Saleyards lurches toward lockdown

By Tim Howard

Former Richmond Valley mayor Ernie Bennett has savaged changes to the Northern Rivers Livestock Exchange fee structure which threaten to shutdown operations at the saleyards from next week.
Richmond Valley Council has given local cattle agents an ultimatum to sign a contract for a three-year permit to operate at the NRLX from July 1, when the last agreement expires.
The agents have all refused, creating the possibility there would be no auctioneers available to run cattle sales at the centre, which could affect the big All Breeds sale looming late in July.
Mr Bennett, who was mayor from 2012 to 2016 and instrumental in the $14 million plans to upgrade the saleyards a decade ago, said the council plan was little more than a power grab at the expense of the local farming community.
“This threat of locking them out really disappoints me, that council would take that approach,” Mr Bennett said.
“Councils are meant to be there to help the people, not to hinder them and fight them.
“If they lock the agents out, well that’s all the grazing community locked out, interfering with our livelihoods, all for some power grab.”
The situation has developed since March when Richmond Valley Council resolved it would change the way it collected fees from the NRLX operation from July 1.
The council also planned to increase the number of agents using the NRLX, including looking for agents outside the area.
It asked for expressions of interest from potential agents with a target of seven, but only five expressed interest and one of those has been rejected.
And to cap it off, the council said it would take over the handling of the cattle after they were sold, a task up to now covered by the agents.
The agents have been silent. Casino Auctioneers Association president Andrew Summerville said the agents would allow the current agreements to run, but with June 30 less than a week off, “the clock was ticking”.
While the agents are silent, others like Mr Bennett and grazier and treasurer of the Richmond River Beef Producers Association Holger Zeiler, have been more than willing to speak out.
They have been forthright in their language, describing the council’s tactics as “blackmail”, the approach as “bully-boy”, the motivations for it as “empire building” and clauses in agents’ contracts as “gag orders”.
On June 14 RVC and the cattle vendors met at Kyogle where saleyards manager Brad Willis explained the changes.
All the agents attended, but did not address the meeting, something that Mr Bennett noted.
“The agents were all there, but not one of them opened their mouth, so obviously the council has got them gagged. Too frightened to say anything,” Mr Bennett said.
Mr Zeiler also attended the meeting but had a more charitable interpretation of the agents’ actions.
“Part of the problem is the auctioneers feel that they can’t say anything, which is the first thing that piqued my notice when I was speaking to my auctioneer,” he said.
“There is a clause in their current contract saying that they cannot bring council into disrepute.
“The second thing is they’re in the EOI process, so the perception is that if they make too much noise about what they’re feeling, that’s going to compromise the EOI process
“I’m sure council will say that they wouldn’t let that sway them, but if nothing else, that perception’s there.”
At the meeting, Mr Macdonald and Mr Willis said the council needed to get a better return from the saleyards for the ratepayer and the reforms it proposed would do that.
The key change has been transitioning of the agent business usage fee from a fixed per head charge to 0.2 percent of gross revenue.
He said this equated to $2 for each $1000 of livestock sold, which would be paid by the agents from their revenue of $45-$55 from each $1000, as agent commissions vary from 4.5-5.5 percent.
Mr Macdonald said gross revenue at the NRLX increased from $76,479,965 in 2017-2018 to $210,437,317 in 2021-2022 result in agents’ commissions jumping from $3,823,998 to $10,521,865 during the same period.
He said council must capitalise on this for the benefit of the Richmond Valley community, especially since it had been successful in obtaining $11 million in grant funding from the Federal and NSW governments to fully upgrade the facility to a modern roofed-and-soft-floor livestock selling centre.
To achieve this council had invested more than $4 million as its contribution to the NRLX’s upgrade, requiring borrowings of $3.5 million.
“It is critically important council and all NRLX users work together to ensure the saleyards remain the number one cattle selling centre on the North Coast,” Mr Macdonald said.
“Vendors have historically contributed most of the fees to the NRLX business and council has been implementing an incremental realignment of the cost sharing between vendors and agents from the previous model since the completion of the upgrade.
“The 2023-2024 NRLX Revenue Policy shows no change in core vendor sale fees and these fees will remain fixed to June 2026 – this means there have been no vendor sale fee changes in six years.”

