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Geelong SaleyardsFeasibility Study

CITY OF GREATER GEELONG

OCTOBER 2014

U R B A N E N T E R P R I S E3 8 9 S T G E O R G E S R D

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Authors

Matt Ainsaar (Urban Enterprise)Paul Shipp (Urban Enterprise)Darrel Brewin (Darrel Brewin and Associates)© Copyright, Urban Enterprise Pty Ltd, October 2014.

This work is copyright. Apart from any use as permitted under Copyright Act 1963, no part may be reproduced without written permission of Urban Enterprise Pty Ltd.

Document Information

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Disclaimer

Neither Urban Enterprise Pty. Ltd. nor any member or employee of Urban Enterprise Pty. Ltd. takes responsibility in any way whatsoever to any person or organisation (other than that for which this report has been prepared) in respect of the information set out in this report, including any errors or omissions therein. In the course of our preparation of this report, projections have been prepared on the basis of assumptions and methodology which have been described in the report. It is possible that some of the assumptions underlying the projections may change. Nevertheless, the professional judgement of the members and employees of Urban Enterprise Pty. Ltd. have been applied in making these assumptions, such that they constitute an understandable basis for estimates and projections. Beyond this, to the extent that the assumptions do not materialise, the estimates and projections of achievable results may vary.

CONTENTS

EXECUTIVE SUMMARY 11. INTRODUCTION 5

1.1 . OVERVIEW 51.2 . METHOD 5

2. BACKGROUND 62.1 . CONTEXT 62.2 . PROPERTY 82.3 . HERITAGE IMPROVEMENTS 82.4 . PLANNING CONTEXT 92.5 . KEY F INDINGS AND IMPLICATIONS 12

3. PREVIOUS STUDIES 143.1 . INTRODUCTION 143.2 . GEELONG SALEYARDS FEASIBIL ITY (1998) 143.3 . SALEYARD OPERATIONS AUDIT (2002) 153.4 . CONSERVATION MANAGEMENT PLAN (2007) 163.5 . SALEYARD OPERATIONS AUDIT (2012) 193.6 . SALEYARDS UPDATE REPORT (MAY 2013) 203.7 . SALEYARDS UPDATE REPORT (NOV 2013) 213.8 . KEY F INDINGS AND IMPLICATIONS 21

4. SALEYARDS ANALYSIS 234.1 . INTRODUCTION 234.2 . THROUGHPUT 234.3 . FEES 264.4 . OTHER SALES AND USES 284.5 . F INANCIAL PERFORMANCE 294.6 . KEY F INDINGS AND IMPLICATIONS 33

5. CONSULTATION 355.1 . INTRODUCTION 355.2 . COUNCILLORS 355.3 . COUNCIL OFF ICERS 355.4 . SALEYARDS STAFF 385.5 . HERITAGE EXPERTS 405.6 . KEY USERS AND STAKEHOLDERS 41

6. ISSUES, OPPORTUNITIES AND OPTIONS 436.1 . INTRODUCTION 436.2 . ISSUES 436.3 . OPPORTUNIT IES 446.4 . OPTIONS 46

7. OPTIONS ASSESSMENT 507.1 . INTRODUCTION 507.2 . OPTIONS ASSESSMENT MATRIX 507.3 . PREFERRED OPTION 50

8. RECOMMENDATIONS 528.1 . OVERVIEW 528.2 . RECOMMENDED APPROACH 528.3 . LAND USE AND PROPERTY CONSIDERATIONS FOR DISPOSAL 54

URBAN EN TERPR ISE PTY L TDO C T O B E R 2 0 1 4

EXECUTIVE SUMMARY

BACKGROUND

This report has been prepared by Urban Enterprise and Darrel Brewin and Associates for the City of Greater Geelong (Council). The report has been prepared in response to the project brief, which called for an independent assessment of the Geelong Saleyards to consider its economic, social, risk and environmental aspects, including stakeholder inputs, in order to recommend the highest and best use for the site.

The Saleyards are located in North Geelong, within close proximity to the city centre and the inner urban areas of West Geelong and North Geelong. The site also has good access to Melbourne, Ballarat and Colac, which can all be reached in less than 75 minutes by car.

The site is located at the interface of a mixture of land uses, including residential, industrial and commercial uses, as well as former open space / recreational land (golf course). Whilst once strategically located in an outlying area without neighbouring urban uses, the Saleyards are now completely surrounded by urban development.

The site contains a variety of uses, however the key components include yards for the auction of sheep, cattle and poultry as well as a profitable truck wash facility. A large proportion of the site is un-utilised.

The northern portion of the site is zoned Industrial 1 (IN1Z) and the southern portion is zoned for Public Park and Recreation (PPRZ). The Industrial 1 Zone extends to the north and forms part of a wider North Geelong / Norlane industrial corridor.

The site is also subject to a Heritage Overlay (HO) and contains buildings of primary and secondary significance. The site is also under a design and development overlay (DDO20) as well as a small portion of the site subject to the Special Building Overlay (SBO).

A number of reports and audits have been conducted into the operations of the Geelong Saleyards. Common themes identified in these studies include:

The Saleyards have heritage, social and political significance, due to the continued operation of the Saleyards at the site since 1869, the strong links to the Geelong local Council, the original heritage elements and design of the site, and the use of the site as a meeting place for farmers and community members;

Council has been subsidising the operation of the facility for many years, with a consistent financial loss being reported since the mid 2000s. Council has been concerned with the ongoing viability of the Saleyards for some time;

The current site is not ideally located from a logistics perspective – a larger, custom built site with better access would be required for the facility to increase volume and efficiency;

Significant health and safety risks have been identified and significant investment is required to improve current facilities;

A rolling program of improvements has been undertaken, however a fire destroyed the main office buildings at the Saleyards.

Previous studies have identified the ongoing challenges in managing the Saleyards and undertaking the necessary improvements to ensure that the facility is safe and efficient. The heritage significance is closely

1 G E E L O N G S A L E Y A R D S FEAS IB I L ITY S TUDY

linked to the ongoing operation of the site, however the ongoing financial loss presents Council with the need to reconsider the viability of the site in the context of a declining Saleyards market.

SALEYARDS ANALYSISAnalysis of the operational and financial performance of the Saleyards resulted in the following key findings:

Cattle throughput was 8,160 head in 2013. Throughput has declined over the past 10 years, at an average annual rate of -10.33%;

Sheep throughput was 55,302 head in 2013. Throughput has declined over the past 4 years at an average rate of -10.48% per annum;

The decline in throughput is not unique to Geelong, with the Victorian average showing a cattle throughput decrease of -11.37% per annum over the past 10 years and a decrease in sheep throughput of -7.36% per annum over the past 4 years. However, the Geelong throughput decline is even greater than the Victorian average for both cattle and sheep;

The saleyards are performing poorly financially. The saleyards accounts have recorded a loss in each of the past eight financial years of between $49,266 and $193,876. The net balance over the analysis period was a combined loss of $1.08m (real values);

The long term income trend has been declining, generally in line with a reduction in throughput. Expenditure has remained relatively consistent over time;

Vendor and agents fees are similar to the Victorian average. There may be the opportunity to increase fees within the range set by other saleyards, however an analysis undertaken by Council shows that fees would need to be doubled in order for the saleyards to ‘break even’;

Since 2007/08 Council has invested $1.7 million to subsidise the operation of the Saleyards including capital improvements.

The poor financial performance and declining throughput demonstrates that the current Saleyards operations have been unprofitable for many years. The scale of throughput is significantly lower than competing saleyards in Ballarat and Colac, and other western region saleyards such as Hamilton and Camperdown.

In addition to the significant operating losses, significant capital investment has been made over the past 7 years to improve the facilities and buildings at the site. Despite this investment, the facility still requires significant investment to complete the recommendations of the CMP, and to improve the overall standard and safety of facilities for employees and users.

Despite significant investment in the Saleyards, operational losses have continued to occur. Overall Victorian trends suggest that it is unlikely that the Saleyards would be able to increase throughput or significantly improve financial performance under current conditions. The Saleyards industry is declining overall, as alternative selling methods replace part of the traditional auction market.

CONSULTATION

A detailed consultation program was undertaken, including Council officers, Saleyards staff, Councillors, heritage experts, Saleyards users (producers, buyers, sellers), stock agents, transport operators, Scan clear, Livestock Saleyards Association of Victoria and the Department of Environment and Primary Industries.

Consultation raised a range of issues and opportunities for the Saleyards, relating to economic, heritage, environmental and social factors. As an overview, consultation confirmed that the

C ITY OF GREATER GEEL ONG 2O C T O B E R 2 0 1 4

Saleyards industry is in decline, and the Geelong Saleyards is performing poorly primarily due to low and declining throughput and the high cost of maintenance and compliance with regulations. Saleyards are becoming more regionalised across Australia, as economies of scale become more important to cover the costs of regulation compliance and to compete with alternative forms of selling. Whilst the Saleyards perform an important social function, the number of users has been declining over time, and the loss of the Market Offices Building has further reduced opportunities for social interaction at the site. It was often stated that the Saleyards are unsustainable under current circumstances and are nearing the end of their economic life.

Please refer to Appendix A and Section 5 for further information.

OPTIONSCouncil has a number of options to consider regarding the future use of the Saleyards facility. Based on previous reports and the consultation and research findings of this study, options include:

1. Business as usual;

2. Revise cost structure;

3. Reinvestment;

4. Relocation;

5. Reduce scale or adapt focus to niche stock;

6. Divest operations;

7. Facilitate a transition to a regional saleyards;

8. Closure.

Based on a triple-bottom line assessment of all options, it is considered that optimal approach for Council involves a combination of Option 7 (facilitation of a transition to a regional saleyards) and Option 2 (revised cost structure).

RECOMMENDED APPROACH

The recommended approach in regard to the future of the saleyards is to facilitate a transition to a regional saleyards facility. This will require a step by step approach and various actions in order to generate a successful outcome for Council, users and agents.

As detailed in this report, the rationale for the recommended approach can be summarised as follows:

The existing operational cost structure and facility improvements required at Geelong will result in an ongoing loss to Council, in the context of low and declining throughput and significant risks to Council;

Regionalisation of saleyards is occurring at a rapid rate across Victoria and Australia, and is considered inevitable in the western and south-western regions of Victoria;

The Geelong Saleyards are nearing the end of their economic life and would require substantial investment to compete with a regional facility. Such investment in a small yard such as Geelong is unlikely to improve the throughput or financial performance of the facility.

It is considered likely that a regional saleyards will be operational, or at least plans and arrangements finalised, within 5 years. Whilst there is no guarantee that this will occur, the strong interest and public debate from Councils, private operators and stock agents in the south-western region indicates that regionalisation planning is well underway and that a new regional facility is inevitable.


The timeframe during which a regional facility is planned and constructed provides a suitable window for the operations of the Geelong Saleyards to be consolidated and for preparations to be made for the future closure and disposal of the site.

FUTURE USE AND DISPOSAL

The underlying Industrial 1 Zone of the Saleyards positions the Council–owned land as a continuation of the substantial north Geelong industrial corridor. The lack of vacant land, generally high site coverage and high levels of activity in the industrial area indicate that the area is performing successfully and that there is likely to be demand for additional industrial land in the area. In particular, smaller lots appear to be well-utilised, with many service industrial businesses (automotive and domestic equipment manufacturing and sales) and agricultural and landscape equipment sales and supplies located in the vicinity of the Council land and showing signs of strong economic activity.

The indicative value of the developable component of the site with an underlying industrial land use is estimated at approximately $4.5m - $5.4m. A site specific valuation would be required to establish a detailed market value for the land.


1. INTRODUCTION

1.1. OVERVIEWThis report has been prepared by Urban Enterprise and Darrel Brewin and Associates for the City of Greater Geelong (Council).

The report has been prepared in response to the project brief, which called for an independent assessment of the Geelong Saleyards to consider its economic, social, risk and environmental aspects, including stakeholder inputs, in order to recommend the highest and best use for the site.

1.2. METHODThe report has been prepared in accordance with the following method:

1. Review site location, planning and property context;

2. Undertake site visit;

3. Review existing studies and Council data regarding financial performance and throughput;

4. Undertake consultation with key stakeholders (see Appendix A for details);

5. Identify issues and opportunities regarding current and future operations based on findings of consultation, information review and the regional saleyards context;

6. Identify future options for the facility and site, and recommend the highest and best use of the site for Council.


2. BACKGROUND

2.1. CONTEXT

2.1.1. REGIONAL CONTEXTThe Geelong Saleyards are located approximately 4km north-west of the Geelong CBD in the urban area of North Geelong.

The Saleyards are located 71 km from Melbourne (approximately 56 mins by car), 89 km from Ballarat (68 mins) and 77 km from Colac (60 mins) as shown in Figure 2.

The Saleyards are located on Weddell Road, which can be accessed from the Midland Highway and is also in close proximity to the Princes Highway.

F igure 1 GEELONG LGA CONTEXT MAP

Base Image Source: Google Earth

Figure 2 REGIONAL CONTEXT


2.1.2. SITE CONTEXT

The Saleyards comprise 6.055 hectares of Council owned and Crown land, primarly used for the purposes of selling livestock. Sections of the site are also used by Target Australia (Target) for car parking, and by a private business.

The site is bounded by Target (offices) and The Sphinx (hotel and entertainment) to the west, the former Geelong Golf Course to the south, industrial factories to the north, and Weddell Rd, Bella Chara Aged Care Facility and residential land to the east.

The land for the Saleyards was acquired in 1867 and opened in 1869 and has operated as a livestock exchange ever since. The former market offices were constructed in 1869 and replaced in 1913.

The site includes the following components which are shown in Figure 3:

Sheep and cattle yards;

Market Building (Poultry);

Land leased to an agricultural business;

A truck wash;

Maintenance sheds, temporary offices and a portable kiosk;

Toilet block;

Waste water treatment facility;

Former market office building site; and

Three gates/entrances.

Figure 3 SALEYARDS S ITE MAP


2.2. PROPERTYThe Saleyards land comprises two property parcels: 125 Weddell Rd and 135 Weddell Rd, North Geelong.

PARCEL 1: 125 WEDDELL RD

This parcel is owned by Council and comprises the northern section of the site in the Industrial 1 Zone (IN1Z). Two areas of this parcel are currently leased to Target and an agricultural business respectively. Indicative lease areas are shown in Figure 4. Council also leases a section of land on the neighbouring parcel to the west owned by the Sphinx Hotel as shown in Figure 4.

PARCEL 2 : 135 WEDDELL RD

This parcel is in the southern section of the site and is in the Public Park and Recreation Zone (PPRZ). There are no current leases over this parcel of land. This parcel is Crown Land.

Figure 4 PROPERTY PARCELS MAP

Base Image Source: Planning Maps Online, State Government of Victoria.

2.3. HERITAGE IMPROVEMENTSThe Saleyards contains buildings and improvements of heritage significance, due to their longstanding use for stock selling purposes and examples of 19th century saleyards design.

Elements of ‘primary’ heritage significance include portions of the cattle yards and sheep yards as well as some minor structures such as the former Caretaker’s cottage and the former latrines shed. (Conservation Management Plan, 2007). The specific location of each heritage element is shown in Section 3.

The former Market Office building, which was located at the western end of the central thoroughfare between the sheep and cattle pens, was destroyed by fire in June 2013. The Market Office building previously housed


offices for administration and stock agents, food and beverage facilities and amenities. The site of the former Market Office building is currently vacant, with temporary facilities as outlined above presently performing the various functions.

2.4. PLANNING CONTEXTThe subject site is within the City of Greater Geelong and is subject to the provisions of the Greater Geelong Planning Scheme.

2.4.1. ZONESThe majority of the subject site is within the Industrial 1 Zone (IN1Z), with the southern Crown Land parcel within the Public Park and Recreation Zone (PPRZ) as shown in Figure 5.

The Industrial 1 Zone provides for “manufacturing industry, the storage and distribution of goods and associated uses in a manner which does not affect the safety and amenity of local communities.” (Greater Geelong Planning Scheme, Clause 33.01). Land to the north and west of the site is also within the Industrial 1 Zone, with the Saleyards site forming the southern-most section of the wider North Geelong / Norlane industrial corridor.

