Max & Annabelle run an F1 Wagyu operation in southern Qld.
Following a significant capital expenditure program upgrading waters, fences and cattle yards, their working capital position was depleted. Their crop of Wagyu yearlings had not yet reached optimal weight for sale and the market was depressed. They felt there were good prospects for the market to improve over the coming 6 months and their F1 cattle were performing well on good quality pastures. Whilst they had a good relationship with their bank, they were concerned that their existing bank may not be able to turn around a facility increase before their existing working capital resources were exhausted.
They approached Legacy Livestock for an advance against their existing livestock so that they could replenish their working capital position. Max and Annabelle were approved a $250,000 facility by Legacy Livestock within 5 days of lodging their application. Over the next 5 months they progressively drew down a total of $225,000 from Legacy Livestock to meet their operating expenses.
This enabled Max and Annabelle to hold the crop of F1 yearlings for a further 5 months. During that period the cattle continued to perform well, putting on 0.8 kg/day weight gain. The market for F1 cattle also improved by $0.75/kg during the ensuing 5 months. In total Max and Annabelle estimate that the value of the cattle improved by $375,000 over the 5 month period meaning a financial gain of $150,000 after repaying Legacy Livestock in full.
Ultimately their bank did approve an increase in their facilities, but they have decided to retain their Legacy Livestock facility to enable them to maximise opportunities in the future.
