❓ Question regarding the Minister's comments on the viability of proposed sheep saleyards in Northam, Muchea, and Katanning, with the Minister defending his position and highlighting concerns about Northam's sustainability.
AnsweredQoN 177Legislative Council
QuestionView source ↗
PROPOSED NORTHAM SHEEP SALEYARDS
The minister was quoted in an article in the Farm Weekly of 6 April 2006 on the saleyards being built at Muchea and Northam and the existing Katanning saleyards as saying - . . . if one of the saleyards were to fail, it would be Northam. (1) Does the minister stand by his comment? (2) What basis or facts underpin the minister’s comment? (3) Is it correct that the majority of WA sheep are in the Northam region? Hon KIM CHANCE
The minister was quoted in an article in the Farm Weekly of 6 April 2006 on the saleyards being built at Muchea and Northam and the existing Katanning saleyards as saying - . . . if one of the saleyards were to fail, it would be Northam. (1) Does the minister stand by his comment? (2) What basis or facts underpin the minister’s comment? (3) Is it correct that the majority of WA sheep are in the Northam region? Hon KIM CHANCE
AnswerView source ↗
(1) Yes, I do. (2) The basis for my forming that view is that I think there is less underpinning capacity in the Northam proposition than there is in either Muchea or Katanning. Were the Northam facility to go ahead, it would certainly impact to some degree on the Muchea saleyards and to a greater degree on the Katanning saleyards. Indeed, it could threaten the viability of the Katanning saleyards to the extent that the new facility may not even be built, which would be a tragedy given that the vast majority of the state’s sheep are within a 100-mile radius of Katanning. Obviously Katanning is and should always be our major sheep-selling centre. (3) The third part of the question asked whether Northam controlled the catchment area of the majority of the state’s sheep. I do not know whether that is true. I think Katanning is the area that has the greater catchment area of sheep. There are sheep, of course, in the eastern wheatbelt and the Avon valley. One of the peculiarities that have come to light by virtue of advice from the agents is that, although there are sheep in the eastern wheatbelt, the numbers of sheep cannot be correlated to the flowthrough to a central saleyard because eastern wheatbelt producers tend to consign direct to clients rather than to saleyards. This is partly because of a greater degree of professionalism that comes from operating larger farms. I am therefore not at all sure of the capacity that Northam actually has to garner these sheep numbers. Muchea, of course, would be a stand-alone operation based on cattle alone. However, we also seek to service the sheep producers of the northern wheatbelt, the Gascoyne and the Murchison - to the extent that sheep still exist there - and the northern midlands area where a very large number of sheep still exist. For those producers, the location of a selling facility at Northam would be of little interest. I imagine that were it not for the existence of the Muchea yards, those sheep would have to continue their journey all the way south to Katanning. In terms of producers of prime stock, including those in the Avon valley adjacent to Northam yards, I am afraid that members are assuming that prime stock would be attracted to the Northam facility simply because they are in the Avon valley area. I do not believe that to be the case. There are prime stock producers who use saleyard facilities, but they tend to be pretty much rusted onto using the sheep abattoir at Katanning. I cannot foresee such producers being attracted to a new facility in Northam knowing that they would then lose the capacity to control the transport phase of prime stock. Of course, once they lose control of that transport phase, they would also lose their capacity to control bruising and other elements that would diminish the carcass value. I am therefore not convinced that there is a case for the Northam facility. Further to that, I am not convinced that a business case for the facility can be established such that would give a lender confidence that any reasonable internal herd rate of return could be achieved to justify a loan of that scale, bearing in mind that the loan would be in the order of $3 million.