Figure 5 PLANNING ZONES

Source: Planning Maps Online, State Government of Victoria.

2.4.2. OVERLAYSThe following overlays apply to the subject site as shown in Figure 6:

Heritage Overlay (HO1915) – applies to part of the site, including the Crown Land parcel and the central section of the Council parcel;

Design and Development Overlay (DDO20) – applies to part of the subject site, including all of the Council parcel;

Special Building Overlay (SBO) – applies to a small section of the southern Crown Land parcel, and a larger section at the northern boundary of the subject site.


Figure 6 PLANNING OVERLAYS

Map Source: Planning Maps Online, State Government of Victoria.

2.4.3. HERITAGE CONTROLSUnder the Heritage Overlay (HO1915), a permit is required to:

Subdivide land;

Demolish or remove a building;

Construct a building or carry out works;

Externally alter a building;

Construct or display a sign;

Externally paint an unpainted surface;

Internally alter the market office building; and

Carry out works, repairs and routine maintenance which change the appearance of a heritage place or which are not undertaken to the same details, specifications and materials.

The Schedule to the Heritage Overlay specifies that for the Saleyards (HO1915), “prohibited uses may be permitted”. This provides for a use to be permitted if the use will “demonstrably assist with the conservation of the significance of the heritage place.”

In deciding on a permit application, the Responsible Authority (Council) must consider the following:

The State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and local planning policies;

The significance of the heritage place and whether the proposal will adversely affect the natural or cultural significance of the place;

Any applicable statement of significance, heritage study and any applicable conservation policy;

Whether the location, bulk, form or appearance of a proposed building will adversely affect the significance of the heritage place;


Whether the location, bulk, form and appearance of a proposed building is in keeping with the character and appearance of adjacent buildings and the heritage place;

Whether demolition, removal or external alteration will adversely affect the significance of the heritage place;

Whether proposed works will adversely affect the significance, character or appearance of the heritage place;

Whether a proposed subdivision will adversely affect the significance of the heritage place;

Whether a proposed subdivision may result in development which will adversely affect the significance, character or appearance of the heritage place;

Whether a proposed sign will adversely affect the significance, character or appearance of the heritage place.

2.4.4. DESIGN AND DEVELOPMENT CONTROLS

Under the Design and Development Overlay (DDO) a permit is required to:

Construct a building or construct or carry out works;

Construct a fence;

The schedule to the Design and Development Overlay (DDO20) sets out objectives for design and development for land in Industrial 1, 2 and 3 Zones. The schedule relates to design objectives, including:

Improving visual appearance;

Facilitate economic development;

Provide high levels of amenity for workers and visitors;

Minimise potential negative off site impacts;

Promote storm water quality and reuse measures.

The Schedule also sets out requirements for fencing, site layout and design, infrastructure, car parking and access, landscaping, signage and stormwater quality and re-use.

No permit is required to subdivide land under the Design and Development Overlay and the Schedule to the Design and Development Overlay.

In deciding on a permit application, the Responsible Authority (Council) must consider the following:

The State Planning Policy Framework and the Local Planning Policy Framework;

The design objectives of the relevant schedule to this overlay;

The provisions of any relevant policies and urban design guidelines;

Whether the bulk, location and appearance of any proposed buildings and works will be in keeping with the character and appearance of adjacent buildings, the streetscape or the area;

Whether the design, form, layout, proportion and scale of any proposed buildings and works is compatible with the period, style, form, proportion, and scale of any identified heritage places around the site;

Whether any proposed landscaping or removal of vegetation will be in keeping with the character and appearance of adjacent building, the streetscape or area;


The layout and appearance of area set aside for car parking, access and egress, loading and unloading and the location of any proposed off street car parking;

Whether subdivision will result in development which is not in keeping with the character and appearance of adjacent buildings, the streetscape of the area;

The design and siting of existing development in the area;

The interface with adjoining zones; and

Advertising sign guidelines.

2.4.5. SPECIAL BUILDING OVERLAY

The Special Building Overlay (SBO), which applies to a small section of the southern Crown Land parcel, and a large section at the northern boundary of the subject site relates to land in urban areas liable to “inundation by overland flows from the urban drainage system”.

The overlay is to ensure that development maintains free passage and temporary storage of floodwaters, minimises flood damage, is compatible with the flood hazard and local drainage conditions, will not cause any significant rise in flood level or flow velocity and protects water quality.

A permit is required to construct a building, construct or carry out works and to subdivide land.

The relevant Schedule to the Special Building Overlay (SBO1) specifies that a planning permit is not required for buildings, including dwellings and outbuildings, where no part of the floor level of the building is lower than the finished floor level specified as a restriction on the plan of subdivision.

2.5. KEY FINDINGS AND IMPLICATIONSThe Saleyards are located in North Geelong, within close proximity to the city centre and the inner urban areas of West Geelong and North Geelong. The site also has good access to Melbourne, Ballarat and Colac, which can all be reached in less than 75 minutes by car.

The site is located at the interface of a mixture of land uses, including residential, industrial and commercial uses, as well as former open space / recreational land (golf course). Whilst once strategically located in an outlying area without neighbouring urban uses, the Saleyards are now completely surrounded by urban development.

The site contains a variety of uses, however the key components include yards for the auction of sheep, cattle and poultry as well as a profitable truck wash facility. A large proportion of the site is underutilised space.

The northern portion of the site is zoned Industrial 1 (IN1Z) and the southern portion is zoned for Public Park and Recreation (PPRZ). The Industrial 1 Zone extends to the north and forms part of a wider North Geelong / Norlane industrial corridor.

The site is also subject to a Heritage Overlay (HO) and contains buildings of primary and secondary significance. The site is also under a design and development overlay (DDO20) as well as a small portion of the site subject to the Special Building Overlay (SBO).


IMPLICATIONS

1. The Saleyards site is surrounded by urban development. This has taken place incrementally over a long period of time, and has potential to cause conflict with sensitive uses (such as residential).

2. Existing leases will need to be considered as part of the financial analysis and considerations of the ongoing feasibility of the Saleyards.

3. The majority of the Saleyards site is within the Industrial 1 Zone and is surrounded by urban development, which indicates that the land could be readily used for industrial or similar purposes if not required for Saleyards purposes;

4. A number of heritage elements exist on the site. The Heritage Overlay (HO) over the central portion of the site requires the heritage elements of the site to be considered in any permit application for new buildings or any demolition. Similarly, the Special Building Overlay covers the northern section of the site, which is currently unimproved. The SBO requires any development to allow free flow of floodwaters and may require specific design requirements for any development of this section of the site.


3. PREVIOUS STUDIES

3.1. INTRODUCTIONA number of studies of the Saleyards have been undertaken over the past 20 years. This section provides an overview of the scope and findings of these studies (in chronological order), as well as a discussion of the implications for this study.

3.2. GEELONG SALEYARDS FEASIBILITY (1998)A feasibility assessment of the Geelong Saleyards was undertaken in 1998 by The Communicators in conjunction with Access Contract Services Pty Ltd and R. Marsden Engineering & Management Services.

The purpose of the report was to provide a study of the Geelong Saleyards, which would provide all the relevant and required information to enable Council to make an informed decision on the future of the facility.

KEY POINTS

If the Saleyards close, the impact on Geelong in regard to direct and indirect employment has been calculated as being $1.6 million and $3.6 million. With the inclusion of the multiplier effect, this amount is likely to be between $2.4 million and $7.3 million;

The Saleyards provides a meeting place for the rural community and is an established and integral part of the meat and livestock chain for the greater Geelong region.

Locally, the Saleyards is important to primary producers, stock agents, suppliers of services such as retail outlets for food, clothing, whitegoods etc., livestock, transport operators, a diversity of maintenance suppliers, and various utilities, who gain income from the operation of the Saleyards.

Considerable capital is required to upgrade and maintain the facilities so as to conform to the industry Victorian Saleyards Code of Practice. $2m to $2.5 m is considered a conservative estimate.

The saleyard operation has been returning a consistent yet modest operating surplus, excluding capital expenditure and maintenance of $300,000 between 1995 and 1997. The inclusion of capital expenditure results in a net loss.

The ability of the current facility to expand its operations to increase turnover and better service a loan is very limited due to physical space limitations and the current type of facilities to accommodate the further changing product mix and quality assurance standards required now and in the future.

The structure of Australian livestock market is changing. There are increasing sales through export to new markets in areas such as South East Asia, Malaysia, Europe and North America.

The Saleyards should investigate and plan to become an integral part of a developing structure with higher turnover, more versatile, quality accredited and logistically located facilities.

The Victorian Government has indicated through the Municipal Saleyards Association (MSA) that there are too many saleyards operating and they are located too close together. According to the MSA, Council owned and privately operated saleyards have been very successful.

Any future facility in the Geelong area will need to have the infrastructure and appropriate facilities for export in addition to the increased requirements of the domestic consumption if it is to participate in the longer-term business and reap the rewards for the Geelong and Environs community.

The livestock offered at the Geelong Saleyards are sourced from an area bounded by the western edge of Melbourne to Bellarine Peninsula, Apollo Bay on the coast and then to Winchelsea, Cressy, Meredith and Bacchus Marsh. The main source of stock, both sheep and cattle comes from an area closer to Geelong but including Winchelsea, Inverleigh, Mount Moriac, Bellarine and Bacchus Marsh.

Potential for the catchment area to expand is directly related to the relocation of the facility to a more logistics friendly site. Geelong Saleyards in their current location cannot continue to compete and become financially successful long term.

The Code of Practice for Saleyards in Victoria is a voluntary code (mandatory from a practical and quality point of view) and became operative from the 1st Jan 1995.

Opportunities suggest establishment in the northern sector between Geelong and Werribee within direct and ready access to primary transport services to maximise the realisation of a value added saleyards development over a 50 year life span.

The existing Saleyards site would have a high appeal for development including residential, unit development and outright sale to adjacent owners.

3.3. SALEYARD OPERATIONS AUDIT (2002)A review of the Saleyards operations was conducted in September 2002 by the City of Greater Geelong. The audit involved:

A review of Council’s saleyard operations including the adequacy of controls in bringing to account revenue from operations; and

A review and assessment of operations from a risk management and core business perspective.

The key findings to arise from the audit include:

Previous reports concerning the saleyards make reference to private sector investment, Council contribution to relocation in the form of proceeds from the sale of the old site and making available an interest free loan secured against the proposed company’s land and buildings.

Council is subsidising the operation and the facility does not conform to the Victorian Saleyard Code of Practice.

The audit conveyed that Council should review its operations in light of the following:

Do the Saleyards form part of core Council business?

The need to obtain Ministerial and Treasurer Approval for Council to participate in the formation and operation of the Saleyard.

Private sector investment remains uncertain.

Current trends in the industry suggest a movement away from the auction system together with apparent modest returns on investment.


Whether other options such as collaborative arrangements with other Saleyards may prove to be more viable options.

A significant component of the Saleyards operating cost was overtime required on weekends.

Certain Saleyard activities were operating without a Council permit, for example dining room facilities and mini-market sales.

Weekly auction controls were considered deficient and needed to be tightened.

Ageing infrastructure and a lack of signage prompted a recommendation for a risk management review to be performed by Council’s Administrative Services Department.

3.4. CONSERVATION MANAGEMENT PLAN (2007)The Geelong Saleyards Conservation Management Plan (CMP) was prepared in 2007 by David Rowe and Wendy Jacobs on behalf of Council. The CMP provides background information and recommendations in relation to the following topics:

1. Historical background;

2. Physical evidence and improvements;

3. Cultural and heritage significance of the Saleyards;

4. Recommendations regarding conservation policies (relating to buildings and fabric, landscaping, use, statutory constraints, environmental risk, future development, management and funding opportunities); and

5. Recommended works and maintenance.

The CMP is a detailed document and provides useful contextual and background information to inform this study. Consultation with co-author Dr David Rowe was also undertaken regarding the CMP and the general heritage value of the Saleyards – please see Section 5 for a summary of this consultation.

The key findings of each section of the CMP is outlined as follows.

HISTORICAL BACKGROUND

Land was reserved for the Saleyards by the Geelong Town Council in 1867, with neighbouring freehold land purchased by the Council in 1870;

The Saleyards were opened in 1869, and the sale of livestock has continued in this location to this day. The original Market Office building was constructed in 1869, and replaced in 1913. The latrine shed appears to have also been constructed around 1913;

The design of the Saleyards was based on existing saleyards in Newmarket (Kensington) and Ballarat. The cattle and sheep yards have since been expanded, however “the original layout and general character of the yards has been retained.” (p.v)

PHYSICAL EV IDENCE

The Saleyards are located on Weddell Road on land comprising 6.055 hectares of freehold land along with the smaller section of reserved land to the south;

The sheep and cattle pens “traverse the bulk of the southern portion of the site” and “feature early timber post and rail fences and gates, with bluestone pen paving.” (p. v) Steel posts, gates and concrete floors have been added;

The Edwardian Market Offices building is a “central feature on the site”. Other buildings include the Edwardian latrines shed, 20th century sheds, a small Victorian gabled former gate keeper’s cottage and a shallow gabled pig market building.

CULTURAL HERITAGE SIGNIF ICANCE

The Saleyards are “historically, scientifically and socially significant to the State of Victoria” and “the interiors of the Market Office building…are architecturally significant at a Local level” (p. vi)

The Saleyards “has significance as the most intact functioning 19th century municipal stock yards known in Victoria” and reflects “the importance of the agricultural industry to the Geelong economy in the 19th century.” (p.vi)

“The once ubiquitous rectangular layout of the cattle and sheep yards – separated by a central thoroughfare – together with the timber construction of the pen fencing and gates, bluestone pen paving and the narrow covered elevated cattle yard walkways, are a physical legacy of the of 19th century vernacular sale yard design and function now rare in Victoria.” (p. vi)

The Saleyards are historically significant for the long standing associations with the City of Greater Geelong;

The Saleyards are socially significant at a State level “as a centre for business and social interaction between farmers, stock agents and others” and have been the location for “informal counselling, education, business and…friendship”. The social value is considered to be “still significant to this day”. (p.vii)

Table 1 shows the significance of the various Saleyards components as identified in the CMP. The location of each component is shown in Figure 7.

TABLE 1 SIGNIFICANCE OF COMPONENTS

Primary Significance Secondary Significance No Significance

(P1) Cattle yards (especially the rectangular layout, timber post and rail pen

fences and gates, bluestone paving, and elevate narrow covered walkways)

(S1) Open shed in sheep yards Covered pig market building and associated offices

(P2) Sheep Yards (especially the rectangular layout, timber post and rail pen fences and bluestone paving, and the mature stand of Ash

trees near the western boundary)

(S2) Interwar toilet block Northern portion of cattle yards

(P3) Central thoroughfare dividing the cattle and sheep yards and providing uninterrupted views of the Market Office Building

(S3) Altered and 20th century cattle and sheep ramps

Very small portion of sheep pens in the north west corner of sheep

yards.

(P4) Bluestone spoon drains (especially the bluestone drain that traverses the sheep

yards in the southern portion of the site)

(S4) Possible archaeological fabric forming brick, stone and/or concrete lined dams, bye-washes and sheep washes in the vicinity of Fishermans

Gully and at the eastern portion of the sheep yards

Southern sheep yards area

(P5) Timber cattle ramp at the eastern boundary of the cattle yards

Open grassed northern area of the sale yards site

(P6) Market Office Building Shed adjacent to the former latrines shed

(P7) Former Latrines Shed

(P8) Former Caretaker’s Cottage


Source: Geelong Saleyards Conservation Management Plan, 2007, p.vii

Figure 7 LOCATION OF SALEYARDS COMPONENTS

Source: Geelong Saleyards Conservation Management Plan, 2007, based on Drawing 1.04 and annotated by Urban Enterprise.

