AFTER four generations of ownership, the Story family is selling Telusa, its dryland cropping farm on South Australia’s Eyre Peninsula.
Covering 988 hectares in the tightly-held Cleve Hills district, it has 900ha of arable land, and sits in an area where growers have the choice of delivering to sites operated by two major bulk handlers, T-Ports and Viterra which together offer EP growers a new level of competition.
Viterra operates a number of up-country sites on EP, and its export terminal is located at Port Lincoln, 164 kilometres south-west of Telusa while T-Ports, operating since 2019, receives grain at Lucky Bay, less than 60km east of the property.
Conversion to cropping
Telusa, which converted from a livestock to a cropping operation in 2013, is one of the eastern EP’s many properties to benefit from the increased competition on wheat and barley especially.
Along with canola and pulses, they are the crops grown in rotation on Telusa.
Agents for the sale are CBRE Agribusiness’s Phil Schell and Angus Bills, and they say yields for the property’s crops are on an uptrend to reflect first-class farming practices, good soils and mostly kind seasons.
Telusa sits 21km north of Cleve on gently undulating country underpinned by fertile soils including friable red clay loams and brown-grey loam over clay.
The block was settled in the early 1900s by Martin Hannemann, and is being offered for sale by his great grandson Andrew Story and his wife Rebecca as they look to retirement.
Family records put the farm’s annual average rainfall at 420 millimetres.
Agents expect to see offers of around $7400 per arable hectare for Telusa, which compares with around $8000-$10,000/ha being paid for higher-rainfall country on the southern EP.
Mr Schell said the price indication for Telusa was up around 20 per cent on the 2018 market to reflect strength in SA property prices as part of the bright national picture.
“Telusa is one of the larger cropping opportunities to have come to market in this region on the Eyre Peninsula in recent years,” Mr Schell said.
Telusa typically gets close to 4 tonnes per hectare of AH1 or AH2 wheat, and also produces vetch as its main pulse, along with some lentils.
“Gross margins at these levels are generating substantial profits which will give massive confidence to acquire more area for next year.”
Mr Schell said strong prices for all cash crops grown on the EP, and canola in particular, was fuelling demand mostly from expanding family farming operations.
“We’re expecting interest from local landowners looking to expand their scale, farmers from other regions in South Australia seeking geographic diversity, high-net-worth individuals and corporate groups,” Mr Bills said.
Expressions of interest on Telusa are open until November 18.
Its improvements include a home, shearing and machinery sheds, a workshop, 370,000 litres of rainwater tank storage, grain storage totalling 165 tonnes and nine seed silos.
Peninsula retains family focus
Macquarie Agricultural Fund Management’s Viridis Ag owns two EP properties, Wiltoo, which covers 4400ha at towards the west coast in the Cummins district, and the 4300ha Jamalka at Port Neill, around 70km north-east of Port Lincoln.
They are believed to be the only EP holdings owned by an investment firm.
Wiltoo was purchased in 2018, while Jamalka came into the Viridis Ag fold in May this year.
Both properties grow wheat and canola, and Wiltoo grows barley also.
While returns on higher-rainfall EP properties are attractive, Mr Schell said the scale of aggregations is generally too small to attract corporate funds, and better suits family operations.
Hassad Agriculture also put together EP aggregations at Cummins and Ungarra as part of its portfolio, and these were broken up and returned to family ownership when the Qatari-owned entity wound up.
The Cummins aggregation spent a brief period in Viridis Ag ownership as part of a larger deal, and price expectations for both aggregations were put at $3830-$6425/ha in late 2017.
They are believed to have sold above that in a market which is yet to stop rising.
Mr Schell said strong prices for livestock and cash crops in SA were limiting supply and stimulating demand, and Telusa will be an interesting test for the market.
“Telusa is a stand-out; it presents so well.”