(2) What basis or facts underpin the minister’s comment? (3) Is it correct that the majority of WA sheep are in the Northam region? Hon KIM CHANCE replied: (1) Yes, I do. (2) The basis for my forming that view is that I think there is less underpinning capacity in the Northam proposition than there is in either Muchea or Katanning. Were the Northam facility to go ahead, it would certainly impact to some degree on the Muchea saleyards and to a greater degree on the Katanning saleyards. Indeed, it could threaten the viability of the Katanning saleyards to the extent that the new facility may not even be built, which would be a tragedy given that the vast majority of the state’s sheep are within a 100-mile radius of Katanning. Obviously Katanning is and should always be our major sheep-selling centre. (3) The third part of the question asked whether Northam controlled the catchment area of the majority of the state’s sheep. I do not know whether that is true. I think Katanning is the area that has the greater catchment area of sheep. There are sheep, of course, in the eastern wheatbelt and the Avon valley. One of the peculiarities that have come to light by virtue of advice from the agents is that, although there are sheep in the eastern wheatbelt, the numbers of sheep cannot be correlated to the flowthrough to a central saleyard because eastern wheatbelt producers tend to consign direct to clients rather than to saleyards. This is partly because of a greater degree of professionalism that comes from operating larger farms. I am therefore not at all sure of the capacity that Northam actually has to garner these sheep numbers. Muchea, of course, would be a stand-alone operation based on cattle alone. However, we also seek to service the sheep producers of the northern wheatbelt, the Gascoyne and the Murchison - to the extent that sheep still exist there - and the northern midlands area where a very large number of sheep still exist. For those producers, the location of a selling facility at Northam would be of little interest. I imagine that were it not for the existence of the Muchea yards, those sheep would have to continue their journey all the way south to Katanning. In terms of producers of prime stock, including those in the Avon valley adjacent to Northam yards, I am afraid that members are assuming that prime stock would be attracted to the Northam facility simply because they are in the Avon valley area. I do not believe that to be the case. There are prime stock producers who use saleyard facilities, but they tend to be pretty much rusted onto using the sheep abattoir at Katanning. I cannot foresee such producers being attracted to a new facility in Northam knowing that they would then lose the capacity to control the transport phase of prime stock. Of course, once they lose control of that transport phase, they would also lose their capacity to control bruising and other elements that would diminish the carcass value. I am therefore not convinced that there is a case for the Northam facility. Further to that, I am not convinced that a business case for the facility can be established such that would give a lender confidence that any reasonable internal herd rate of return could be achieved to justify a loan of that scale, bearing in mind that the loan would be in the order of $3 million.
(3) Is it correct that the majority of WA sheep are in the Northam region? Hon KIM CHANCE replied: (1) Yes, I do. (2) The basis for my forming that view is that I think there is less underpinning capacity in the Northam proposition than there is in either Muchea or Katanning. Were the Northam facility to go ahead, it would certainly impact to some degree on the Muchea saleyards and to a greater degree on the Katanning saleyards. Indeed, it could threaten the viability of the Katanning saleyards to the extent that the new facility may not even be built, which would be a tragedy given that the vast majority of the state’s sheep are within a 100-mile radius of Katanning. Obviously Katanning is and should always be our major sheep-selling centre. (3) The third part of the question asked whether Northam controlled the catchment area of the majority of the state’s sheep. I do not know whether that is true. I think Katanning is the area that has the greater catchment area of sheep. There are sheep, of course, in the eastern wheatbelt and the Avon valley. One of the peculiarities that have come to light by virtue of advice from the agents is that, although there are sheep in the eastern wheatbelt, the numbers of sheep cannot be correlated to the flowthrough to a central saleyard because eastern wheatbelt producers tend to consign direct to clients rather than to saleyards. This is partly because of a greater degree of professionalism that comes from operating larger farms. I am therefore not at all sure of the capacity that Northam actually has to garner these sheep numbers. Muchea, of course, would be a stand-alone operation based on cattle alone. However, we also seek to service the sheep producers of the northern wheatbelt, the Gascoyne and the Murchison - to the extent that sheep still exist there - and the northern midlands area where a very large number of sheep still exist. For those producers, the location of a selling facility at Northam would be of little interest. I imagine that were it not for the existence of the Muchea yards, those sheep would have to continue their journey all the way south to Katanning. In terms of producers of prime stock, including those in the Avon valley adjacent to Northam yards, I am afraid that members are assuming that prime stock would be attracted to the Northam facility simply because they are in the Avon valley area. I do not believe that to be the case. There are prime stock producers who use saleyard facilities, but they tend to be pretty much rusted onto using the sheep abattoir at Katanning. I cannot foresee such producers being attracted to a new facility in Northam knowing that they would then lose the capacity to control the transport phase of prime stock. Of course, once they lose control of that transport phase, they would also lose their capacity to control bruising and other elements that would diminish the carcass value. I am therefore not convinced that there is a case for the Northam facility. Further to that, I am not convinced that a business case for the facility can be established such that would give a lender confidence that any reasonable internal herd rate of return could be achieved to justify a loan of that scale, bearing in mind that the loan would be in the order of $3 million.