CONSERVATION POLICY

The conservation policy outlined in the CMP is summarised as follows:

The exterior fabric of the buildings and structures identified as having primary heritage significance is retained;

Consideration is given to the retention of buildings and structures of secondary heritage significance; and

Buildings and structures of no significance are not considered to have sufficient heritage value to warrant heritage status;

Stands of mature Ash trees in the sheep yards in the south west corner of the site are retained;

The Saleyards continue to be used as a site for the sale of livestock and retained in Council ownership;

Consideration is given to inclusion of the site (between the pig market building and Fishermans Gully) on the Victorian Heritage Register and within a Heritage Overlay;

Strategic directions for the site need to balance the need to meet regulatory requirements with heritage values;

The need for the saleyards to continue to function for its original purpose to retain heritage value is essential;

Sheep yards, southern portion of the cattle yards, Market Office building, former latrines shed and former caretaker’s cottage be retained as part of any new development;

Consideration is given to diversifying the possible function of the saleyards through related uses on non-sale days, such as farmers or produce markets, sale of rural products, rural industry training and agricultural education for kindergarten and school children;

Subdivision of the northern section of the site be discouraged if this may have a longer term negative impact on saleyards operations due to interface issues;

Appropriate interpretation be provided regarding the history, layout and function of the Saleyards;

Management of the site should include conservation, restoration, maintenance, security and responsible use of the ‘significant fabric’; and

Pursue the range of identified funding opportunities for the required restoration works.

RECOMMENDED WORKS AND MAINTENNANCE

The CMP includes a Priority Schedule of Works, which identified short term essential exterior maintenance items for the cattle yards, sheep yards, market office building and former caretaker’s office.

A number of these works have been undertaken by Council as detailed in Section 4.4.

3.5. SALEYARD OPERATIONS AUDIT (2012)A review of the Saleyards operations was undertaken in October 2012 by Council. The objective of the audit was to review the Saleyards, in particular the management and administrative controls in place for providing an efficient and effective operation, as well as providing a review from a risk management perspective.

The review involved a number of site visits, auction attendance and several meetings with key staff and stakeholders. The following findings and recommendations emerged from the audit:

A number of administrative weaknesses exist, particularly in relation to the selling of poultry.

A review is to be conducted into the poultry activity to assess the cultural and social benefits against the risks and complaints received.

The conductor of poultry sales does not appear to have formal agreement with Council.

An audit of accuracy of agent sales data is to be undertaken.

A complete risk assessment is to be conducted, in particular to address the following operational risk matters:

Undertake a risk management and occupational health and safety review of the site;

Review walkways and designated traffic areas to ensure they are clearly highlighted;

Review and update signage, noticeboards etc., where appropriate;

Review hazard areas, undertake an internal traffic management plan;


Review the procedures for cleaning and hosing / watering down of cattle pens after auctions;

Review compliance with the permit issued under the Trade Waste Agreement with Barwon Water.

There were also a number of improvements which were recommended, including:

OPERATIONS

Consider leasing the operational management aspects of the saleyards.

Introduce the sale of farming equipment, waste products, retail on auction days.

The site is underutilised, particularly on non-auction days.

Ensure that formal agreements are made with livestock agents, contractors and trade individuals who sell or conduct business at the saleyards.

STRATEGIC

There is an opportunity for further development of vacant land on the site.

Cultural and heritage significance at the saleyards to be capitalised on – educational, livestock training centre, retail and tourist attraction (Sovereign Hill approach and development).

Increase stormwater areas at the Saleyards to provide for the efficient and environmentally sustainable catchment of water for re use purposes.

Staged refurbishment of existing site – yards and roofing to improve operational amenity and provide for all weather / season conditions.

3.6. SALEYARDS UPDATE REPORT (MAY 2013)This report was prepared by the Council Engineering Department in May 2013 and provided an update to the Audit Advisory Committee, addressing the Worksafe intervention program, conservation management plan, environmental risk analysis, risk management site inspection and any other relevant information impacting the operation of the Geelong Saleyards.

The report provided an update on the following programs, plans and requirements:

WORKSAFE INTERVENTION PROGRAM

Walkways on ramps are now compliant.

Required ramps to be decommissioned have been closed.

Operational Health and Safety is out of date, but programmes are to be put in place for traffic management, noise/plant, UV/heat, manual handling and training/induction. These plans are to be in place by December 2013.

CONSERVATION MANAGEMENT PLAN

Council is in the final stages of implementing the three year plan. Works have been completed on the market office building, sheep yards, car park and water services.

Concreting on the pen floors in the cattle areas is susceptible to budget constraints.

The caretakers’ cottage is being taken offsite for restoration works.

The requirements to rectify the bluestone retaining wall at the sheep loading ramps will require more significant works than first thought. Independent assessment in being sought.

ENVIRONMENTAL RISK ANALYSIS

The completion of the Conservation Management Plan has addressed the threats identified in the Environmental Risk Analysis.

Fire is considered a low risk issue; however an emergency action plan is being developed.

RISK MANAGEMENT S ITE INSPECTION

Sheep ramps that required drum reel guards have been installed along with safety barriers. An automated height locking system has also been installed.

STATUTORY REQUIREMENTS

There are major challenges ahead in the form of the proposed Australian Animal Welfare Standards and Guidelines - Sheep and Cattle and Welfare of Livestock at Saleyards.

ALTERNATIVE USES

Alternative site use continues to be investigated and promoted. Field and Game Australia use the site monthly for their committee meeting.

Discussions have occurred with Central Geelong Marketing and produce vendors around a community driven fruit and vegetable market, which continues to be investigated.

3.7. SALEYARDS UPDATE REPORT (NOV 2013)This report, prepared by the Engineering Department, provides an update on actions mainly centred on the impact of fire and the poultry sales. The report noted that:

The fire damaged office building was demolished and underground power has been re-established to the site.

Improved temporary accommodation/office space for staff operating at the site is being sought.

No portable kitchen building has been sourced and a food caravan provides refreshment services.

Poultry sales are to continue until a broader review of the whole saleyards function is completed.

An EOI process has been conducted to determine the interest by providers in the market to conduct poultry sales at the Saleyards. A formal document has been created that can be used as the basis for a licence agreement for the poultry sale provider.

A review of the Geelong Saleyards future use and on-going sustainability is to be conducted.

Of particular note is the increased push within the industry for abattoir processing of livestock, resulting in a steady decline in throughput numbers at saleyard sites.

The saleyards poses environmental issues to neighbouring residents and the disbursement of effluent into drains.

The Saleyards is running at a loss. Council has developed a policy that addresses the provision of a subsidy being provided.


3.8. KEY FINDINGS AND IMPLICATIONSA number of reports and audits have been conducted into the operations of the Geelong Saleyards. Common themes identified in these studies include:

The Saleyards have heritage, social and political significance, due to the continued operation of the Saleyards at the site since 1869, the strong links to the Geelong local Council, the original heritage elements and design of the site, and the use of the site as a meeting place for farmers and community members;

Council has been subsidising the operation of the facility for many years, with a consistent financial loss being reported since the mid 2000s. Council has been concerned with the ongoing viability of the Saleyards for some time;

The current site is not ideally located from a logistics perspective – a larger, custom built site with better access would be required for the facility to increase volume and efficiency;

Significant health and safety risks have been identified and significant investment is required to improve current facilities;

A rolling program of improvements has been undertaken, however a fire destroyed the main office buildings at the Saleyards.

Previous studies have identified the ongoing challenges in managing the Saleyards and undertaking the necessary improvements to ensure that the facility is safe and efficient. The heritage significance is closely linked to the ongoing operation of the site, however the ongoing financial loss presents Council with the need to reconsider the viability of the site in the context of a declining Saleyards market.

4. SALEYARDS ANALYSIS

4.1. INTRODUCTIONThis section provides an analysis of data relating to current and historical throughput and fees, and an analysis of the historical and budgeted financial performance of the facility.

Data has been compiled from a range of sources, including the City of Greater Geelong, the Livestock Saleyards Association of Victoria (LSAV), and Scanclear (operators of the weighing service at the Saleyards).

4.2. THROUGHPUT

4.2.1. ANNUAL THROUGHPUTLivestock sales are the core use of the Saleyards. Livestock auctions occur fortnightly on Mondays from 9:00am to 1:00pm, including sheep and cattle.

Throughput data is shown in Table 2. In 2013, the Saleyards had a throughput of 8,160 head of cattle, and 55,302 sheep and lambs. Cattle and sheep throughput at the Geelong Saleyards has progressively declined over the past 10 years, at an average annual rate of -11.3% (cattle) and -10.48% (sheep & lambs).

TABLE 2 LIVESTOCK THROUGHPUT, GEELONG SALEYARDS, 2003 – 2013

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Geelong (% Change) Victoria (% Change)

03-13 10-13 03-13 10-13

Cattle 27,080 20,930 18,675 17,266 18,616 8,987 8,303 6,841 5,151 5,201 8,160 -10.33% 4.51% -7.45% -11.37%

Sheep & Lamb 86,101 72,855 65,383 55,302 -10.48% -7.36%

Source: Livestock Saleyards Association of Victoria, 2014.

4.2.2. CATTLEWhen compared with other saleyards in western Victoria, and the overall Victorian trend, it is clear that the decline in throughput is not unique to Geelong. Table 3 and Figure 8 show the 10 year throughput trends in western Victoria. Each saleyard in Western Victoria experienced a decline in throughput over the analysis period, and the average throughput decline across all saleyards in Victoria was -7.45% per annum.

Total cattle throughput in Victoria (in the saleyards for which LSAV data was made available) declined by more than 700,000 head per annum over the period 2003 – 2013, showing that the significant decline in throughput is an industry wide trend.


TABLE 3 CATTLE THROUGHPUT COMPARISON, VICTORIA, 2003 – 2013

Saleyard 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Annual Compoun

d Growth

Rate

Geelong 27,080 20,930 18,675 17,266 18,616 8,987 8,303 6,841 5,151 5,201 8,160 -10.33%

Ballarat1 62,416 61,860 54,644 61,087 74,810 61,087 56,915 n/a n/a n/a n/a -1.31%

Camperdown 63,703 67,237 58,805 53,250 57,942 44,394 50,294 46,869 46,551 46,786 36,868 -4.85%

Colac 48,675 55,114 50,773 48,557 59,617 44,284 51,599 46,156 47,783 42,462 36,347 -2.62%

Hamilton2 49,520 62,742 60,864 51,729 47,836 46,776 47,776 42,897 45,590 41,273 n/a -1.81%

Horsham 3,802 3,549 3,652 2,578 3,150 2,044 2,264 2,272 2,533 2,622 2,113 -5.20%

Victoria 1,222,915 1,089,433

1,032,290 803,907 915,454 816,280 785,977 846,171 557,326 582,437 522,034 -7.45%

n.a. = data not available. 1. Data available for 2003-2009 only.2. Data available for 2003-2012 only.

Figure 8 CATTLE THROUGHPUT PER ANNUM, WESTERN VICTORIA SALEYARDS, 2003-2013


Figure 9 AVERAGE ANNUAL CATTLE THROUGHPUT CHANGE, 2003 – 2013


4.2.3. SHEEP & LAMBTable 4 summarises sheep and lamb throughput for the period 2010-2013. Sheep and lamb throughput at Geelong Saleyards has decreased over this period by an average of -10.48% per annum. This decline is greater than the Victorian average of -7.36% over the same period, and is significantly greater than the other western Victorian saleyards with significant levels of sheep throughput (Hamilton and Horsham).

TABLE 4 SHEEP THROUGHPUT, 2010 – 2013

2010 2011 2012 2013

Annual Compound

Growth Rate

Lambs Sheep Total Lambs Sheep Total Lambs Sheep Total Lambs Sheep Total

Geelong n/a 86,101 86,101 72,855 65,383 55,302 -10.48%

Hamilton 769,698 276,218 1,045,916 724,019 227,183 951,202 980,419 -2.13%

Horsham 433,653 176,265 609,918 427,088 144,460 571,548 376,204 139,802 516,006 502,379 -4.73%

Total Victoria 2,453,205 1,199,653 3,662,38

3 2,508,031 721,524 3,516,497 1,589,242 829,056 3,718,74

6 1,319,110 431,827 2,697,217 -7.36%

Source: Livestock Saleyards Association of Victoria, 2014. Note: Data unavailable for Ballarat and Camperdown, Hamilton Data available for 2010-2012 only. n.a. = data not available

Figure 10 AVERAGE ANNUAL SHEEP THROUGHPUT CHANGE, 2010 – 2013

Source: Livestock Saleyards Association of Victoria


4.2.4. SCANCLEAR DATAData provided by Scanclear, operators of the weighing and scanning facilities at Geelong Saleyards, confirms the overall decline in sheep throughput in recent years, and the slight increase in cattle throughput per sale over the past 3 years, as shown in Table 5. However, cattle throughput per annum remains at historically low levels.

It should be noted that this data relates to financial years, whereas data presented in previous sections sourced from the Livestock Saleyards Association of Victoria relates to calendar years.

TABLE 5 SCANCLEAR LIVESTOCK SALES DATA, 2011/12 – 2013/14

2011-12 2012-13 2013-141 Total

Head sold per annum

Cattle 5,474 8,070 6,945 20,489

Sheep 63,508 55,046 49,241 167,795

Total 68,982 63,116 56,186 188,284

Average Head sold per sale (fortnight)

Cattle 211 323 347 285

Sheep 2,592 2,393 2,345 2330

Total 1,353 1,315 1,370 2615

Source: Scanclear, 2014. 1. Data for 2013-14 includes all sale up to May 2014 (20 sales).

4.3. FEESThis section provides an analysis of the vendor yard fees and agents fees charged in saleyards across Victoria in July 2013, sourced from the LSAV.

At the Geelong Saleyards, vendors charge $8.75 in yard fees per head of cattle, plus a $2.50 weighing fee. $0.75 is charged per head of sheep.

TABLE 6 GEELONG SALEYARDS FEES – CATTLE AND SHEEP

Saleyard Cattle ($) Weighing Fee ($) Sheep ($)

Geelong $ 8.75 $ 2.50 $ 0.75

Source: Livestock Saleyards Association of Victoria.

Table 7 compares cattle fees across saleyards throughout Victoria. Shepparton charge the highest yard fees with a total of $23.10 per head of cattle, with Casterton the lowest at $7.20 per head.

Geelong charges a total of $11.25 per head of cattle, slightly below the Victorian average of $12.82.

TABLE 7 CATTLE FEES

Saleyard Cattle ($) Weighing Fee ($) Total ($)

Shepparton $ 12.52 $ 10.58 $ 23.10

Sale $ 9.46 $ 13.42 $ 22.88

Colac $ 12.65 $ 4.40 $ 17.05

Camperdown $ 8.87 $ 4.57 $ 13.44

Bairnsdale $ 6.95 $ 6.20 $ 13.15

Wangaratta $ 6.75 $ 6.25 $ 13.00

Victorian Average $ 12.82

Warrnambool $ 10.70 $ 1.25 $ 11.95

Geelong $ 8.75 $ 2.50 $ 11.25

Echuca $ 10.00 - $ 10.00

Horsham $ 10.00 Included $ 10.00

Kyneton $ 9.75 - $ 9.75

Kerang $ 9.00 Included $ 9.00

Bendigo $ 7.65 - $ 7.65

Casterton $ 7.20 - $ 7.20


Table 8 compares sheep fees across saleyards throughout Victoria. The Sale saleyards charge the highest amount of vendor yard fees for sheep at $1.43 per head. Geelong charge $0.75, which slightly below the state average of $0.88 per head.

TABLE 8 SHEEP FEES

Saleyard Sheep ($)

Sale $ 1.43

Bairnsdale $ 1.35

Colac $ 1.10

Kyneton $ 0.90

Victorian Average $ 0.88

Shepparton $ 0.80

Geelong $ 0.75

Horsham $ 0.65

Casterton $ 0.63

Bendigo $ 0.60

Warrnambool $ 0.55


Table 9 provides a summary of agent fees which are paid per sale at different saleyards throughout Victoria. For the purpose of this comparison, agent fees are calculated on a per sale basis.


Kerang charge the highest amount of agent fees with $1,130 per sale. Geelong charge approximately $256 for agent fees per sale.

