sheep and cattle and both pasture and feedlot-based operations. StockCo works with existing viable producers who are well supported by their local bank but may be limited to how much they can borrow under traditional bank policies. StockCo’s ideal customer is operating a very good quality property that suits the purpose of the trade and they have strong operational management skills.
StockCo is Australia’s largest specialist livestock financier. The business was actually commenced in New Zealand in 1995. We’ve been operating continuously providing livestock finance products since then in Australia and New Zealand. We really kicked off the Australian business in 2006 and then pivoted our focus to the Australian opportunity in 2015. Since then, we’ve grown our customer numbers in Australia to around about 1500 and our customers are spread right across all of the major pastural and regional areas of Australia. We’ve got about 450 accredited representatives on the ground in regional and rural locations all throughout Australia supporting our customers.
StockCo Australia’s head office is in Brisbane. We’ve got six in the team here in Brisbane and we’ve also got a business development manager in Rockhampton and another in Victoria, and they really support our distribution partners and our direct customers. So between the team on the ground and our 450 accredited distribution partners, we really have very good coverage of the Australian market. Since about 2015 when we really started to focus on the Australian opportunity we’ve advanced now, with well over a billion dollars for the funding of sheep and cattle all around Australia.
StockCo and Australian Wool Network (AWN) are pleased to announce an exciting partnership that will provide AWN’s extensive customer base with access to StockCo’s strategic livestock funding solutions. Through entering a distribution agreement, AWN will now be able to offer StockCo’s innovative livestock funding solutions directly to their customer base.
StockCo’s Australian COO, Tim Pryor, said he was delighted to be working with AWN and their customers. “AWN is well recognised and highly regarded particularly across Australia’s sheep and wool industries. We’re excited to be working with AWN’s high quality team of wool brokers and livestock specialists and look forward to partnering with them to assist AWN customers to maximise livestock production via access to StockCo’s livestock funding facilities.”
Rick Maybury, AWN’s Chief Operating Officer said, “StockCo is a genuine customer-focused model that delivers livestock finance specifically tailored for farmers.”
“We were attracted to the flexibility that StockCo’s livestock funding facilities can provide our clients, especially those in need of seasonal funding support to help grow their livestock operation.”
StockCo is Australia’s largest specialist livestock funder with a solid record of providing innovative livestock funding solutions in Australia and New Zealand since 1995. These funding facilities offer assistance with financing the purchase of sheep and cattle for backgrounding, finishing or trading purposes and are available to fund livestock in both feedlots and on pasture.
As part of this service, StockCo will fund 100% of the purchase price and only requires payment of the purchase price and accrued finance charges once livestock is sold. In most cases, StockCo will only take direct security over the livestock being purchased.
AWN is Australia’s largest independent wool broker offering a range of wool marketing and selling services. As such, AWN is the only wool marketing company with its own Australian-based wool manufacturing facility and a dedicated retail presence to market its client’s wool directly to consumers.
AWN and its subsidiary in WA, Dyson Jones, markets in excess of 275,000 bales of wool across Australia for some 8,000 woolgrowers and has specialist wool buying activities in NSW, VIC, TAS and SA.
The company’s core business is focused on delivering value to its client base by embracing innovations and establishing strategic alliances that will deliver financial benefits to its client base.
For more information visit www.stockco.com.au or contact your local AWN Wool & Sheep Specialist.
For media enquiries please contact: Tim Prior
Chief Operating Officer
0407 754 535 email@example.com
Australia and New Zealand’s leading livestock funder, StockCo, has today confirmed plans to sell 30% of StockCo’s Australian operations to Elders.
StockCo Group managing director Marcus Kight, advised he was excited to be formalising what had been a very successful collaboration between StockCo and Elders since 2014. “The close working relationship between Elders and StockCo has resulted in positive outcomes for our mutual clients. The taking of an equity stake in our Australian business will be a great way to align growth ambitions for both companies and for StockCo to secure long term access to Elders’ impressive distribution platform.”
The close working relationship between Elders and StockCo has resulted in positive outcomes for our mutual clients. The taking of an equity stake in our Australian business will be a great way to align growth ambitions for both companies and for StockCo to secure long term access to Elders’ impressive distribution platform.
One of StockCo’s strategic imperatives has been to build a strong and diversified distribution capacity so that StockCo’s livestock funding products were easily accessible to customers throughout all livestock producing regions in Australia.
In this regard StockCo is committed to a multi-channel distribution strategy and currently has diversified distribution via the following:
a formal distribution agreement with Elders,
a formal distribution agreement with Ruralco,
a formal distribution agreement with Sprout Ag,
arrangements with a number of private and independent livestock agents,
broker agreements with selected independent agribusiness advisors, and
a direct to market channel whereby clients can deal directly with StockCo.
Mr Kight confirmed that the purchase of an equity stake in StockCo by Elders would not change StockCo’s multi-channel approach and that StockCo would remain an independent business providing livestock funding options to all Australian livestock producers in a manner that compliments existing banking relationships
StockCo was formed in 1995 and is Australia and New Zealand’s leading specialist livestock funder. StockCo’s market leading products have become an important funding tool for Australia’s livestock producers. The benefits of StockCo’s livestock funding are:
Fund up to 100% of the purchase price of livestock for trading, backgrounding and finishing purposes.
Finance charges are payable at the time of sale of the livestock.
Security is taken over the livestock funded, leaving existing security arrangements with the client’s bank unaffected.
Facilities are designed to enhance client relationships with their existing banks. This is achieved by assisting clients to generate additional income from their existing asset base, or by increasing the scale of operations, without disrupting existing facilities or security arrangements with the client’s bank.