Hon KIM CHANCE replied: (1) Yes, I do. (2) The basis for my forming that view is that I think there is less underpinning capacity in the Northam proposition than there is in either Muchea or Katanning. Were the Northam facility to go ahead, it would certainly impact to some degree on the Muchea saleyards and to a greater degree on the Katanning saleyards. Indeed, it could threaten the viability of the Katanning saleyards to the extent that the new facility may not even be built, which would be a tragedy given that the vast majority of the state’s sheep are within a 100-mile radius of Katanning. Obviously Katanning is and should always be our major sheep-selling centre. (3) The third part of the question asked whether Northam controlled the catchment area of the majority of the state’s sheep. I do not know whether that is true. I think Katanning is the area that has the greater catchment area of sheep. There are sheep, of course, in the eastern wheatbelt and the Avon valley. One of the peculiarities that have come to light by virtue of advice from the agents is that, although there are sheep in the eastern wheatbelt, the numbers of sheep cannot be correlated to the flowthrough to a central saleyard because eastern wheatbelt producers tend to consign direct to clients rather than to saleyards. This is partly because of a greater degree of professionalism that comes from operating larger farms. I am therefore not at all sure of the capacity that Northam actually has to garner these sheep numbers. Muchea, of course, would be a stand-alone operation based on cattle alone. However, we also seek to service the sheep producers of the northern wheatbelt, the Gascoyne and the Murchison - to the extent that sheep still exist there - and the northern midlands area where a very large number of sheep still exist. For those producers, the location of a selling facility at Northam would be of little interest. I imagine that were it not for the existence of the Muchea yards, those sheep would have to continue their journey all the way south to Katanning. In terms of producers of prime stock, including those in the Avon valley adjacent to Northam yards, I am afraid that members are assuming that prime stock would be attracted to the Northam facility simply because they are in the Avon valley area. I do not believe that to be the case. There are prime stock producers who use saleyard facilities, but they tend to be pretty much rusted onto using the sheep abattoir at Katanning. I cannot foresee such producers being attracted to a new facility in Northam knowing that they would then lose the capacity to control the transport phase of prime stock. Of course, once they lose control of that transport phase, they would also lose their capacity to control bruising and other elements that would diminish the carcass value. I am therefore not convinced that there is a case for the Northam facility. Further to that, I am not convinced that a business case for the facility can be established such that would give a lender confidence that any reasonable internal herd rate of return could be achieved to justify a loan of that scale, bearing in mind that the loan would be in the order of $3 million.