TABLE 9 AGENT CHARGES – PER SALE

Centre Regular Sale ($)

Kerang $ 1,130

Nhill $ 920

Casterton $ 330

Bairnsdale $ 300

Bendigo $ 279

Geelong* $ 256

Echuca $ 197

Colac $ 182

Wangaratta $ 162

Shepparton $ 120

Corryong $ 110

Camperdown $ 39

Source: Livestock Saleyards Association of Victoria.* $6,405 pa, adjusted by dividing by 25 weeks for fortnightly sales amount

It is understood that Council recently conducted an assessment of Saleyards fees in order to calculate the level of fees necessary to cover all operational costs. The assessment found that a fee increase of 108% would be required in order for the Saleyards to ‘break even’.

4.4. OTHER SALES AND USES

4.4.1. POULTRY SALESPoultry sales currently operate every Monday (with the exception of public holidays) and are permitted between the hours of 7:30am and 3:30pm. Sales are typically conducted between 10am and 1pm. Poultry sales are conducted in the covered pig market building. A site visit in April 2014 indicated the poultry sales are currently relatively modest in scale.

It is understood that the Geelong Saleyards is one of only two regular public poultry sales currently operating in Victoria (the other is in Whittlesea). Occasional poultry sales also occur in Bendigo. Poultry sales are a relatively recent addition to the saleyards, having commenced in 2012.

4.4.2. OTHER USESDespite a number of proposals and concepts for complimentary uses of the saleyards property (such as markets), for the vast majority of the week the site is solely used as a Saleyards facility. A truck wash also operates at the Saleyards, with public access.

Small sections of the saleyards property are leased to other parties for car parking and private purposes are outlined in the following section.

4.5. FINANCIAL PERFORMANCE

4.5.1. OVERVIEWInformation regarding the saleyards financial history and budgeted financial position was made available by Council to inform this study.

An overview of the financial performance of the Saleyards over the period 2005/06 – 2012/13 (the analysis period) is shown in Table 10 and Figure 12. These figures exclude capital works. The accounts show that:

The saleyards have recorded a loss in each of the past 8 financial years of between $49,266 and $193,876;

The extent of the losses per year is generally increasing over time;

The net balance over the analysis period was a combined loss of $1.08m (real values);

Income declined rapidly from a peak of $284,620 in 2007/08, to a low of $116,161 in 2010/11. This corresponds with a decrease in stock throughput over this time linked to the end of drought conditions;

Income began to increase somewhat in 2011/12 and 2012/13, although a corresponding increase in expenses in this period resulted in a consistent net loss over the analysis period.

Expenditure has remained relatively consistent over the analysis period, between $264,007 and $350,402 per annum.

TABLE 10 FINANCIAL PEFORMANCE HISTORY, 2005/06 – 2012/13

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 Total

Total Income $254,555 $284,620 $155,441 $148,225 $147,678 $116,161 $125,210 $166,457 $1,398,347

Total Expenditure -$321,281 -$333,886 -$296,893 -$264,007 -$309,685 -$280,939 -$319,086 -$350,402 -$2,476,179

Net Balance -$66,726 -$49,266 -$141,452 -$115,782 -$162,007 -$164,778 -$193,876 -$183,945 -$1,077,832

Source: City of Greater Geelong, 2014.


Figure 11 F INANCIAL PEFORMANCE HISTORY, 2005/06 – 2012/13


4.5.2. ANALYSIS OF INCOME AND EXPENDITURE BY CATEGORYAn analysis of income and expenditure by category is shown in Table 11. This shows that staff costs are clearly the highest expenditure item, followed by contractors and utilities. The vast majority of income is classified as “Activities and Program Fees / General Income”.

TABLE 11 INCOME AND EXPENDITURE BY CATEGORY

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13

Income

Activities and Program Fees / General Income 253,175 283,240 154,061 146,645 146,098 114,665 115,908 156,567

Facilities - Casual Hire - Taxable GST 1,380 1,380 1,380 1,580 1,580 1,496 1,755 2,066

Lease Income 7,548 7,824

Total Income 254,555 284,620 155,441 148,225 147,678 116,161 125,210 166,457

Expenditure

Allowances -15,919 -15,589 -16,489 -17,349 -18,298 -18,790 -19,349 -20,356

Contractors -70,010 -58,584 -32,741 -11,699 -33,254 -47,412 -45,159 - 45,478

Dedicated Vehicle Costs -13,878 -14,572 -15,869 -20,856 -21,304 -21,515 -21,324 -31,508

Depreciation -38,662 -40,325 -41,266 -25,209 -27,551 -28,728 -29,147 -27,887

Leases -21,273 -15,600

Staff Costs -115,635 -133,397 -117,260 -31,284* -130,474 -27,377* -138,533 -142,631

Training and Development -364 -1,123 -1,289 -277 -11,300 -794

Utilities -37,368 -38,685 -33,634 -33,956 -41,501 -5,909 -55,700 -56,168

Other Expense Items -29,447 -31,611 -38,345 -123,377* -16,030 -119,907* -9,875 -9,980

Total Expenditure -321,281 -333,886 -296,893 -264,007 -309,685 -280,939 -319,086 -350,402

Net Balance -66,726 -49,266 -141,452 -115,782 -162,007 -164,778 -193,876 -183,945

Source: City of Greater Geelong, 2014.*Note: A proportion of Staff costs appear to have been included in “Other Expense Items” in 2008/09 and 2010/11.

An analysis of income trends by category is shown in Figure 12. Income in the “Activities and Program Fees/ General Income” category is clearly the most significant component of income, and the overall trend has been a significant decline in income in this category.

Figure 12 INCOME TRENDS BY CATEGORY, 2005/6 – 2012/13



Figure 13 shows the relationship between income in the “Activities and Program Fees/General Income” category, total expenditure and cattle throughput. Income and expenditure is shown on the left-hand axis, and throughput is shown on the right-hand axis.

Over the period 2006 – 2013, the trend in cattle throughput has closely matched the trend in income, indicating that saleyards income is closely linked to overall throughput. The majority of income is generated through agents’ fees and yard dues, which are generally linked to throughput.

Figure 13 also shows that expenditure trends are largely independent of cattle throughput, indicating that the cost structure of the Saleyards has not been adjusted over time despite falling throughput, and potentially that it may not be feasible to significantly reduce expenditure due to the need to maintain a certain level of facility, equipment and staff costs irrespective of throughput.

Figure 13 INCOME, EXPENDITURE AND CATTLE THROUGHPUT

Source: Livestock Saleyards Association of Victoria, City of Greater Geelong, compiled by Urban Enterprise.

Analysis of expenditure by category is shown in Figures 14 and 15. Staff costs have been combined with other expenses for these analyses in order to remove the apparent classification of some staff costs in the ‘other expenses’ category in some years.

Figure 14 shows that the most significant expenses borne by the Saleyards over the past 8 years have been Staff Costs and other expenses (34%), followed by Contractors (14%) and Utilities (12%).

Figure 14 EXPENDITURE BY CATEGORY, 2005/6 – 2012/13


Figure 15 shows the change in expenditure by category over time. The highest increases were in vehicle costs and utilities. Training and development costs have also increased, however these costs are insignificant in terms of proportion of overall expenditure.

Figure 15 CHANGE IN EXPENDITURE BY CATEGORY, 2005/6 – 2012/13


4.5.3. BUDGETFinancial information made available by Council shows that the budget for the Saleyards in coming years includes:

An operating loss of $179,801 in 2013/14; and

An operating loss of $172,148 in 2014/15.


The budget shows that the financial performance of the Saleyards operations is not expected to change in the short term and the trend of significant annual losses is expected to continue.

It is understood that Council’s funding of operations of the Saleyards is committed until June 30, 2015.

4.5.4. CURRENT LEASESCouncil is currently party to four (4) property leases/licenses relating to the Saleyards.

On balance, the leases and licences (excluding fees and charges relating to the cattle and sheep sales) are estimated to generate a net income of $5,580 per annum.

4.5.5. CAPITAL WORKS

In addition to the operating finances outlined in the previous sections, Council has undertaken a capital works program over the period 2007 – 2013. The program is summarised in Table 12, showing a total capital expenditure of $730,183.

The majority of works undertaken related to improvements identified by the Conservation Management Plan ($546,013), such as the refurbishment of the former Market Offices and cattle and sheep pen works.

It is understood that further capital works are planned, but will not be undertaken until the outcome of this study is known.

TABLE 12 CAPITAL WORKS PROGRAM

Project Description Expenditure Year

Geelong Saleyards Upgrade Program

Car park pavement and asphalt works, steel walkways, sheep ramps and security lighting

$130,890 2007/08

Ramp Upgrade Project Meet requests from workcover - primary cattle loading and unloading ramps

$53,280 2008/09

CHMP Stage 1 Main office building refurbishment $422,871 2009/10 & 10/11

CHMP Stage 2 Cattle pen works including walkway roofing $56,147 2010/11

CHMP Stage 3 Sheep pen works $56,418 2011/12

CHMP Stage 3 Former Caretaker's Cottage and Storage Shed $10,577 2011/12 & 12/13

Total $730,183

Source: City of Greater Geelong.

4.6. KEY FINDINGS AND IMPLICATIONSKey findings from this section are as follows:

The Geelong Saleyards are primarily used as a stock selling facility, with minor ancillary uses such as a truck wash and areas leased for private purposes;

Cattle throughput was 8,160 head in 2013. Throughput has declined over the past 10 years, at an average annual rate of -10.33%;

Sheep throughput was 55,302 head in 2013. Throughput has declined over the past 4 years at an average rate of -10.48% per annum;

The decline in throughput is not unique to Geelong, with the Victorian average showing a cattle throughput decrease of -11.37% per annum over the past 10 years and a decrease in

sheep throughput of -7.36% per annum over the past 4 years. However, the Geelong throughput decline is even greater than the Victorian average for both cattle and sheep;

Poultry sales are also conducted at the Saleyards, however these are relatively modest in scale;

The saleyards are performing poorly financially. The saleyards accounts have recorded a loss in each of the past eight financial years of between $49,266 and $193,876. The net balance over the analysis period was a combined loss of $1.08m (real values);

The long term income trend has been declining, generally in line with a reduction in throughput. Expenditure has remained relatively consistent over time;

Vendor and agents fees are similar to the Victorian average. There may be the opportunity to increase fees within the range set by other saleyards, however an analysis undertaken by Council shows that fees would need to be doubled in order for the saleyards to ‘break even’;

Since 2007/08 Council has invested $1.7 million to subsidise the operation of the Saleyards including capital improvements.

The poor financial performance and declining throughput demonstrates that the current Saleyards operations have been unprofitable for many years. The scale of throughput is significantly lower than competing saleyards in Ballarat and Colac, and other western region saleyards such as Hamilton and Camperdown.

In addition to the significant operating losses, significant capital investment has been made over the past 7 years to improve the facilities and buildings at the site. Despite this investment, the facility still requires significant investment to complete the recommendations of the CMP, and to improve the overall standard and safety of facilities for employees and users.

Despite significant investment in the Saleyards, operational losses have continued to occur. Overall Victorian trends suggest that it is unlikely that the Saleyards would be able to increase throughput or improve financial performance. The Saleyards industry is declining overall, as alternative selling methods replace part of the traditional auction market. This issue is discussed further in the following sections.


5. CONSULTATION

5.1. INTRODUCTIONConsultation was undertaken with users, staff, management, stakeholders and authorities regarding the Saleyards. A list of participants and detailed consultation outcomes are provided in Appendix A.

This section provides a summary of issues raised during consultation, with a particular focus on the issues and opportunities relevant to this study.

5.2. COUNCILLORSAll City of Greater Geelong Councillors were invited to attend a workshop with the project team. Input from this session is summarised as follows:

The Saleyards play an important social role within the rural community of the City of Greater Geelong. This should be considered when assessing the financial sustainability of the facility. ‘Breaking even’ would be considered a good result, given the additional social benefits generated by operating the site;

There was a high level of community interest in retaining the Saleyards in 2003 when closure was an option. Interest largely related to maintaining the important social interaction and community hub;

Despite the ‘urban’ location of the Saleyards, it is centrally located to the various sellers and buyers, which are located to the south, east and north of the city centre;

Alternative locations could include the Herd abattoir in Bacchus March Road, which has been recently been land-locked by the Geelong Ring Road;

Traveling to alternative saleyards would be problematic for buyers and sellers – the nearest saleyard would be in Ballarat which could add an hour to each way of the journey. Distances and travel time to Colac would also be prohibitive if the Geelong Saleyards were to be closed;

Improvements are needed to the existing infrastructure at the Saleyards;

Costs of scanning and weighing are burdensome for Council and the overall profitability of the site;

Opportunities could exist to consolidate the existing site and facilities, in order to fund reinvestment and to improve efficiency of use.

5.3. COUNCIL OFFICERSIndividual and group sessions were held with Council officers involved in the operation and management of the Saleyards. The following is a summary of issues and opportunities raised during these discussions.

FINANCIAL PERFORMANCE AND MANAGEMENT

The Saleyards has been making a loss for many years. There is a need to consider the highest and best use of the land;

Geelong Saleyards were cost-neutral for Council in the mid 2000s, but have recorded a steadily increasing loss each year for the past 10 years. Some savings are expected in the

next financial year due to investment in recycled water (approximately $10,000 - $15,000 per annum);

Alternative revenue sources will be required to sustain the ongoing operation of the saleyards. Community groups were beginning to use the former Market Office building and generate a supplementary income stream before the fire;

Some preliminary discussions have been held regarding establishing a regional Saleyards facility at Ballarat or Mortlake;

Council has the option of gaining accreditation through the Livestock Saleyards Association of Victoria (LSAV), however the costs of compliance are considered prohibitive and accreditation has not been sought;

By owning and operating the saleyards, Council retains significant risks relating to Occupational Health and Safety and animal welfare;

A recent review of Occupational Health and Safety (OH&S) resulted in the issue of an Improvement Notice regarding the facilities for unloading of cattle; this issue was resolved in 2007;

The Saleyards complies with OH&S requirements. The facility has been audited by Worksafe twice. The second audit resulted in an issue of notice which was satisfied within 7 days. However, potential longer term risks remain;

Within Council, Saleyards management and oversight has been transferred a number of times, from Local Laws, Sport and Recreation to Engineering Services. At present, one day per week is allocated at officer level (team leader) for day-to-day management of the saleyards operations and improvements. These staff costs are not included in the Saleyards accounts.

L IVESTOCK

Macro-level changes to the Saleyards industry have meant that most Saleyards are facing financial difficulties. This is primarily due to long term declining throughput and an increasing proportion of direct transactions between larger farms and key buyers (including supermarkets). The introduction of ID tags for all livestock has also reduced the need for saleyards. For example, every head of cattle can now be tracked ‘from paddock to plate’;

A stable level of stock throughput is expected for coming years in Geelong. However, current throughput levels are much lower than during the drought;

The majority of stock is sourced from the City of Greater Geelong and Surf Coast Shire, generally from the Bellarine Peninsula, Surf Coast and Winchelsea areas;

Ballarat Saleyards are the key competitor for Geelong. Geelong is understood to have higher selling fees than Ballarat. Fees are currently only increased by CPI.

Only two stock agents currently operate at the Saleyards: Richardsons and Stuart. Elders recently discontinued selling in Geelong;

Some abattoirs are active buyers, but most are small, local buyers;

The Saleyards are the emergency evacuation point for livestock in the region;

INFRASTRUCTURE

The Saleyards require only 50% of current infrastructure and pens at peak use;


A capital works program has been progressively undertaken at the site based on the recommendations of the CMP. Stages 1 to 3 have been completed (including concreting, new covered walkways, computer and phone line upgrades, and upgrades to unloading facilities). Further works have been put on hold pending this review;

Regulations and compliance costs for Saleyards are increasing, placing pressure on Council to upgrade facilities and make capital improvements. This is becoming increasingly unsustainable within the Saleyards ‘business model’;

A design for a new effluent drying pad has been completed by Council – the pad is proposed to be located adjacent to north-western corner of the cattle pens. This would eliminate the need to lease land from the Sphinx, as the materials currently stored on the leased land could be located elsewhere on the site;

The truck wash is a profitable component of the site;

Access to recycled water has been recently installed at the site.

