Cattle

RFF’s cattle assets are leased to DA and JF Camm Pty Ltd (Camm) and Cattle JV Pty Ltd (CJV)

Key details of the leases are outlined below:

Lessee Lease type Payment frequency Indexation Mechanism Rent review Capital commitments
DA and JF Camm Pty Ltd Property Quarterly in advance 2.5% per annum Five year market review – R&M on account of lessee
– Capital expenditure on account of lessor
Cattle JV Pty Ltd Property Quarterly in advance Annual CPI & cattle price adjustment (Eastern Young Cattle Index), with 150bps ceiling Five year market review – R&M on account of lessee
– Capital expenditure on account of lessor
Cattle JV Pty Ltd Herd lease Quarterly in advance Annual cattle price adjustment mechanism n/a – Herd maintenance on account of lessee

DA and JF Camm Pty Ltd (Camm)

DA & JF Camm Pty Ltd (Camm) operate an integrated cattle business, the Camm Agricultural Group (CAG). Operating since 1978, CAG is a cattle breeding, backgrounding and finishing business. The business operates nine properties, including a 9,100 Standard Cattle Unit1 capacity feedlot.

The business runs approximately 35,000 breeding, backgrounding and feedlot cattle, with Natal, the property leased from RFF, the primary breeding location for CAG.

Cattle JV Pty Ltd

CJV is a wholly owned subsidiary of Rural Funds Management and is structured to accept investment with suitable joint venture partners (e.g. processors seeking to secure supply).

CJV has employed property managers for each of the three properties with 80 years’ combined experience in livestock operations and management. The personnel have worked on the properties being purchased or within the immediate region.

CJV aims to increase the carrying capacity, weight gain and calving rates on the three properties. The herd lease rental indexation includes an Eastern Young Cattle Index (EYCI) adjustment mechanism (up to an additional 150 basis points above a base rate) providing RFF with some exposure to the benefits of higher cattle prices.

1A Standard Cattle Unit is equivalent to an animal with a liveweight of 600kg. Source: National Beef Cattle Feedlot Environmental Code of Practice, Meat and Livestock Australia, 2012.