He listed the benefits for agents:
• NRLX gross sales revenue – $744,976,044
• Agent Business Usage fees to Council – $549,915
• Agent Commission at five percent – $37,248,802
• Agent rent as a percentage of turnover – 1.5 percent

Advertisements

But there are some key figures, like Mr Bennett, who disagree with this assessment.
As a former mayor Mr Bennett said attempting to run the NRLX “profitably” was not in council’s remit.

Former Richmond Valley mayor Ernie Bennett

He recalled when he had become Richmond Valley mayor one of his main challenges was to turn around a push to get rid of the Casino saleyards.
“I’d been getting asked for years by business people in Casino and lots of farmers about council wanting to get rid of the saleyards,” Mr Bennett said.
“That was one of my main reasons for standing there.
“I thought I’d lost the battle when council voted to get rid of the saleyards by leasing it out for $1 a year for 60 years.
“And I was the only councillor that voted against. I was fortunate enough to get a rescission motion in as soon as the meeting was over.
“I held it up and was able to turn a situation around after we had a change of general manager.”
But Mr Bennett said trying to make the saleyards “profitable” would backfire on the council.
“I have always been a believer that council should be able to provide a facility like that and at a less rate than private enterprise,” he said.
“If council had leased it out at $1 a year private enterprise would have jacked the price up because they’re only in the game to make money.
“Council should be there to provide services and they do for every other part of the community.
There appears to be a dislike for the farming community in there.
“All the councillors that were there between 2012 and 2016. Everyone of them did not want the council to hang onto the yards.”
In the farming community there’s also a belief the council was there to provide services, not to make money.
Mr Zeiler said the council needed to be realistic about where the increased revenue it projected would come from.
“I don’t think it’s council’s job to try and make money out of any of their facilities,” he said.
“Council’s job is to provide facilities and not make money off them.
“I know that every time that’s mentioned, the council talks about depreciation.
“I know it’s a cost, but it’s not a cash cost.
“At the end of the day the council didn’t pay $14 million for the saleyards. They paid $4 million out of their money.
“I find it very very difficult to think that in 15 or 20 years time, when they’ve got to do major upgrades at the saleyards, it’s the same as any other project, that council is just going to start looking for grants.
“That’s how councils work. All their big projects get done with grants.”
Mr Bennett was sceptical about the council’s altruism toward ratepayers, instead suspecting a case of “empire building” among some senior staff.
“It appears the council wants to take complete control and I can’t help but think it’s an empire building exercise for council employees, a justification for charging more, all that type of stuff,” he said.
“If you’re managing the saleyards and you have one person under you, your wage would be quite significantly lower than if you had 10 people under you, or 20.
“The more people they take over, the more people underneath, the better your pay. That’s how it seems to me.”
Both cattle producers were sceptical about the council’s plans to handle cattle after they were sold.
Mr Heiler wondered how an employment agency could train people effectively for this type of
“The whole training thing,” he said. “You can’t train people to handle cattle. It’s an experience thing.
“It’s something you learn. You can train people to get better at handling cattle, but you can’t train people to handle cattle.”
Mr Bennett was equally dismissive.
“If I was was looking for people to work cattle, I wouldn’t be looking in Byron Bay,” he said.
Mr Zeiler was worried there were other fees, like the cost of dealing with animals that died at the saleyards, which were not included in the new fee structure.
“For example, sometimes the cattle stay in the yard to collect truckloads from different centres and an animal has died,” he said.
“The auctioneer has gone down there and he’s removed the animal off his own bat.
“His opinion was in the system that’s proposed that’s going to cost $200+ for a call out fee, then that animal would go to the dump and that would be another $200 fee for animal to be put at the dump because its a biological thing that’s very expensive.
“Then that cost would go to the owner of the cattle. Like the buyer of the cattle.
“The auctioneer handles that because they want to keep relationships intact and he said to me if that happens a few times that buyer is not going to buy here.”
Mr Macdonald dismissed a lot of the criticism of the fee changes and operations at the NRLX, which was the culmination of work at the centre since 2016.
“We’ve invested $15 million into the facility with the support of the Federal and State governments,” he said.
“And we’ve been gradually adjusting the fees and charges and basically it’s the way the contributions are share between the producers, the agents and what council needs to continue to run it well.
“The agents have gone from paying next to nothing in 2016. We’ve gradually increased it.
“But even if with the increase council resolved to implement back in March – and we got no feedback on from any of the agents – we are still cheaper than equivalent standard saleyards anywhere else.”
He said other saleyards used a .3% of the sale price of an animal as their saleyard fee.
“We looked at that and our council certainly considered it, but our recommendation to go to the .2%, which is $2 in every $1000,” he said.
“Or $2 of the $45 to $50 the agents make in commission.
“Anyone who looks at this can see it’s a very good deal.
“Our council is very strong on this. It’s a fair deal and they need to sign it.”
Mr Macdonald admitted the council would not have agents ready for the saleyard from July 1.