HER ITAGE AND SOCIAL VALUES

The Saleyards act partly as a social club, providing a valued meeting place and opportunity to socialise and discuss regional and personal issues;

The loss of the former Market Offices has resulted in the loss of community meeting space, which was becoming more frequently used by a range of groups in recent years;

Users of the saleyards have a sense of ownership of the site, due to the longevity of use, the ‘public’ ownership of the facility, the open / unlocked / informal nature of the site and the lack of alternative uses of the site. Existing users are reticent to ‘allow’ or accept other uses on the site.

SITE CONTEXT AND OPPORTUNITIES

Urban development is encroaching on the Saleyards area, especially residential development of the Geelong Golf Course. The current location is now sub-optimal for a saleyards facility;

It is considered unlikely that there would be any interest (or the requisite skills) to privately operate the facility;

The site is currently significantly under-utilised, with sales only taking place fortnightly (sheep and cattle) and weekly (poultry).Other than one day before and after each sale day, the site is not currently used for other purposes.

There is understood to be private interest in purchasing parts of the saleyards site;

There is the opportunity to introduce other uses, such as markets, community uses, meetings, clubs, driving school. There are a number of regular markets operating in Geelong (Beckley Park, Belmont, Showgrounds, Johnson Street), so any new market would need to be differentiated from the timing, product mix and quality of existing markets.

Existing markets include:

Beckley Park Market (Corio), weekly (Saturday 8:30am – 1pm), fruit and vegetable, fresh produce, clothing, leather goods;

Johnstone Park Night Market (Central Geelong); Friday nights in summer 5:30pm – 10pm; fashion, craft, entertainment, health and wellbeing;

Showgrounds (Geelong Showgrounds, Breakwater); weekly (Sunday 8am – 2pm), fresh produce, second hand, household goods, clothing, toys;

Belmont Market (Belmont); weekly (Sunday 8am – 1pm), fresh fruit and vegetables, clothing, plants, second hand.

Markets selling fresh produce would not be permitted to sell eggs, and wheat could not be sold on site due to a stock feed store being located within 500m (Geelong Farm Supplies, 122 Victoria Street);

One opportunity for an ancillary use could be pet sales, given recent regulations which limit pet sales within shopping centres;

Occasional complaints are received by Council regarding animal welfare. Many of these were related with poultry sales, which were temporarily closed while these were investigated. Poultry sales have since recommenced under a new licence agreement, which has close regard to animal welfare practices and requirements. Occasional noise complaints are also received from nearby residents, usually related to cattle and truck wash noise at night. Occasional complaints are also received regarding waste water odour. Total complaints average approximately 2 per month;

Any reuse / redevelopment of the site would need to have regard to potential site contamination, including possible historical use of dieldrin or arsenic;

5.4. SALEYARDS STAFFIndividual consultation was undertaken with each of the full-time Saleyards staff members: Peter Bohling and Laurie Fitton. Key findings from this consultation are as follows:

User fees are relatively low and have only been increased by CPI in recent years;

Stock levels can fluctuate strongly. High volumes were last experienced during the drought (approx. 2000 – 2010), whilst lower stock numbers are bought and sold during times of rain;

Long term stock volumes have generally declined;

The Saleyards compete with Ballarat and Colac. The Geelong auction time for cattle was changed to 12pm to allow users to attend both the Ballarat sales (at 8:30am) and the Geelong sales on the same day. In early 2013, sales were changed from weekly to fortnightly;

Most sellers are hobby farmers with small volumes, many from the Bellarine Peninsula. Some beef and dairy cattle are being brought from the Colac area to the Geelong sales – this is due to higher prices available in Geelong through a pre-sale weighing system in Geelong and a post-sale weighing system in Colac;

Sellers and their families often undertake a trip to “the city” on auction days combining stock sales with socialising at or near the Saleyards, and other activities such as shopping and eating out in central Geelong;

Prices in Geelong are currently slightly higher than in Ballarat, which attracts sellers to Geelong;

Key buyers are meat processers / wholesalers M.C. Herd (Herd) and The Midfield Group (Midfield).Other buyers include sheep shearers and small butchers;

The Saleyards have the capacity for approximately 2,000 cattle and 10,000 sheep. A typical sale in 2014 would total 300 cattle and 1,600 sheep, indicating that the Saleyards are


typically using approximately 15 – 20% of available capacity. In recent years, the peak volume of stock has been around 500 cattle per fortnight 3,000 sheep, indicating that peak demand equates to approximately 25% - 30% of capacity;

Additional ‘special’ sales were previously run until 2009, but concluded at the end of the drought. Special sales continue to operate in Colac and Ballarat, and typically attract thousands of buyers from across Victoria, New South Wales and Queensland;

Stock quality is fairly consistent, with typically high quality cattle and medium / high quality sheep being sold;

Sheep prices have remained strong (lambs currently selling for $150), due to consistent demand and a variety of buyers from Geelong and Melbourne, including smaller butchers and domestic purchasers;

The loss of the former Market Office building significantly reduced the facilities available to Saleyards users, leaving only limited facilities for agents and users to socialise. The opportunity for community and group meetings to be held at the site was also lost;

Significant infrastructure improvements are required at the site, and there is typically insufficient budget to make required repairs. Most urgent repairs needed are to the cattle pen bluestone floors, pen fencing and gates, and edging. Staff have limited materials available for repairs, and generally only have the ability to replace broken components rather than undertake ongoing maintenance, preventative works or improvements / upgrades;

The cattle pen bluestone floors are in a state of disrepair (see Figure 16), with most bluestones broken or uneven. This has serious implications for:

Occupational health and safety - the stones are not safe to walk on whilst handling animals / cleaning pens;

Animal welfare - bluestones are harsh for cattle to walk on at best, and the uneven and broken stones present more discomfort for the animals;

Operational and resource efficiency – pens with bluestone floors require significantly more time and water to clean than those with concrete or soft floors. Uneven and broken stones and further to the time and water requirements.

Figure 16 BLUESTONE PEN – UNEVEN FLOOR

Source: Urban Enterprise

Figure 17 BLUESTONE PEN – PARTIALLY CONCRETED

Source: Urban Enterprise

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Concreting or partially concreting the bluestone floors (eg. Figure 17) is expected to cost around $600 per pen, and could reduce water use to 25% of current requirements. Heritage significance of bluestones may prevent concreting;

The recent introduction of recycled water has the potential to reduce cleaning times through the availability of multiple hoses, and significantly reduce water costs. However, the system is not always available at present due to technical issues, and is not often utilised by staff due to this uncertainty.

Infrastructure upgrades and repairs would not be likely to greatly increase throughput or sales, but would improve safety, animal welfare and operational efficiency.

5.5. HERITAGE EXPERTSIndividual consultation was undertaken with Dr David Rowe, Council’s Heritage Consultant and author of the Saleyards Conservation Management Plan (2007), as well as discussions with a representative of the National Trust of Australia (Geelong and Region branch).

Key findings are as follows:

The original Saleyards in Geelong were located near the Barwon River, and then in Haymarket. No Saleyards buildings or structures remain at these sites.

The Saleyards at Weddell Road remain in the original design and layout, and have been largely unaltered since construction in the late 1800s. A number of components of primary heritage significance remain, including the layout based around the central thoroughfare, original cattle and sheep pens, loading ramps and bluestone pen floors and drains;

Most other Saleyards in Victoria of similar age and design have been either substantially modified (eg. Ballarat) or closed (eg. Newmarket);

The Heritage Overlay for the Saleyards was introduced into the Greater Geelong Planning Scheme as planning scheme amendment C183 (October 2009) with unanimous support from Councillors. A recommendation of the CMP to consider listing the Saleyards on the Victorian Heritage Register was not adopted by Council;

The former Market Office building was a significant component of the heritage value of the Saleyards. The reopening of the building was attended by the National Trust and Councillors, and a Heritage Award was presented by the Geelong branch of the National Trust to John Brown and David Hannah (Council) for the restoration of the Market Office building in 2011;

The former Market Office building was the focal point for the Saleyards, and was positioned at the head of the key axis around which the original components of the layout (sheep and cattle pens) were constructed;

Following a fire which destroyed the market office building in 2013, the building remains were demolished and removed. It would not be necessary for any reconstruction of the building to reflect the original design. However, the central location is considered significant;

The Saleyards have heritage and political significance, given the strong relationship between the Geelong Council and the history of the Council and the community;

The continuity of use of the site for stock sales is a key component of the historical and social significance. The continued use is considered as significant as the remaining built fabric of the Saleyards;

The location as a meeting place for farmers and other users of the site has strong social significance. Despite the reduction in volume of stock and number of users over time, the site still plays an important role in maintaining social interaction for users, many of which have an ongoing and inter-generational association with the site and other regular users;

Heritage sites such as the Saleyards require significant ongoing investment to repair and maintain existing structures, including retaining a safe environment for operations and employees. Given the current state of relative disrepair of much of the original pens, floors and ramps, significant reinvestment is required. This reinvestment may require alterations or sale of parts of the site to obtain sufficient funding and to retain the primary heritage components of the site. If the use of the site as a Saleyards is lost, the built components of the site would also be likely to lose much of their significance – this may require a pragmatic approach to heritage conversation;

Any redevelopment of the site for ongoing use as Saleyards should retain as much of the primary heritage components as possible, and any redevelopment of the site for other purposes should retain examples of heritage components and interpretation of the site’s history and significance;

It is important that the ongoing operations of the Saleyards are not compromised by further urban encroachment (eg. additional residential development adjacent to the site).

5.6. KEY USERS AND STAKEHOLDERSThis section provides a summary of consultation with key users and stakeholders, including buyers, sellers, contract operators (Scanclear), transport operators, the Department of Environment and Primary Industries (DEPI) and the Livestock Saleyards Association of Victoria (LSAV). A detailed summary of the consultation with these user groups can be found in Appendix A.

Viability:

The facility is close to the end of its working life and requires high maintenance.

Closure of the saleyards could create social and business impacts, objections to council, increase in cartage costs, disadvantage small producers, loss of traceability of some stock and buyers would find stock elsewhere including direct sales.

There is a general agreement that there is a continuing place in the market for saleyard auctions;

Geelong is a competitive market and gets good overall prices;

Scale and regionalisation:

Geelong saleyards could survive on a smaller scale;

There is agreement that development of a regional saleyard is likely, and general support for regionalisation from stock agents and buyers.

Regionalisation will set the scene for the future of Geelong saleyards;

Buyers believe there will always be a place for Geelong saleyards, but the ‘numbers’ are in favour of a few large selling centres;

LSAV sees a potential role for Geelong saleyards as a boutique operation – a niche market for small producers;

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Distance to regional saleyards may impact clients and they may not be able to handle the very small individual lots from lifestyle farmers;

A regional monopoly ownership of saleyards is likely;

Competition between selling methods will rationalise the role of the saleyards state-wide with a potential for a regional selling centre to evolve;

Regional saleyards would reduce time and transport for agents and buyers but would only provide for sheep and cattle;

There is speculation about actual location of regional facility;

Throughput:

Geelong saleyards are receiving less stock due to subdivision of larger properties, resulting in small hobby farms;

Livestock numbers are insufficient for long term viability at Geelong and are trending down;

Sales at the saleyards have been declining in numbers of stock on offer for many years and are well below the capacity of the facility.

Very few stock agents or meat companies now attend every market at Geelong;

Direct Sales:

Consensus that buyers use saleyard auctions as well as direct purchases from the producers;

Direct sales are impacting on the viability of the saleyards auctions; Private buyers use the auction price as their queue to set their prices. Their direct buying includes electronic sales (5%), direct buying for supermarkets (Woolworths) is all from private sales;

Hobby farms: Small farmers prefer to sell locally and have different needs compared to large producers; The support of Geelong saleyards by hobby/small farmers makes it an important facility to ensure traceability under the National Livestock Identification Scheme (NLIS);

Operations and facilities:

Poultry sales run smoothly, with generally 80-90 pens per week;

Anecdotally, Scanclear’s services have extended the viable life of the saleyards;

Transport operators are generally satisfied with the truck wash facility;

Canteen and office facilities are important to users and are currently inadequate;

Risks: There have been animal welfare issues in the past; however these issues have been resolved. Animal welfare activists are a concern to all users due to bad publicity. In addition, there are ongoing OH&S issues at the Saleyards;

Social value: The social and business aspect of the Monday sale at Geelong is very important to all users (vendors including poultry, stock transporters, agents and buyers);

Opportunities / Future Use:

Various revenue raising activities could be introduced e.g. community markets; however there is opposition to activities that would compete with local traders or existing community market;

There is a preference for Council to operate the Saleyards for the status quo, with a contract arrangement with Scanclear for the weighing and identification scanning;

Relocation cannot be justified for the Geelong saleyards, this may be viable as part of a regional model.

There is a need for the saleyards to remain open for another 3 to 5 years until there is a commitment to an alternative regional facility;

Privatisation: The cheapest option for Council is to keep the saleyards open and divest to a private operator. However, there are many viability and liability issues for a potential private operator (OH&S, animal welfare); and fees would rise if the facility was privately operated.

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6. ISSUES, OPPORTUNITIES AND OPTIONS

6.1. INTRODUCTIONThis section provides an overview of issues and opportunities raised and observed during research and consultation, and options for the future operations of the facility and use of the site.

6.2. ISSUES

6.2.1. FINANCIAL SUSTAINABILITY

The primary issue relating to the Geelong Saleyards is the poor financial performance over a long period of time. The Council operation of the site has resulted in a net operating loss of in excess of $1m over the past 8 years, with a loss reported each year, together with capital investment of more than $700,000.

The forward budget for the Saleyards forecasts ongoing losses of a comparable scale, in the order of $180,000 per annum. In effect, Council is subsidising the operation of the facility whilst also making capital improvements which are not included in the operating losses identified. No material reviewed as part of this study indicates that the saleyards is likely to become financially self-sustaining in the future under the current circumstances. In fact, the long term trend of declining throughput suggests that unless significant changes are made to the cost structure of the facility, the financial losses may in fact increase over time unless intervening action is taken.

6.2.2. OUTLOOK FOR SALEYARDS

The Victorian Saleyards industry is in decline. Factors such as the increasing proportion of direct sales (stock sold direct from farms to buyers such as abattoirs and supermarkets), increasing export markets, tracking/identification of livestock and electronic sales are resulting in reduced demand for saleyards. Saleyards throughput is in decline across Victoria, and the Geelong throughput has decreased at a greater rate than the state average.

The increasing requirements for all saleyards to comply with government regulations (including livestock identification, animal welfare and occupational health and safety) has generally increased costs whilst declining throughput has reduced income. This is considered likely to lead to the closure of smaller saleyards such as Geelong, as foreshadowed by 1Hassall and Associates:

“In the future, the national saleyard network will be more regionalized with significant numbers of the smaller saleyards closing down, either unable to comply with increasingly stringent government regulations and/or unable to source sufficient capital to provide a level of technology comparable to their regional counter parts…To be viable in the long term, saleyards need sufficient throughput to cover the overhead costs incurred in meeting the cost of government regulations, associated technology and on-going maintenance needs.”

The vendor and agents fees in Geelong are comparable with fees in other saleyards in Victoria, yet the current fee structure does not cover the costs of operating the facility. Council’s analysis revealed that fees would need to be doubled in order for the facility to ‘break even’. Whilst there may be some scope to increase fees, or at least to decouple the fees from the modest increases as adjusted by CPI, a fee increase alone is not expected to materially change the financial performance of the Saleyards, and could result in a further decrease in throughput.

1 A Review and Analysis of Saleyard Marketing in Australia, Hassall and Associates, p.22.

6.2.3. HERITAGE AND SOCIAL VALUE

The heritage and social values of the Saleyards were identified as significant, primarily due to the uninterrupted operations of the facility since 1869, and the layout of the site being a rare example of 19th century saleyards design. However, the heritage elements of the site result in many operational inefficiencies and safety issues, including the significant time and water required to clean cobblestone pen floors, and safety issues and high replacement costs associated with ageing timber fencing and gates.

