MEAT processor Lethborg's looks set to buy the Killafaddy saleyards after entering into negotiations with Launceston City Council.
Aldermen endorsed a potential sale of the 13-hectare site, which accrued deficits of $436,000 in the past seven years, at a council meeting on Monday.
Launceston City Council's facilities management director Rod Sweetnam said the estimated $2.5 million in capital improvements required at the saleyards combined with its ongoing losses meant a sale was the most realistic option.
"The council doesn't have the capacity to recoup these costs because we're a facility provider which means we only get a share of the livestock sold at the market and a fee from livestock agents," he said.
Real estate agent Rodney Rawlings said a consortium of farmers and a private developer were interested in the saleyards and Elders applied for a lease agreement.
"The main criteria for the council wasn't money, it was that (Killafaddy) had to be continued as a saleyard," he said.
"Council looked at the two options and decided Lethborg's option of a purchase seemed to be the best."
Lethborg's managing director Heath Lethborg plans to lease the site out to a livestock agency after the purchase, but would not be drawn on further details.
Mr Lethborg said with their production facility neighbouring the saleyards, it would make sense to increase the throughput at Killafaddy, which he said, would require investment.
"These are all long-term things, but there's nothing stopping us upgrading it," he said.
Local buyer for Tasmanian Quality Meats (TQM) Grant Chugg said Lethborg's might have to "spend a bit to make it (saleyards) safe".
Mr Chugg, who has bought and sold cattle at Killafaddy for more than 30 years, said there used to be a two-day sale at the northern Tasmanian site with 8000 lambs and 3000 mutton.
Last week 950 lambs and 750 sheep went through the yards, while 140 cattle were yarded.
Roberts' decision to redirect their livestock to their new selling centre at Powranna, which is expected to be completed by March 13, has impacted on numbers, according to Mr Chugg, who has a small grazing operation at Relbia.
"A lot of people are now selling direct and through AuctionsPlus," he said.
And while processors like Swift Meats and TQM will benefit from the centralised yards at Powranna, it would be more difficult for buyers who had to attend two sales in the one day, he said.
"Personally it's better to buy everything in the one hit," Mr Chugg said.
The decision will however be welcomed by smaller producers in the North East and Tamar Valley, who were avid opposers of the saleyard closure, said Elders livestock representative Danny Slater.
Mr Slater said transport costs to Powranna, which is further south than Killafaddy, would have made it unviable for some producers.
Roberts State livestock manager Warren Johnston said market forces, issues surrounding urban sprawl and biosecurity and OHS concerns were the reasons behind the company's decision to pull their stock from Killafaddy.
He said Tasmania's southern selling centre at Bridgewater was experiencing similar issues, which has also been closed.
Mr Johnston said he expected 12-14,000 calves to come through the new Powranna saleyards during the upcoming weaner sales, and suggested 40-50,000 cattle and 150-200,000 sheep and lambs would be sold at the centre in the next 12 months.