(1) Yes, I do. (2) The basis for my forming that view is that I think there is less underpinning capacity in the Northam proposition than there is in either Muchea or Katanning. Were the Northam facility to go ahead, it would certainly impact to some degree on the Muchea saleyards and to a greater degree on the Katanning saleyards. Indeed, it could threaten the viability of the Katanning saleyards to the extent that the new facility may not even be built, which would be a tragedy given that the vast majority of the state’s sheep are within a 100-mile radius of Katanning. Obviously Katanning is and should always be our major sheep-selling centre. (3) The third part of the question asked whether Northam controlled the catchment area of the majority of the state’s sheep. I do not know whether that is true. I think Katanning is the area that has the greater catchment area of sheep. There are sheep, of course, in the eastern wheatbelt and the Avon valley. One of the peculiarities that have come to light by virtue of advice from the agents is that, although there are sheep in the eastern wheatbelt, the numbers of sheep cannot be correlated to the flowthrough to a central saleyard because eastern wheatbelt producers tend to consign direct to clients rather than to saleyards. This is partly because of a greater degree of professionalism that comes from operating larger farms. I am therefore not at all sure of the capacity that Northam actually has to garner these sheep numbers. Muchea, of course, would be a stand-alone operation based on cattle alone. However, we also seek to service the sheep producers of the northern wheatbelt, the Gascoyne and the Murchison - to the extent that sheep still exist there - and the northern midlands area where a very large number of sheep still exist. For those producers, the location of a selling facility at Northam would be of little interest. I imagine that were it not for the existence of the Muchea yards, those sheep would have to continue their journey all the way south to Katanning. In terms of producers of prime stock, including those in the Avon valley adjacent to Northam yards, I am afraid that members are assuming that prime stock would be attracted to the Northam facility simply because they are in the Avon valley area. I do not believe that to be the case. There are prime stock producers who use saleyard facilities, but they tend to be pretty much rusted onto using the sheep abattoir at Katanning. I cannot foresee such producers being attracted to a new facility in Northam knowing that they would then lose the capacity to control the transport phase of prime stock. Of course, once they lose control of that transport phase, they would also lose their capacity to control bruising and other elements that would diminish the carcass value. I am therefore not convinced that there is a case for the Northam facility. Further to that, I am not convinced that a business case for the facility can be established such that would give a lender confidence that any reasonable internal herd rate of return could be achieved to justify a loan of that scale, bearing in mind that the loan would be in the order of $3 million.
(2) The basis for my forming that view is that I think there is less underpinning capacity in the Northam proposition than there is in either Muchea or Katanning. Were the Northam facility to go ahead, it would certainly impact to some degree on the Muchea saleyards and to a greater degree on the Katanning saleyards. Indeed, it could threaten the viability of the Katanning saleyards to the extent that the new facility may not even be built, which would be a tragedy given that the vast majority of the state’s sheep are within a 100-mile radius of Katanning. Obviously Katanning is and should always be our major sheep-selling centre. (3) The third part of the question asked whether Northam controlled the catchment area of the majority of the state’s sheep. I do not know whether that is true. I think Katanning is the area that has the greater catchment area of sheep. There are sheep, of course, in the eastern wheatbelt and the Avon valley. One of the peculiarities that have come to light by virtue of advice from the agents is that, although there are sheep in the eastern wheatbelt, the numbers of sheep cannot be correlated to the flowthrough to a central saleyard because eastern wheatbelt producers tend to consign direct to clients rather than to saleyards. This is partly because of a greater degree of professionalism that comes from operating larger farms. I am therefore not at all sure of the capacity that Northam actually has to garner these sheep numbers. Muchea, of course, would be a stand-alone operation based on cattle alone. However, we also seek to service the sheep producers of the northern wheatbelt, the Gascoyne and the Murchison - to the extent that sheep still exist there - and the northern midlands area where a very large number of sheep still exist. For those producers, the location of a selling facility at Northam would be of little interest. I imagine that were it not for the existence of the Muchea yards, those sheep would have to continue their journey all the way south to Katanning. In terms of producers of prime stock, including those in the Avon valley adjacent to Northam yards, I am afraid that members are assuming that prime stock would be attracted to the Northam facility simply because they are in the Avon valley area. I do not believe that to be the case. There are prime stock producers who use saleyard facilities, but they tend to be pretty much rusted onto using the sheep abattoir at Katanning. I cannot foresee such producers being attracted to a new facility in Northam knowing that they would then lose the capacity to control the transport phase of prime stock. Of course, once they lose control of that transport phase, they would also lose their capacity to control bruising and other elements that would diminish the carcass value. I am therefore not convinced that there is a case for the Northam facility. Further to that, I am not convinced that a business case for the facility can be established such that would give a lender confidence that any reasonable internal herd rate of return could be achieved to justify a loan of that scale, bearing in mind that the loan would be in the order of $3 million.