The social value of the saleyards is recognised by users of the facility, and has been identified by some as a sufficient rationale for maintaining the current operations despite the declining throughput and poor financial performance. The use of the site has decreased over time in line with throughput, however, and although the site maintains strong heritage value and social importance to the user groups, these benefits extend to a relatively small proportion of the municipal population.

The Heritage Overlay requires any development of the site to consider the heritage significance of the Saleyards.

6.2.4. MARKET OFFICES

The loss of the former Market Office Building through fire was a significant setback for the saleyards. The building was the central location for users to congregate, conduct business, socialise and access refreshments. The building also provided meeting space to other groups not related to Saleyards operations.

The former building is understood to be covered by insurance, however the loss of the building has diminished the heritage and social value of the site. Temporary replacement facilities do not provide the same level of service to staff and users.

6.2.5. QUALITY OF FACILITIES

In general, the current facilities require significant maintenance, repair and replacement work to improve the overall quality and safety of buildings and pens. Whilst a significant capital works program has been undertaken over the past 7 years, substantial further works are required. At present, limited maintenance work is undertaken due to funding constraints, meaning that components of the pens or buildings are typically only replaced or repaired once damaged or no longer functional.

Staff are unsure of the heritage requirements of maintaining or replacing pens, and noted the difficulty and expense in sourcing timber materials to replace existing facilities with like-for-like material. As a result, the saleyards retains high levels of risk relating to occupational health and safety and potentially animal welfare.

Only around 25% of pens at the Saleyards are currently required to handle throughput. As a result, the use of the site is highly inefficient.

The site is poorly secured, with manual gates often left open at all hours by transport operators using the truck wash. Automated gates are required to improve site security.

The facilities provided for users and agents are of a poor standard. Scanclear do not have a proper office facility to conduct their required paperwork.

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6.2.6. URBAN INTERFACE

The saleyards are now surrounded by urban development. Whilst this has some benefits relating to co-location with agricultural supplies business in the adjoining industrial area, the increased traffic and residential interface presents issues for Council and users. In particular, Council receives regular complaints from nearby residents regarding noise from stock held overnight, and use of the truck wash, particularly at night.

The current location is no longer suited to a saleyards facility.

6.3. OPPORTUNITIES

6.3.1. SALEYARDS OPERATIONS

Opportunities to improve the efficiency and financial performance of the saleyards include:

Reducing staff hours – this could reduce overall costs, however the impact on facility maintenance and safety could be detrimental. Reductions in staff would only slightly reduce the cost base. As a standalone measure, this would not have a significant impact on the financial performance of the saleyards. Any staff reductions would need to be undertaken in conjunction with other measures to have a material impact on financial performance;

Increasing sales fees and charges – consultation revealed that some stakeholders considered the fees to be too low. Research shows that the fees are slightly lower than the Victorian average. A significant increase in fees could result in a further decline in usage and throughput, and fees would need to be doubled to cover current operating costs;

Limiting hours of operation for the truck wash and increasing fees – this could reduce interface issues, and increase revenue to better reflect the value of this service to the transport industry. The truck wash is understood to be the only such facility of its size in the Geelong region;

Reviewing lease arrangements – Council currently leases land from the Sphinx to store materials and dry excess effluent. The significant amount of unused land in Council ownership could be used for this purpose, eliminating the need to continue the lease and reduce outgoings. Further, the leases with Target and Jeffrey Bracken should be reviewed to ensure that market value is being paid to Council for the respective uses, and that appropriate adjustments are made over time. It is estimated that these adjustments could result in a net improvement to the budget in the order of $15,000 per annum;

Access recycled water – it is understood that despite recycled water being available for use at the saleyards, technical issues are currently limiting the use to a very small proportion of total water use. The use of recycled water to its maximum capacity, through resolution of current technical problems, could result in significant efficiencies in terms of time required to clean pens, and water cost savings. It is estimated that this could result in a saving in the order of $6,000 to 10,000 per annum. A saving of $6,000 has been factored into the budget for 2014/15.

Whilst the opportunities identified could have a relatively significant cumulative impact on the overall performance of the facility, it is considered likely that the facility would continue to post a significant operating loss. A combination of the above actions could result in a saving of approximately $30,000 per annum. However, this saving would take some time to implement and would be dependent on each measure having the estimated financial impact.

An alternative opportunity exists for Council to lease the operation of the saleyards to a private operator. This option is discussed in section 6.4.

6.3.2. SOCIAL

Users of the saleyards have expressed the need for new facilities to replace those lost in the Market Office building fire, such as a kitchen, toilets, offices, and, importantly, a central meeting place for all buyers, sellers and agents. For the saleyards to be successful long term and to retain the social value established over time, a new purpose-built central facility would need to be constructed.

It was also noted through consultation that the overall number of people using the saleyards has decreased over time, and the remaining users are generally older generations with a long association with the site and to the social connections developed at the saleyards over time.

6.3.3. ANCILLARY USESThe large amount of unused and underutilised land presents a significant opportunity for ancillary uses on the site. In addition, the fortnightly occurrence of sheep and cattle auctions means that the site is only used for stock selling purposes for 3 to 4 days per fortnight. This presents the opportunity to utilise the significant land areas for other uses which may serve a community purpose, and assist in generating income for the site. The hire of the former Market Office building to community and other groups for meetings in recent years indicates that there may be ongoing demand for this type of facility hire, however the reconstruction of a purpose built facility would be required to ensure that indoor uses have sufficient space to hire, and potential outdoor uses have appropriate amenities available.

Suggestions for ancillary uses include markets, a driving school, pet sales, clubs and meetings. The most common suggestion is for a market to be established on the site. However, a number of regular markets already operate in Geelong, and restrictions on selling fresh eggs and wheat on the site would somewhat limit the opportunity for a fresh produce market or rural supplies sales. There is also known to be resistance to the establishment of alternative uses by regular saleyards users, who are accustomed to a long history of exclusive use of the site.

Nevertheless, alternative uses should be considered for the site in order to improve efficiency of land use, and to assist in generating further income to support the saleyards operations.

6.4. OPTIONSCouncil has a number of options to consider regarding the future use of the Saleyards facility. Based on previous reports and the consultation and research findings of this study, options include:

1. Business as usual;

2. Revise cost structure;

3. Reinvestment;

4. Relocation;

5. Reduce scale or adapt focus to niche stock;

6. Divest operations;

7. Facilitate a transition to a regional saleyards;

8. Closure.

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6.4.1. BUSINESS AS USUAL

This option involves Council making no changes to the Saleyards operation model – Council would continue to operate the Saleyards under the current circumstances.

This option presents a number of risks to Council. Primarily, the ongoing net loss to Council could be expected to continue at best. Losses could increase in scale over time as the saleyards industry becomes less sustainable overall, in particular for saleyards with low throughput such as Geelong. The ongoing subsidy of the saleyards operations would need to be considered in the context of the wider Council budget.

Other challenges associated with this approach include the ongoing maintenance and repair work required to improve the facilities to a standard that is acceptable from an occupational health and safety and animal welfare perspective, potential decreasing levels of throughout and the continued costs associated with ensuring compliance with government regulations regarding livestock identification and handling.

Benefits of this approach include retaining the continuous operation of the facility, retaining all heritage elements and retaining opportunities for social interaction.

6.4.2. REVISED COST STRUCTURE

This option would involve Council revising the Saleyards cost structure. Currently, there are operational and expenditure inefficiencies, which if rectified could produce a moderate cost saving to Council. This option would involve revising lease arrangements, particularly in relation to the Sphinx land, currently used for effluent drying and materials storage. There is significant space for effluent to be dried within the site through the construction of a concrete pad.

Staff reductions could be considered, given the declining throughput and high proportion of operational costs associated with staffing.

Fees could be slightly increased to improve operations income. Currently the fees at Geelong are slightly below the Victorian average. These fees could be slightly increased to generate marginally higher income. The truck wash could also generate increased income through higher fees which reflect the high value and relative scarcity of such facilities.

Although only likely to produce a relatively modest reduction in the ongoing loss to Council, a combination of these measures would improve the efficiency of the operations and generate a financial benefit to Council compared with the status quo, with savings in the order of $30,000 per annum considered to be achievable once key measures have been implemented. These savings would be dependent on the successful renegotiation of leases, alternatives for drying excess effluent, implementation of regular use of recycled water and potentially sensitive adjustments to fees and staffing levels.

6.4.3. REINVESTMENT

This option would involve Council retaining operation of the facility, and reinvesting in significant upgrades, such as further soft floor cattle pens, a potential covered area as identified in the CMP, and upgrades to buildings and pens. These reinvestments in the current site would require significant funds and a commitment to the long term operation of the saleyards by Council.

The costs associated with reinvestment are significant. As an example of the scale of reinvestment costs, the upgrades recently commissioned for the Wangaratta Saleyards are expected to cost in the order of $3-4m, including covered cattle pens and soft flooring. Whilst the Wangaratta Saleyards are significantly larger than Geelong, it is considered likely that any such reinvestment in

Geelong would cost in the order of at least $2-3m, not including construction of ancillary facilities and offices. Previous estimates prepared for Council (2003) for upgrades to the facility were in the order of $2m. This outlines the likely order of magnitude of strategic upgrades required to the facility – further investigation would be required to provide a more detailed cost estimate relating to a specific scope of works for reinvestment.

Given the long term decline in throughput despite significant capital improvements made to the Saleyards in recent years, it is considered unlikely that significant reinvestment in the Geelong Saleyards would result in an increase in throughput and thereby result in a sufficient return on investment for Council. Further, the current location is sub-optimal due to access and interface issues, strong competition with other saleyards in Colac and Ballarat, and the likelihood of the establishment of a regional saleyards in the western Victoria would further reduce the likelihood of a significant change in throughput and profitability in Geelong.

6.4.4. RELOCATION

Council has the option of seeking an alternative site for the saleyards and continuing to operate the facility. A new location with better highway access and no interface issues could improve the attractiveness of the facility to transport operators and reduce negative impacts on other land uses. However, the cost of securing a new site and relocating / replacing improvements and plant would be prohibitive. Relocating the saleyards would also result in a loss of the heritage value of the existing site. This would facilitate an alternative use and/or disposal of the site.

6.4.5. REDUCE SCALE OR ADAPT FOCUS TO NICHE STOCK

Given the low throughput and inefficient use of land, an option for Council is to reduce the scale of the sale yards, and to potentially focus on sales other than sheep and cattle. This would result in a smaller ‘niche’ or ‘boutique’ saleyards, where poultry, pigs, alpacas, pets, etc. could be sold.

Whilst this adaptation response could make other sections of the land available for alternative uses or divestment, the costs associated with maintaining a small saleyards (management, cleaning, maintenance, weighing, etc) would be not be significantly lower than the current saleyards. The loss of the core income from cattle and sheep sales would be likely to result in an unsustainable operation.

An alternative option to reduce the scale of the saleyards would be to consolidate pens and parking areas in order to reduce maintenance costs and to allow for excess land to be sold for other purposes. This approach would require close consideration of large vehicle access and turning requirements. This option could generate funds through the sale or lease of surplus land to contribute to capital improvements.

6.4.6. DIVEST OPERATIONS

Given the high level of operational risk associated with operating the saleyards, a key option to consider is divesting operations to a private operator. This option would involve Council retaining ownership of the land and facilities, and a private business operating the site under a long term lease.

This option would have benefits for Council, in that the ongoing financial loss projected for the facility could be mostly avoided, and some of the site risks would be borne by the operator. However, given the poor performance of the saleyards in terms of throughput and return, it is considered unlikely that there would be private interest in operating the saleyards in its current condition.

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The project team consulted with one such private operator, who expressed strong doubts regarding any private business wishing to operate the facility in its current state, due primarily to the low throughput and the poor quality of the improvements. Substantial reinvestment would be needed by Council in order for a private operator to accept the occupational health and safety risks at the site. It was also noted the any private operator would be likely to significantly increase fees, which could in turn have a negative impact on throughput.

6.4.7. FACILITATE A TRANSIT ION TO REGIONAL SALEYARDS

Development of a new regional saleyards facility in western Victoria is considered likely to take place in the short to medium term. Regional Infrastructure Pty Ltd has made clear its intention of establishing a regional facility, potentially in Corangamite Shire, which would absorb a large proportion of throughput from the western regional saleyards including Colac, Camperdown and Warrnambool.

Consultation with transport operators and stock agents revealed that a regional saleyards would be an efficient way of consolidating sales in the region, and that the establishment of a new, purpose-built facility of that scale would result in significant declines in throughput in Geelong.

Corangamite and Warrnambool Councils are understood to be currently in discussions with Regional Infrastructure regarding the location of the potential regional saleyards, and the likely consequent closure of the municipal saleyards in Warrnambool and Camperdown. Moyne Shire has advocated for a regional study to ascertain the best location of the facility.

An option for Council would be to closely monitor and engage with proposals for the development of a regional saleyards proposal, with the intention of closing the Geelong saleyards at such time that the regional facility is operational. This is anticipated to be in at least 3 – 5 years’ time. This option would allow a transition period for agents, buyers, sellers and transport operators to adjust their strategies and practices in anticipation of the potential future closure of the Geelong saleyards, and would also allow Council to end the current lease arrangements at the site to facilitate potential divestment of part or all of the saleyards land for alternative uses.

This course of action could also be accompanied by a rationalisation of costs as identified in this report, in order to reduce the ongoing loss to Council associated with operating the saleyards in the interim period, and a policy of minimal new investment.

It is noted that no financial commitment has yet been made towards the establishment of a regional facility, nor has a site been selected and finalised. In this regard, the timeframe and details of a future regional facility are not certain. In the event that a regional facility is not established in the medium term, Council will need to consider the ongoing commitment to the Geelong Saleyards independent of the opportunity to ‘transition’ stock selling to a regional facility.

6.4.8. CLOSURE

The Council operations of the saleyards have been financially unsustainable under current circumstances for many years. Coupled with declining throughput across Victoria and the significant investment needed in the current facilities to meet government regulations and health and safety standards, closure of the facility prior to, or irrespective of, the development of a regional saleyards, is an option for Council.

This course of action would need to be accompanied by consideration of the heritage value of the site as part of any redevelopment, and would require a transition period to allow alternatives to be arranged by all users.

Closure would facilitate an alternative use and/or disposal of the site.

An assessment of each option is provided in the following section.

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7. OPTIONS ASSESSMENT

7.1. INTRODUCTIONThis section provides an assessment of the options identified in this report. The options have been assessed based on the following methodology:

7.2. OPTIONS ASSESSMENT MATRIXEach option has been assessed using an options assessment matrix, shown in Table 13.

The matrix has been compiled based on the research and consultation undertaken to inform this study. Each option is assessed based on economic, environmental, heritage and social factors. Based on these factors, the risks associated with each option are identified and assessed in terms of the likelihood of the risk occurring and the relative level of risk. The key implications for Council of selecting each option are also summarised.

The options assessment reveals there are varying levels of risk and implications across the options. It should be noted that each option is not necessarily mutually exclusive – some scenarios will allow options to be combined to generate the most desirable outcome for Council and stakeholders.

7.3. PREFERRED OPTIONBased on the triple-bottom line assessment of all options, it is considered that optimal approach for Council involves a combination of Option 7 (facilitation of a transition to a regional saleyards) and Option 2 (revised cost structure). Section 8 provides details of this course of action, including full recommendations and future actions.

TABLE 13 OPTIONS ASSESSMENT MATRIX

ECONOMIC ENVIRONMENTAL & HERITAGE SOCIAL RISKS (L = Likelihood of risk I = Impact of risk) IMPLICATIONS FOR COUNCIL

OPTION 1: BUSINESS AS USUAL

Continued net loss to Council in the order of $180,000 p.a.

Significant expenditure required to maintain facilities and mitigate OHS risk.

Continued levels of water use, waste, effluent and potential contamination.

Continuation of noise pollution from stock and trucks to residential areas.

