Last Friday, the Victorian Livestock Exchange (VLE) called a meeting of senior representatives of agents operating within the VLE’s Pakenham complex.
This meeting was to discuss their views on the current, and possible future of the facility, and was considered a commercial in confidence discussion.
When the VLE was first formed 20 years ago, several outside parties were asked, and accepted shares in the VLE.
Since then some of these sharholders have since sold back their shares.
However, the agents may be the operatives in the VLE, Pakenham, but who else shares an interest?, Maybe the producers who sell here are interested parties.
The only information that these people get is an increase in yards fees, which rose to $24.30 on Monday.
Obviously, when you keep things a secret, rumours happen, and the latest is the imminent closure of this complex.
Chief executive Wayne Osborne said on Monday that closure was not discussed, but indicated that continual losses of throughput were creating a loss situation and steps need to be taken.
Whether this will be a closure in 2-5 years, or less, is the current speculation among the industry. Not answering these questions leaves the VLE open to this speculation.
All that aside, how do other non-municipal saleyards fair under the same guidelines?
Most recent selling centres of Barnawartha, Carcoar and Yass have come at a very high cost. While these complexes have very high throughput, if direct selling, or AuctionsPlus, continue to increase, will these larger centres come under the same pressure?
For that matter too, will local Councils, that own and operate a centre, consider the same implications, in order to protect ratepayers money.
Just recently, the Greater City of Geelong closed the cattle selling complex, due to lack of supply affecting returns to the council. While this has been an issue for some time, a final decision was made.
Some 20 years ago, Baw Baw Shire Council made a decision to sell their municipal yards, and the current owner has owned it for 15 years. I spoke with the owner this week and they indicated that if the complex becomes unprofitable in the future, it will close too.
Hence my topic of conversation is, profit over need, and when a private operator, a semi-private company, or a superannuation funded saleyard, pulls the pin.
There has been a natural progression to direct selling of fat cattle, and a larger catalogue of store cattle on AuctionsPlus, over the past twelve or more months.
This alone suggests that pressure will come to bear sooner, rather than later.
It is possible that closures of some saleyards will benefit others, but in the end fees will rise, and this then puts another nail in the coffin.
There will always be a need for saleyards into the future, but at what cost?
These multi-million dollar complexes, some to the tune of $20-$30 million, will have to pull a rabbit out of the hat to survive.
Consider the privately owned, Mortlake saleyards currently under construction, and the new CVLX complex for Ballarat.
Future rationalisation of other saleyards must be a consideration.