(3) The third part of the question asked whether Northam controlled the catchment area of the majority of the state’s sheep. I do not know whether that is true. I think Katanning is the area that has the greater catchment area of sheep. There are sheep, of course, in the eastern wheatbelt and the Avon valley. One of the peculiarities that have come to light by virtue of advice from the agents is that, although there are sheep in the eastern wheatbelt, the numbers of sheep cannot be correlated to the flowthrough to a central saleyard because eastern wheatbelt producers tend to consign direct to clients rather than to saleyards. This is partly because of a greater degree of professionalism that comes from operating larger farms. I am therefore not at all sure of the capacity that Northam actually has to garner these sheep numbers. Muchea, of course, would be a stand-alone operation based on cattle alone. However, we also seek to service the sheep producers of the northern wheatbelt, the Gascoyne and the Murchison - to the extent that sheep still exist there - and the northern midlands area where a very large number of sheep still exist. For those producers, the location of a selling facility at Northam would be of little interest. I imagine that were it not for the existence of the Muchea yards, those sheep would have to continue their journey all the way south to Katanning. In terms of producers of prime stock, including those in the Avon valley adjacent to Northam yards, I am afraid that members are assuming that prime stock would be attracted to the Northam facility simply because they are in the Avon valley area. I do not believe that to be the case. There are prime stock producers who use saleyard facilities, but they tend to be pretty much rusted onto using the sheep abattoir at Katanning. I cannot foresee such producers being attracted to a new facility in Northam knowing that they would then lose the capacity to control the transport phase of prime stock. Of course, once they lose control of that transport phase, they would also lose their capacity to control bruising and other elements that would diminish the carcass value. I am therefore not convinced that there is a case for the Northam facility. Further to that, I am not convinced that a business case for the facility can be established such that would give a lender confidence that any reasonable internal herd rate of return could be achieved to justify a loan of that scale, bearing in mind that the loan would be in the order of $3 million.
(2) What basis or facts underpin the minister’s comment? (3) Is it correct that the majority of WA sheep are in the Northam region? Hon KIM CHANCE replied: (1) Yes, I do. (2) The basis for my forming that view is that I think there is less underpinning capacity in the Northam proposition than there is in either Muchea or Katanning. Were the Northam facility to go ahead, it would certainly impact to some degree on the Muchea saleyards and to a greater degree on the Katanning saleyards. Indeed, it could threaten the viability of the Katanning saleyards to the extent that the new facility may not even be built, which would be a tragedy given that the vast majority of the state’s sheep are within a 100-mile radius of Katanning. Obviously Katanning is and should always be our major sheep-selling centre. (3) The third part of the question asked whether Northam controlled the catchment area of the majority of the state’s sheep. I do not know whether that is true. I think Katanning is the area that has the greater catchment area of sheep. There are sheep, of course, in the eastern wheatbelt and the Avon valley. One of the peculiarities that have come to light by virtue of advice from the agents is that, although there are sheep in the eastern wheatbelt, the numbers of sheep cannot be correlated to the flowthrough to a central saleyard because eastern wheatbelt producers tend to consign direct to clients rather than to saleyards. This is partly because of a greater degree of professionalism that comes from operating larger farms. I am therefore not at all sure of the capacity that Northam actually has to garner these sheep numbers. Muchea, of course, would be a stand-alone operation based on cattle alone. However, we also seek to service the sheep producers of the northern wheatbelt, the Gascoyne and the Murchison - to the extent that sheep still exist there - and the northern midlands area where a very large number of sheep still exist. For those producers, the location of a selling facility at Northam would be of little interest. I imagine that were it not for the existence of the Muchea yards, those sheep would have to continue their journey all the way south to Katanning. In terms of producers of prime stock, including those in the Avon valley adjacent to Northam yards, I am afraid that members are assuming that prime stock would be attracted to the Northam facility simply because they are in the Avon valley area. I do not believe that to be the case. There are prime stock producers who use saleyard facilities, but they tend to be pretty much rusted onto using the sheep abattoir at Katanning. I cannot foresee such producers being attracted to a new facility in Northam knowing that they would then lose the capacity to control the transport phase of prime stock. Of course, once they lose control of that transport phase, they would also lose their capacity to control bruising and other elements that would diminish the carcass value. I am therefore not convinced that there is a case for the Northam facility. Further to that, I am not convinced that a business case for the facility can be established such that would give a lender confidence that any reasonable internal herd rate of return could be achieved to justify a loan of that scale, bearing in mind that the loan would be in the order of $3 million.