Retention of heritage value, all heritage elements and continuation of use.

Retention of social value for agents and users. Social/office facilities upgrade required to

maintain user satisfaction. Social value is eroding over time due to reducing

number of users and loss of Market Office building.

Increasing net loss to Council - L = High | I = High Liability for OH&S and animal welfare events - L = High | I = High Decreased throughput - L = Medium | I = Medium Increased competition from regional saleyards - L = High | I = High Maintenance and capital work requirements. - L = High | I = Medium

Budget for ongoing net loss Continue to maintain and improve facilities to ensure

compliance with standards and OH&S Consider rebuilding market building. Provide Scanclear administration facility.

OPTION 2: REVISE COST STRUCTURE

Potential to slightly decrease financial loss by approx. $30,000 p.a.

Significant expenditure needed for ongoing maintenance.

An ongoing net loss in the order of $150,000 could be expected.




Retention of social value for agents and users. Social/office facilities upgrade required. Social value is eroding over time due to reducing

number of users and loss of Market Office building

Marginal reduction of financial commitment by Council – L = High | I = Low Liability for OH&S and animal welfare events – L = High | I = High Decreased throughput – L = Medium | I = Medium Increased competition from future regional saleyards – L = High | I = High Maintenance and capital work requirements – L = High | I = Medium

Consolidation of financial operations, including: Need to increase fees and truck wash fees. Revise lease arrangements. Alternative arrangements for effluent, e.g. concrete pad Minimal investment, but OH&S/animal welfare costs of

compliance/risk mitigation will continue Consider rebuilding market building. Provide Scanclear administration facility.

OPTION 3: RE-INVESTMENT

Significant cost of $2m - $4m required to upgrade the facility and operations of the Saleyards.

E.g. Wangaratta Saleyards upgrades, including new roof and flooring expected to cost between $3 and $4 million.

Continued/increased levels of water use, waste, effluent and potential contamination.

Continuation/increase of noise pollution from stock and trucks to residential areas.

Retention of heritage elements and continuation of use.

Potential conflict between reinvestment and heritage elements/values.



Unacceptable return on investment – L =High | I = High Liability for OH&S and animal welfare events – L = High | I = High Decreased throughput – L = Medium | I = Medium Increased competition from future regional saleyards– L = High | I = High

Budget for capital works program to upgrade the entire facility. Continue to fund ongoing operational loss.

OPTION 4: RE-LOCATION

Significant new land and relocation cost.

Income from disposal of current site could be in the order of $5m.

Continued operational losses likely.

Environmental impacts would cease on the current site

Environmental impacts transferred to relocated Saleyards, with opportunity to improve efficiency and reduce contamination risk.

Historical contamination may be present on site. Loss of heritage value of the site through

relocation and closure.

Social value for agents and users would be transferred to the new site and potentially slightly reduced. However, opportunity for interaction would be retained.

High cost to relocate the facility without a guarantee of increased financial performance or throughput – L = High | I = High

Decreased throughput– L = Medium | I = Medium Increased competition from future regional saleyards– L = High | I = High

Commitment of funds for land and relocation costs. Assessment of strategic new locations. Secure new site. Facilitate relocation of facility. Arrange alternative use of existing site i.e. disposal/re-use Continue to fund saleyard operations at new location.

OPTION 5: REDUCE SCALE / ADAPT FOCUS TO NICHE

Reduced expenditure and operating costs.

Would bring viability of facility into question if cattle lost.

Reduction in direct environmental impacts through a reduction in the scale of operations.

Heritage value is largely maintained.

Social value for users and agents would remain available, however any discontinuation of cattle sales would significantly reduce social value of site.

Social/office facilities upgrade required.

Failure of viability due to loss of core cattle and sheep sales– L = High| I = High Maintenance and capital work requirements– L = High | I = Medium Liability for OH&S and animal welfare events– L = High | I = High

Develop new business/operational model. Revise lease arrangements. Continue to fund operations. Consider rebuilding/replacing market building.

OPTION 6: DIVEST OPERATION

Council is divested of its financial commitments – net loss to Council could be significantly reduced or eliminated.

Retain ownership of land and facilities.






No expressions of interest received– L = High | I = Low Significant facility upgrades which would be costly – L = High | I = High EOI process is time consuming and costly – L = High | I = Medium Fee increases lead to a reduction in throughput, impact viability – L = Medium | I = Medium

Prepare and release EoI for the operation of the Saleyards. Continue to operate and fund Saleyards during EoI process. Potential facility upgrades to support divestment of operations.

OPTION 7: FACILITATE TRANSITION TO A REGIONAL SALEYARDS

Continued financial commitment for 3 to 5 years until a regional facility is established, with an ongoing net loss in the order of $180,000 p.a.

More certainty in longer term Council budget (i.e. operating loss will be eliminated in medium term).

Income from eventual disposal of site in the order of $5m (see Section 8.2 for details of indicative land value and approach to disposal)

Continued levels of water use, waste, effluent and potential contamination for the short term.

Continuation of noise pollution from stock and trucks for the short term to residential areas.

Retention of heritage value for the short term. Eventual closure would result in loss of heritage

value through discontinuation of use, however heritage elements and interpretation could be retained and incorporated in any redevelopment.

Retention of remaining social value for the short term and potential transfer to regional facility.

Provides a transition period for users and agents to adjust strategies and practices in anticipation of closure.

Social/office facilities require upgrading in the interim period.

Delay in regional saleyard (over 5 yrs) results in ongoing loss – L = Medium | I = Medium Decreased throughput over transition period – L = Medium | I = Medium Maintenance and capital works requirements – L = High | I = Medium Liability for OH&S and animal welfare events in transition period – L = Medium | I = High Unsuitable regional location for Geelong users – L = Low | I = Low Economic impacts on local economy – L = Medium | I = Low

Council to fund Saleyards operations for 3 to 5 years. Council to lobby for favourable location of regional facility. Provide assistance to industry during transition, including

livestock transport operators. Assist business transition/economic development initiatives. Eventual alternative use and/or disposal of current site.

OPTION 8: CLOSURE

Council is divested of its financial commitment to the Saleyards – net saving to Council in the order of $180,000 p.a.

Income from alternative use and/or disposal of site – site disposal in the order of $5m to Council.

Operational environmental impacts would cease. Contamination remediation may be required. Closure would result in loss of heritage value

through discontinuation of use, however heritage elements and interpretation could be retained and incorporated in any redevelopment.

A period of time before closure would be required to allow users to adjust as appropriate.

Social value would be lost, however continuation through other avenues/locations would be possible.

Community opposition to closure – L = Medium | I = Medium Economic impacts on local economy – L = Medium | R = Low

Investigate alternative uses, disposal strategy, timing. Notify users and stakeholders, prepare and implement closure

plan.

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8. RECOMMENDATIONS

8.1. OVERVIEWThe recommended approach in regard to the future of the saleyards is to facilitate a transition to a regional saleyards facility. This will require a step by step approach and various actions in order to generate a successful outcome for Council, users and agents.

As detailed in this report, the rationale for the recommended approach can be summarised as follows:

The existing operational cost structure and facility improvements required at Geelong will result in an ongoing loss to Council, in the context of low and declining throughput and significant risks to Council;

Regionalisation of saleyards is occurring at a rapid rate across Victoria and Australia, and is considered inevitable in the western and south-western regions of Victoria;

The Geelong Saleyards are nearing the end of their economic life and would require substantial investment to compete with a regional facility. Such investment in a small yard such as Geelong is unlikely to improve the throughput or financial performance of the facility.

8.2. RECOMMENDED APPROACHIt is considered likely that a regional saleyards will be operational, or at least plans and arrangements finalised, within 5 years. Whilst there is no guarantee that this will occur, the strong interest and public debate from Councils, private operators and stock agents in the south-western region indicates that regionalisation planning is well underway and that a new regional facility is inevitable.

The timeframe during which a regional facility is planned and constructed provides a suitable window for the operations of the Geelong Saleyards to be consolidated and for preparations to be made for the future closure and disposal of the site.

The recommended approach includes a range of actions designed to mitigate Council’s short term financial losses and risks, whilst facilitating the transition to a regional facility in the interests of Greater Geelong ratepayers. These actions are outlined as follows.

8.2.1. IMPLEMENT REVISED COST STRUCTURE

TIMING: YEAR 1 (2014/15)

The current operational model of the Saleyards is unsustainable. In order to mitigate further short term losses, there are a number of actions Council can take to reduce their financial liability, these include:

Increase fees to a level that is comparable with the Victorian average;

Increase fees of the truck wash to generate higher operating income;

Revise lease arrangements and eliminate unnecessary expenditure (this may require an alternative means of disposing of effluent i.e. through alternative land on site and/or construction of a concrete pad);

Consider a reduction in staff hours to align with lower throughput; and

Minimise capital expenditure (with the exception of maintenance and repairs required to ensure OH&S risks are minimised, and the establishment of temporary facilities as outlined below).

8.2.2. ONGOING FINANCIAL PERFORMANCE REVIEW

TIMING: ONGOING FROM YEAR 1

The financial performance of the saleyards should continually be monitored in order to ensure that Council is not bearing increasing financial liabilities. If the saleyards operations continue to result in declining profitability and the facility continues to decline in terms of throughput and buyers/sellers, Council could consider options to close the Saleyards prior to a regional facility becoming operational.

8.2.3. MINOR FACILITY IMPROVEMENTS

TIMING: YEAR 1 (2014/15)

There is an immediate requirement for additional office and canteen facilities that cater to users, agents and Scanclear staff. Demountable facilities could be provided which would provide office space for Scanclear to conduct paperwork and provide a place for social gathering and a canteen for users and agents. Additional temporary indoor space would provide significant benefits to users and employees and reduce Council’s occupational health and safety risks.

8.2.4. ENGAGE IN REGIONALISATION PLANNING

TIMING: ONGOING – YEAR 1 TO 5

Council should seek to be involved in the planning of a regional saleyards facility and facilitate a shift toward regionalisation for key stakeholders. Council involvement could include:

Lobbying for a favourable locational outcome of the regional facility (as close as practical to the City), through engagement with other Councils in the region;

Assist industry in transitioning to a regional system, including the livestock transport industry (through consideration of a central transport loading facility), and considering economic development implications for industries associated with the Saleyards, such as agricultural supplies and equipment.

8.2.5. DETAILED ASSESSMENT OF ALTERNATIVE USE AND/OR DISPOSAL OF SITE

TIMING: YEAR 2

Council should investigate undertaking a detailed assessment of alternative uses and/or disposal of the site in preparation for the medium term closure of the Saleyards. The assessment should take into account site constraints (such as heritage elements, land subject to inundation and potential contamination), strategic planning considerations and an assessment of property value.

8.2.6. CLOSURE AND DISPOSAL

TIMING: INDICATIVE YEARS 3-5 (DEPENDING ON REGIONAL FACILITY)

Once a regional facility is operational, the Geelong Saleyards could be closed to ensure that financial losses and risks to Council are eliminated whilst ensuring that alternative stock selling arrangements are provided for ratepayers, and a suitable transition period has been provided.

Potential closure and disposal of the saleyards should have regard to the land use and property considerations outlined in the following sub-section.

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8.3. LAND USE AND PROPERTY CONSIDERATIONS FOR DISPOSAL

8.3.1. OVERVIEW

This section provides an assessment of the highest and best use of the site in the context of eventual discontinuation of saleyards use as outlined in the previous sections.

8.3.2. LAND USE AND ZONING

The underlying zone for the majority of the site is Industrial 1 Zone. The southern Crown land parcel is in the Public Park and Recreation Zone.

The surrounding zones and land uses are as follows:

Industrial 1 Zone to the north, north-west and north-east along Weddell Road, Victoria Street, Thompson Road and Hepner Place, currently substantially occupied by showrooms and light industrial factories and associated offices. Uses include landscape and farm supplies, equipment sales (agricultural equipment, lawnmowers and forklifts), automotive industry (mechanics, auto parts sales, smash repairs, tyre sales), domestic products (furniture, floor coverings, colorbond roofing, cabinet making, floor coverings), light industrial activities (paper recycling joinery, steel products, marble and stone products, hydraulics, safety equipment) petrol station, parcel distribution centre and courier service, food wholesalers (fruit and vegetable, cakes), take away food, indoor recreation centre, coffee roasters, medical supplies, printing and telecommunications. There is one vacant site on Hepner Place (approximately 3,000m2).

Industrial 1 Zone to the west, including the head offices of Target Australia, the Sphinx Hotel complex and associated accommodation and at grade car parking. There is one vacant area at the rear of the Sphinx property (within Sphinx ownership), with an approximate area of 6,000m2), and a separate vacant parcel also owned by the Sphinx of approximately 9,000m2

(this is partially leased to Council for Saleyards purposes).

Special Use Zone to the south, owned by the Geelong Golf Club and associated developers, proposed to be partially redeveloped for residential use;

Residential 1 Zone to the south east, fully developed for standard density dwellings (600-800m2, typically modest brick veneer family homes);

Public Park and Recreation Zone and Residential 1 Zone to the east. The Residential 1 Zone is currently occupied by a substantial aged care hostel (approximately 1.2ha parcel), located immediately opposite the Saleyards entrance.

The surrounding area is characterised by light industrial uses and commercial uses. Whilst some residential uses are located to the east and south-east, these are relatively minor in comparison with the significant industrial area located immediately to the north.

The underlying Industrial 1 Zone of the Saleyards positions the Council–owned land as a continuation of the substantial North Geelong industrial corridor.

The lack of vacant land, generally high site coverage and high levels of activity in the industrial area indicate that the area is performing successfully and that there is likely to be demand for additional industrial land in the area. In particular, smaller lots appear to be well-utilised, with many service industrial businesses (automotive and domestic equipment manufacturing and sales)

and agricultural and landscape equipment sales and supplies located in the vicinity of the Council land and showing signs of strong economic activity.

Whilst the closure of the Saleyards would be expected to impact on some of the businesses located in this industrial area (such as the agricultural supplies and machinery sales), most businesses are considered to be linked to urban population and employment, such as the automotive industry, domestic products, light industrial, engineering and other uses. As such, the industrial area would be considered to continue operating strongly in the absence of the Saleyards operations.

INDUSTRIAL CONTEXT

The Local Planning Policy Framework (Clause 21.07-2) includes the following selected objectives for industrial development:

Protect existing and designated future industrial areas from encroachment by incompatible land uses; and

Provide sufficient industrial land to meet a range of industrial needs in Geelong, including small to medium sized industry.

The Saleyards are located on some of the closest industrial land to the Geelong Activity Centre. It is the second closest industrial zone to the Activity Centre Zone (approximately 1.4km), following the Fyans Street Industrial Area in South Geelong (1.1km south of the Geelong ACZ).

The site has good access for larger vehicles to the arterial road network, including the Midland Highway, Thompson Road (to Corio) and the Princes Highway (to Melbourne). The subject site includes large sections of flat land well suited to industrial use.

The Geelong Ring Road Employment Precinct provides a large amount of land supply for industrial growth. However, the majority of land is within the Industrial 2 Zone, designed to cater for large scale, heavy industrial activities which require significant buffer distances to sensitive uses. The GREP is located 10km to the north of the Geelong Activity Centre, and services a different market to that serviced by the industrial land surrounding the Saleyards.

However, it is understood that the Geelong industrial market is relatively weak at present, which is restricting property price growth and land consumption rates. At the time that disposal of the Saleyards land is to be pursued by Council, further assessment of the current property market conditions should be undertaken to inform a detailed site valuation.

8.3.3. RESIDENTIAL USE

Council could also consider undertaking a Planning Scheme Amendment to facilitate future residential use and subdivision of the site. This would introduce a ‘sensitive’ land use into an area which is currently dominated by industrial and commercial activities. It is considered that the appropriateness of residential development of the site would be limited by a range of issues, such as:

Potential contamination from Saleyards operations;

Buffer requirements to existing industrial and commercial uses;

Access conflicts with industrial vehicle movements on Weddell Road; and

Active reduction of land suitably zoned for employment purposes.