General Manager, Richmond Valley Counci Vaughn Macdonald

“Our preference is the local agents sign and get on with business,” he said.
“But they like a stoush and we’ll have to deal with that and pursue some other options to have the saleyards operating as we know it’s important for our community, for producers who work out there or work in an associated industry.
He shared concerns about the Allbreeds sale at the end of July,
“Yes, it’s at risk if there’s no agents operating at the saleyards at that time,” Mr Macdonald said.
“They’re the things the agents should be considering because it’s going to have an impact on their business and those producers who have been loyal to them for a long time.”
But he said council had no choice about introducing the new fees.
“Councils are required to run in a financially sustainable manner and that’s what these fee increases will allow us to do,” he said.
“Vendors like Ernie Bennett won’t see a fee increase. Fees for vendors have not increased for three years and with what council had adopted they won’t increase for another three years.
“Vendors are not being impacted. The increase in fees is to the agent and if the agent is passing that on to the vendor, then the vendor needs to do something about that. Change agents or challenge them.”
Mr Macdonald said the reason the council was taking over post-sale management of cattle was because the agents had not been doing a good job.
“We’ve been telling them for years and that’s not based just on our observations, but feedback from transporters and buyers.
“And this is what saleyards similar to ours are run like. You take control and actually employ staff, train them, look after them and have consistency.
“We’re taking over control of the feed because it’s been below standard.
“It’s all about continuing to improve the standard of how the saleyard operates.
“To take that on, yes there will be fees levied on the agents, but they’re fees that they already have expenditure.
“That expenditure will no longer go to pay those people and outlay those funds. They will just pay a per head fee to us and we will manage the cattle from the fall of the hammer to make sure they are looked after.
“Eight of the top 10 saleyards in the country have that management model.”
He said the agents had been given opportunities to improve this aspect saleyard operations and failed to do it.
He also defended the choice of Byron Bay employment agency Spinifex to provide workers for the saleyards.
He said fact the company had an office in Byron Bay made them an easy target for doubters, but said he was confident they had a good grasp of the people needed at the NRLX,
Mr Maconald said it was likely many current staff would take the opportunity to work there, but did admit there were likely to be some who would not.
“We’re responsible for the saleyards and the best way to manage that is to have control of the operating environment: how long people work, how long they’re out there, how well they’re trained, all those factors,” he said.
He said the fee for dealing with dead animals would be met by council if it was proved the beast had died because of something that occurred after the sale.
He said beasts that were sick or injured when they arrived at the saleyard and subsequently died would not be covered.
The Northern Rivers Times has heard there are issues with contracts council has asked the agents to sign, but as the agents have failed to comment until after the expiry of the current licence on June 30, this will be tackled in a future article.