(3) Is it correct that the majority of WA sheep are in the Northam region? Hon KIM CHANCE replied: (1) Yes, I do. (2) The basis for my forming that view is that I think there is less underpinning capacity in the Northam proposition than there is in either Muchea or Katanning. Were the Northam facility to go ahead, it would certainly impact to some degree on the Muchea saleyards and to a greater degree on the Katanning saleyards. Indeed, it could threaten the viability of the Katanning saleyards to the extent that the new facility may not even be built, which would be a tragedy given that the vast majority of the state’s sheep are within a 100-mile radius of Katanning. Obviously Katanning is and should always be our major sheep-selling centre. (3) The third part of the question asked whether Northam controlled the catchment area of the majority of the state’s sheep. I do not know whether that is true. I think Katanning is the area that has the greater catchment area of sheep. There are sheep, of course, in the eastern wheatbelt and the Avon valley. One of the peculiarities that have come to light by virtue of advice from the agents is that, although there are sheep in the eastern wheatbelt, the numbers of sheep cannot be correlated to the flowthrough to a central saleyard because eastern wheatbelt producers tend to consign direct to clients rather than to saleyards. This is partly because of a greater degree of professionalism that comes from operating larger farms. I am therefore not at all sure of the capacity that Northam actually has to garner these sheep numbers. Muchea, of course, would be a stand-alone operation based on cattle alone. However, we also seek to service the sheep producers of the northern wheatbelt, the Gascoyne and the Murchison - to the extent that sheep still exist there - and the northern midlands area where a very large number of sheep still exist. For those producers, the location of a selling facility at Northam would be of little interest. I imagine that were it not for the existence of the Muchea yards, those sheep would have to continue their journey all the way south to Katanning. In terms of producers of prime stock, including those in the Avon valley adjacent to Northam yards, I am afraid that members are assuming that prime stock would be attracted to the Northam facility simply because they are in the Avon valley area. I do not believe that to be the case. There are prime stock producers who use saleyard facilities, but they tend to be pretty much rusted onto using the sheep abattoir at Katanning. I cannot foresee such producers being attracted to a new facility in Northam knowing that they would then lose the capacity to control the transport phase of prime stock. Of course, once they lose control of that transport phase, they would also lose their capacity to control bruising and other elements that would diminish the carcass value. I am therefore not convinced that there is a case for the Northam facility. Further to that, I am not convinced that a business case for the facility can be established such that would give a lender confidence that any reasonable internal herd rate of return could be achieved to justify a loan of that scale, bearing in mind that the loan would be in the order of $3 million.
