Australian cattle giant AACo has described the business model used by Packhorse Pastoral Company as “super interesting” as it begins to eye potential future revenue streams from generating carbon credits across its vast pastoral estate.
The firm, one of Australia’s oldest and largest listed agribusinesses, announced a 105 percent increase in operating profits to A$49.2 million ($34.6 million; €32.7 million), up from A$24.4 million in FY21, for the year ending March 31, 2022.
AACo also highlighted in a presentation to shareholders that work is underway to develop a framework that will help it “measure and report our natural capital”, as well as researching and developing a more efficient method for measuring soil carbon.
In an analyst briefing on May 19, AACo managing director Hugh Killen said that carbon sequestration and natural capital will form a “key plank” of the firm’s sustainability strategy, which will be updated and released in July.
In response to an analyst question asking if AACo would consider adopting the Packhorse Pastoral Company’s rotational grazing model to generate more consistent revenue streams, Killen replied: “The simple answer to that would be yes.
“The Packhorse model is super interesting [..] It works well in the production system it operates in. We’re already investing in infrastructure to be able to intensify, and our version of rotational grazing, given our scale, is a lot larger. We’re doing that now – and I believe that will give us a better carbon opportunity in the future as well, as we register those projects and get them through.
“The big challenge in the northern production system is getting the right science and benchmarking in place in terms of measuring soil carbon, which is ultimately why I didn’t put a target into our sustainability framework on day one. And we’ll have that done in the next couple of years.”
Killen said there would “absolutely be an opportunity” for the northern Australian pastoral industry, of which AACo represents a large part, to benefit from models proven by firms such as Packhorse and others over time.
“Going forward, it needs to be fit for purpose in the rangelands northern environment we operate in, which is why I refer to landscape carbon, not just soil carbon. And being able to measure the whole feed biomass and not just soil carbon, and that whole enteric methane cycle, biogenic carbon cycle, is a key part of our initiatives that we’ll be delivering on the next two years,” he said.
“From that, it opens up the opportunity to actually register those projects and create another revenue stream.”
Killen said that AACo’s future revenues would not “just be beef protein” focused but would also include other revenue streams derived from its natural estate as well.
AACo was established in 1824 and owns and operates a portfolio of properties, feedlots and farms comprising approximately 6.4 million ha in Queensland and the Northern Territory, roughly equating to 1 percent of Australia’s land mass.