Hon KIM CHANCE replied: (1) Yes, I do. (2) The basis for my forming that view is that I think there is less underpinning capacity in the Northam proposition than there is in either Muchea or Katanning. Were the Northam facility to go ahead, it would certainly impact to some degree on the Muchea saleyards and to a greater degree on the Katanning saleyards. Indeed, it could threaten the viability of the Katanning saleyards to the extent that the new facility may not even be built, which would be a tragedy given that the vast majority of the state’s sheep are within a 100-mile radius of Katanning. Obviously Katanning is and should always be our major sheep-selling centre. (3) The third part of the question asked whether Northam controlled the catchment area of the majority of the state’s sheep. I do not know whether that is true. I think Katanning is the area that has the greater catchment area of sheep. There are sheep, of course, in the eastern wheatbelt and the Avon valley. One of the peculiarities that have come to light by virtue of advice from the agents is that, although there are sheep in the eastern wheatbelt, the numbers of sheep cannot be correlated to the flowthrough to a central saleyard because eastern wheatbelt producers tend to consign direct to clients rather than to saleyards. This is partly because of a greater degree of professionalism that comes from operating larger farms. I am therefore not at all sure of the capacity that Northam actually has to garner these sheep numbers. Muchea, of course, would be a stand-alone operation based on cattle alone. However, we also seek to service the sheep producers of the northern wheatbelt, the Gascoyne and the Murchison - to the extent that sheep still exist there - and the northern midlands area where a very large number of sheep still exist. For those producers, the location of a selling facility at Northam would be of little interest. I imagine that were it not for the existence of the Muchea yards, those sheep would have to continue their journey all the way south to Katanning. In terms of producers of prime stock, including those in the Avon valley adjacent to Northam yards, I am afraid that members are assuming that prime stock would be attracted to the Northam facility simply because they are in the Avon valley area. I do not believe that to be the case. There are prime stock producers who use saleyard facilities, but they tend to be pretty much rusted onto using the sheep abattoir at Katanning. I cannot foresee such producers being attracted to a new facility in Northam knowing that they would then lose the capacity to control the transport phase of prime stock. Of course, once they lose control of that transport phase, they would also lose their capacity to control bruising and other elements that would diminish the carcass value. I am therefore not convinced that there is a case for the Northam facility. Further to that, I am not convinced that a business case for the facility can be established such that would give a lender confidence that any reasonable internal herd rate of return could be achieved to justify a loan of that scale, bearing in mind that the loan would be in the order of $3 million.
(1) Yes, I do. (2) The basis for my forming that view is that I think there is less underpinning capacity in the Northam proposition than there is in either Muchea or Katanning. Were the Northam facility to go ahead, it would certainly impact to some degree on the Muchea saleyards and to a greater degree on the Katanning saleyards. Indeed, it could threaten the viability of the Katanning saleyards to the extent that the new facility may not even be built, which would be a tragedy given that the vast majority of the state’s sheep are within a 100-mile radius of Katanning. Obviously Katanning is and should always be our major sheep-selling centre. (3) The third part of the question asked whether Northam controlled the catchment area of the majority of the state’s sheep. I do not know whether that is true. I think Katanning is the area that has the greater catchment area of sheep. There are sheep, of course, in the eastern wheatbelt and the Avon valley. One of the peculiarities that have come to light by virtue of advice from the agents is that, although there are sheep in the eastern wheatbelt, the numbers of sheep cannot be correlated to the flowthrough to a central saleyard because eastern wheatbelt producers tend to consign direct to clients rather than to saleyards. This is partly because of a greater degree of professionalism that comes from operating larger farms. I am therefore not at all sure of the capacity that Northam actually has to garner these sheep numbers. Muchea, of course, would be a stand-alone operation based on cattle alone. However, we also seek to service the sheep producers of the northern wheatbelt, the Gascoyne and the Murchison - to the extent that sheep still exist there - and the northern midlands area where a very large number of sheep still exist. For those producers, the location of a selling facility at Northam would be of little interest. I imagine that were it not for the existence of the Muchea yards, those sheep would have to continue their journey all the way south to Katanning. In terms of producers of prime stock, including those in the Avon valley adjacent to Northam yards, I am afraid that members are assuming that prime stock would be attracted to the Northam facility simply because they are in the Avon valley area. I do not believe that to be the case. There are prime stock producers who use saleyard facilities, but they tend to be pretty much rusted onto using the sheep abattoir at Katanning. I cannot foresee such producers being attracted to a new facility in Northam knowing that they would then lose the capacity to control the transport phase of prime stock. Of course, once they lose control of that transport phase, they would also lose their capacity to control bruising and other elements that would diminish the carcass value. I am therefore not convinced that there is a case for the Northam facility. Further to that, I am not convinced that a business case for the facility can be established such that would give a lender confidence that any reasonable internal herd rate of return could be achieved to justify a loan of that scale, bearing in mind that the loan would be in the order of $3 million.
(2) The basis for my forming that view is that I think there is less underpinning capacity in the Northam proposition than there is in either Muchea or Katanning. Were the Northam facility to go ahead, it would certainly impact to some degree on the Muchea saleyards and to a greater degree on the Katanning saleyards. Indeed, it could threaten the viability of the Katanning saleyards to the extent that the new facility may not even be built, which would be a tragedy given that the vast majority of the state’s sheep are within a 100-mile radius of Katanning. Obviously Katanning is and should always be our major sheep-selling centre. (3) The third part of the question asked whether Northam controlled the catchment area of the majority of the state’s sheep. I do not know whether that is true. I think Katanning is the area that has the greater catchment area of sheep. There are sheep, of course, in the eastern wheatbelt and the Avon valley. One of the peculiarities that have come to light by virtue of advice from the agents is that, although there are sheep in the eastern wheatbelt, the numbers of sheep cannot be correlated to the flowthrough to a central saleyard because eastern wheatbelt producers tend to consign direct to clients rather than to saleyards. This is partly because of a greater degree of professionalism that comes from operating larger farms. I am therefore not at all sure of the capacity that Northam actually has to garner these sheep numbers. Muchea, of course, would be a stand-alone operation based on cattle alone. However, we also seek to service the sheep producers of the northern wheatbelt, the Gascoyne and the Murchison - to the extent that sheep still exist there - and the northern midlands area where a very large number of sheep still exist. For those producers, the location of a selling facility at Northam would be of little interest. I imagine that were it not for the existence of the Muchea yards, those sheep would have to continue their journey all the way south to Katanning. In terms of producers of prime stock, including those in the Avon valley adjacent to Northam yards, I am afraid that members are assuming that prime stock would be attracted to the Northam facility simply because they are in the Avon valley area. I do not believe that to be the case. There are prime stock producers who use saleyard facilities, but they tend to be pretty much rusted onto using the sheep abattoir at Katanning. I cannot foresee such producers being attracted to a new facility in Northam knowing that they would then lose the capacity to control the transport phase of prime stock. Of course, once they lose control of that transport phase, they would also lose their capacity to control bruising and other elements that would diminish the carcass value. I am therefore not convinced that there is a case for the Northam facility. Further to that, I am not convinced that a business case for the facility can be established such that would give a lender confidence that any reasonable internal herd rate of return could be achieved to justify a loan of that scale, bearing in mind that the loan would be in the order of $3 million.
(3) The third part of the question asked whether Northam controlled the catchment area of the majority of the state’s sheep. I do not know whether that is true. I think Katanning is the area that has the greater catchment area of sheep. There are sheep, of course, in the eastern wheatbelt and the Avon valley. One of the peculiarities that have come to light by virtue of advice from the agents is that, although there are sheep in the eastern wheatbelt, the numbers of sheep cannot be correlated to the flowthrough to a central saleyard because eastern wheatbelt producers tend to consign direct to clients rather than to saleyards. This is partly because of a greater degree of professionalism that comes from operating larger farms. I am therefore not at all sure of the capacity that Northam actually has to garner these sheep numbers. Muchea, of course, would be a stand-alone operation based on cattle alone. However, we also seek to service the sheep producers of the northern wheatbelt, the Gascoyne and the Murchison - to the extent that sheep still exist there - and the northern midlands area where a very large number of sheep still exist. For those producers, the location of a selling facility at Northam would be of little interest. I imagine that were it not for the existence of the Muchea yards, those sheep would have to continue their journey all the way south to Katanning. In terms of producers of prime stock, including those in the Avon valley adjacent to Northam yards, I am afraid that members are assuming that prime stock would be attracted to the Northam facility simply because they are in the Avon valley area. I do not believe that to be the case. There are prime stock producers who use saleyard facilities, but they tend to be pretty much rusted onto using the sheep abattoir at Katanning. I cannot foresee such producers being attracted to a new facility in Northam knowing that they would then lose the capacity to control the transport phase of prime stock. Of course, once they lose control of that transport phase, they would also lose their capacity to control bruising and other elements that would diminish the carcass value. I am therefore not convinced that there is a case for the Northam facility. Further to that, I am not convinced that a business case for the facility can be established such that would give a lender confidence that any reasonable internal herd rate of return could be achieved to justify a loan of that scale, bearing in mind that the loan would be in the order of $3 million.
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