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Based on these restrictions, a rezoning for residential use would require further detailed investigation in respect of potential contamination, appropriate buffers to existing industrial uses and integration of the heritage elements.

8.3.4. DEVELOPABLE AREA AND VALUE

Any disposal and/or development of the site would be subject to planning overlays including Heritage Overlay and Special Building Overlay. These may slightly reduce the overall developable area of the site, however it is considered that the majority of the site would be developable.

Table 15 shows the indicative developable area of the site, taking account of areas required for drainage at the northern section of the site, and the retention of central heritage improvements as part of any future subdivision or development (potentially combined with an open space reserve or corridor). The indicative developable area of the site is estimated to be approximately 4.5ha.

Between 2011 and 2013, the average value of vacant industrial development sites in the City of Greater Geelong ranged from $142 to $250 per m2. These sites were typically in the order of 4,000m2 on average.

Sales data provided by Council indicates that larger industrial sites, such as the subject site, have been sold for lower rates in the order of $60 - $100 per m2. The subject site is more centrally located than most comparable sales assessed, and is well positioned relative to the existing North Geelong industrial area and major roads. It is considered that the Saleyards site could therefore attract a sales price of at least $100 per m2, and up to $120 per m2 depending on the market conditions at the time of sale.

Using this range as a guide, the indicative value of the developable component of the site is estimated at approximately $4.5m - $5.4m as shown in Table 14.

It should be noted that a site specific valuation would be required in order to ascertain the current market value of the site.

TABLE 14 INDICATIVE DEVELOPMENT AREA AND VALUE

Saleyards Area (m2)

Site Area (Council owned) 60,000

Drainage area (approx.) 10,000

Heritage improvements and open space (approx.) 5,000

GDA (indicative) 45,000

Indicative land value per m2 (broadhectare, IN1Z) $100 - $120

Indicative land value (broadhectare, IN1Z) $4.5m - $5.4m

8.3.5. PLANNING CONTROLS

In order to facilitate the disposal of the site and to ensure appropriate future development outcomes, a planning scheme amendment may be required. The following considerations for an amendment should be considered by Council:

Design and Development Overlay (DDO) and Development Plan Overlay (DPO) for planning control;

Environmental Audit Overlay – An environmental audit overlay may be required in order to ensure any site contamination is remediated prior to development and/or alternative uses.

Heritage overlay (adjustment/reduction to the existing overlay).

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APPENDICES

APPENDIX A CONSULTATION DETAILThe following is a detailed summation of consultation with users of the saleyards. This includes buyers, sellers, management (Scanclear), transport operators, the Department of Environment and Primary Industries (DEPI) and the Livestock Saleyards Association of Victoria (LSAV). The consultation has been summarised under key themes.

VIABILITY OF SALEYARDS

The Geelong Saleyards are getting less stock due to larger properties being subdivided, resulting in many small hobby farms.

It is a challenge to get competition from buyers at Geelong. There is a need for an increase in stock numbers to facilitate growth in buyers.

Present livestock numbers are insufficient for long term viability of the Saleyards.

There will be a reduction in saleyards in the future.

The same proportion of stock (66%) passes through the saleyards of the Western District but the volume/numbers are well down. Geelong throughput trends are on a par with other yards but they are all down. Geelong throughput is already small and it is at the tail end of the Western District, so there is a greater risk of non-viability.

VENDOR SUPPORT/STOCK THROUGHPUT

Small farmers prefer to sell locally at Geelong as they have smaller offerings and it is close. They represent a distinctively different group to large producers.

Fat cattle weighing prior to sale rather than post sale is an advantage for the vendor at Geelong.

Agents estimate the current vendor participation and offering size at approximately 140-150 vendors every fortnight at sheep and cattle sales.

The average lot size per vendor is 35-40 sheep and 8-10 cattle.

DEPI estimates that approximately 30% of animals for sale are from hobby farms.

BUYER SUPPORT/COMPETITION FROM BUYERS

Buyers say Geelong Saleyards are well supported by buyers.

Westside says it is a user-friendly market for the lamb and cattle trade types required at its meatworks. Westside buy throughout the western district to suit their product requirement, but always leave space to buy lambs from Geelong.

Geelong has smaller lamb types (body conformation) which suits the local market. During the lamb season, Geelong has 2-3000 lambs, which is well worth buyers attending.

Buyers say Geelong saleyards could survive on a smaller scale.

The buyers below support the Geelong fortnightly sales 90% of the time.

The regularly attending stock buyers are:

Sheep: Midfield, Herd, Wagstaff and Westside, Cedar

Cattle: Ralphs, Wagstaff, Herds, Poowong, Tabro, Corrigan (O’Connors), Westside, Mele

Local butchers (Middle East): Ahmed, Zahra

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STATE OF REPAIR OF THE SALEYARDS

The saleyards are close to the end of their life.

They require high maintenance levels.

POULTRY MARKET

The poultry market is held weekly on Monday’s at 10.00am. The poultry auction on the week of no other livestock auctions maintains its numbers on offer and the number of buying public.

There have been animal welfare issues in the past. DEPI is now satisfied with the animal welfare standards.

Poultry sales run smoothly, with generally 80-90 pens per week.

The other regular market in the State is at Whittlesea. Bendigo has occasional sales.

OCCUPATIONAL HEALTH AND SAFETY

OH&S is a major problem with issues that affect the staff.

OH&S is still a concern for producers.

At Geelong the greatest risks are OH&S (huge maintenance), and animal welfare.

Buyers say there are OH&S problems – public share same laneways as cattle and sheep, may need a selling ring.

ANIMAL WELFARE

Animal liberation groups make it very difficult (cameras in hats etc); they can be a major problem through their inexperience/knowledge (e.g. wool shedding sheep mistakenly reported as sick /unhealthy due to wool shedding).

Animal welfare (particularly poultry) is the biggest issue due to animal liberationists. The operation is now satisfactory.

There are few welfare issues with sheep and cattle. The blue stone floor is reportedly not an animal welfare issue.

Buyers and stock agents have also been concerned about the bad publicity from animal welfare groups particularly regarding the poultry facility.

COUNCIL OWNERSHIP OF ALL FACILITIES AND EQUIPMENT

Council does not provide IT services at the Geelong saleyards.

Scanclear do all of the work with the scales and anecdotally their services have extended the life of the saleyards at Geelong.

NATIONAL LIVESTOCK IDENTIFICATION SCHEME (NLIS) / TRACEABILITY

Hobby farmers are a problem with traceability and saleyards transfers are the only traceable approach.

NLIS is well managed and there are very few issues to follow-up with producers.

TRUCK / TRANSPORT FACILITIES

The loading and unloading facilities are limited so there is a wait behind other trucks.

Geelong saleyards are tight for B Doubles at the sheep ramp but the cattle ramp is satisfactory. There is no to deck ramp.

Truck wash (6.00am to 10.00pm) at the Geelong saleyards used 3-4 times per week by individual operators.

Users are satisfied with the truck wash but the coin operated facility is a bit inconvenient.

Some operators spend $1200/month at truck wash. There are no truck washes near Melbourne so the Geelong location is convenient.

One truck operator estimates the number of trucks present at Geelong on sale Mondays to be:

6 semi-trailers

3 B-Doubles

8-9 tray trucks

12-15 utes/trailers with cattle

50 utes/trailers for sheep

Producers estimate approximately 60 utilities and small trailers deliver sheep and cattle to the sales and they need Geelong Saleyards as a transfer facility to move small lots into trucks. Tray trucks that have picked up small lots also need the existing yards as a transfer facility to larger transports.

SOCIAL ASPECT

The social and business aspect is very important to all users (vendors, stock transporters, agents and buyers).

The facility allows for a mixture of business and pleasure.

Farmers bring along their kids and grandchildren and they learn how the saleyard system works for educational purposes.

SOCIAL AND BUSINESS FACILITIES

The caravan replacing the canteen is not appropriate.

There is a need for a canteen and office space to do business and eat.

There are currently inadequate facilities for business at present.

Producers favour converting the existing sheds to offices.

Producers really miss the canteen to conduct social and business matters.

PROPOSED REGIONAL SALEYARDS

Regional saleyard is likely to happen and is the biggest threat to Geelong saleyards.

Larger numbers of stock on offer at regional yards will mean more buyers, therefore greater competition for cattle, therefore there is support for the proposal for regional yards.

Regional saleyards will provide the stock numbers, therefore buying support and competition will increase to favour the vendors.

Geelong agents are very supportive of the regional saleyards proposal.

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Distance to regional saleyards will impact on Geelong Saleyards clients.

Regional saleyards may not be able to handle the very small individual lots from lifestyle farmers.

LSAV considers it likely that there will be a regional monopoly ownership of saleyards.

Regional saleyards would reduce time and transport for agents and buyers but would only provide facilities for sheep and cattle.

Regional saleyards will set the scene for the future of Geelong saleyards.

There is a role for Geelong saleyards as boutique operation catering to a niche market for small producers. Kyneton is the best example of a saleyard servicing small producers. Shepparton has also had success within this market.

Truck operators would have to change their carting patterns to work out of new regional yards, this may prove difficult.

Buyers say there will always be a place for saleyards, but the numbers are decreasing in favour of a few large selling centres.

There is a need for a central consolidated saleyards in the region and local district yards.

Buyers say it is inevitable that Geelong and Ballarat saleyards will have to move, they are antiquated and the OH&S is very poor.

Proposal for new Ballarat yards is likely to proceed once the site for relocation is settled.

A regional selling facility would require the merging of Ballarat, Camperdown and Warrnambool.

One buyer would prefer regional yards to be located in the vicinity of Meredith, Rokewood or Cressy. This decision would be likely driven by the relocation of Ballarat saleyards.

Some buyers’ opinion was that one new regional saleyard could not handle the volume of stock, especially during peak stock numbers.

It is the opinion of another buyer that there are too many saleyards. Geelong is struggling and Ballarat and Warrnambool etc. need to relocate. His opinion is there is a need for a central selling facility in the Western District, such as Newmarket.

A regional saleyards would put Geelong and Colac saleyards into a situation of catering primarily to small producers.

CAPACITY OF THE GEELONG SALEYARDS

Geelong is basically a fat stock (prime) market.

Saleyards in general are also important for store sales, however this is not done in Geelong as big numbers of stock are needed and it is driven by seasonality. The last special store sale in Geelong was 12 years ago.

Producers say Geelong still gets peaks in stock numbers that fill the yards.

Geelong statistics show throughput of 20,000 cattle and 200,000 sheep 10 years ago and throughput of 8,000 cattle and 70,000 sheep in 2013-14.

AUCTION PR ICES VS DIRECT SELLING PR ICES

Prices at auction are better than over the hooks at the moment, but this fluctuates. The trend from abattoirs is to get direct sales.

Direct clean and green sales getting some traction e.g. Coles.

LSAV notes that there is an increasing impact of direct sales on the viability of saleyard auctions. Alternative selling options are very difficult to quantify. Private buyers use the auction price as their queue to set their prices. Their direct buying includes via electronic sales (about 5%), direct buying for supermarkets (Woolworths) is all from private sales.

There is not sufficient data from saleyard sales to make comparisons.

LSAV is researching a data base with comparative descriptions. Meat and Livestock Australia (MLA) has comparative data from particular, significant yards, but not Geelong.

Scanclear says people have not trusted the internet sales option in the past due to inaccurate descriptions. This has changed; descriptions are now accurate and growth in internet sales is now positive.

Auctions are not the way producers are going with prime stock, they are moving to direct selling and many only send “bits and pieces” to the auction market.

FUTURE PLACE OF SALEYARDS IN THE MARKETPLACE

Stock agents say there will always be a place for the saleyards:

As a store for cattle sales;

Prevalence of small producers and distance to Geelong;

An auction makes more money for the producer overall, so buyers prefer direct sales.

Through their business, transport operators have not detected any real trend towards alternative selling to the auction sales.

One buyer uses saleyard auctions, as he claims it is the fairest way of buying and selling.

Producers say buyers prefer not to support saleyards but they still turn up at auctions.

Producers say saleyards help set the floor prices for direct selling. Meat buyers also get competition from buyers of store stock in the saleyards. Producers say they swing from auction to direct selling, depending on the prices at the time.

There can be high penalties for producers by selling direct. Only the best are sold direct and the rest go to auction. It is therefore impractical for small producers with small lots to sell direct.

BUYERS PREFERRED OPTIONS OF PURCHASE

Buyers say local agents know what buyers want and they talk to their clients. Westside buy 40% from auction and 60% direct buying over the hooks.

Westside say they can also buy sufficient stock types at Geelong auctions to suit the ethnic and traditional buyers.

One buyer’s preference is direct from farm to abattoir, with a premium paid to get product direct. The company purchase from saleyards out of season.

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Another purchaser only buys out of saleyards, as he claims it is the fairest way of buying and selling.

GEELONG SALEYARDS PR ICES COMPARED TO OTHER SALEYARDS IN THE REGION

Some buyers say Geelong is a competitive market and gets good overall prices - they are not the top or bottom of the market.

Big saleyard markets are good at marketing their yards e.g. they get their highest prices quoted on livestock reports.

Another buyer says the bigger the market the stronger the buying competition and therefore the higher the prices and vice versa.

Very few meat companies now attend every market at Geelong.

Truck operators consider prices at Geelong to be as good as anywhere.

Producers say: lambs get very good prices at Geelong due to the sales occurring on a Monday, as buyers often run out of supply from the previous week and need to top up. Geelong is a convenient sale for both local and Melbourne buyers. Geelong always provides a steady price for the fat/prime cattle market. The afternoon cattle sale suits the buyers who come from the Ballarat morning sale and provide good competition. Also cull cows and bulls fetch good prices.

ADDIT IONAL USES OF THE SALEYARDS

Stock agents consider alternative uses for the yards to be a sound idea e.g. community markets, clearing sales.

Ballarat saleyards will not have pig yards. LSAV believes that there is an opportunity for pig sales combining Ballarat and Geelong for residual numbers of pigs not going to direct sales. Also other niche markets such as alpacas.

Producers consider a potential alternative use for the yards to be a community market. However, on Sundays it could be in conflict with stock deliveries for the fortnightly Monday market. They would also compete with other existing/established community markets.

Producers don’t want anything that competes with local traders.

There may also be opportunities to increase poultry sales.

One buyer offered several future options for alternative uses:

Geelong is suited to selling smaller lambs and could specialise

There is a long term need to cater better for small producers, including:

A small set of saleyards to cater locally for horses, pigs, goats, alpacas and calves sales;

A shearing facility for smaller producers to clean up sheep for sale;

A set of cattle yards for weighing, ear tagging and drenching;

A small local abattoir for processing ethnic meat supplies;

Poultry sales;

Machinery sales every month at Geelong yards;

Saturday or Sunday community market.

IMPACT OF CITY OF GREATER GEELONG ON OPERATING THE SALEYARDS

Agents prefer the status quo; saleyards manager, Peter Bohling is very experienced and efficient.

Stock agents are happy with the improvements to the yards made by Council over the years. There is nothing major/structural needed to maintain the saleyards.

Council has been very good to the agents, but we would like the old offices near the canteen to be made available to the agents.

Scanclear also want to use the one of the old huts as an office on sale days. The current situation is completely inadequate for staff. Council are refusing this request.

Council own all the equipment used by Scanclear.

Scanclear pay rent to the owners on a throughput basis.

IMPACT OF RELOCATION OF THE SALEYARDS

It is too late to relocate Geelong yards due to likelihood of regional yards and continuing increase in small lifestyle producers.

Scanclear says it would be really hard to find a new site and get approvals. Location of new yards is difficult: manure, sludge disposal, effluent, size, noise etc.

Throughput for Geelong does not justify relocation or cost. Ratepayers would not pay.

Producer User Group considers relocation of the Geelong saleyards to be off the agenda.

Buyers say it would cost too much to relocate Geelong Saleyards and other western district saleyards due to declining throughput. Relocation of the Saleyards would only be viable under a regional consolidation model.

IMPACT OF CLOSURE OF THE SALEYARDS WITHOUT REPLACEMENT

The physical site and site facilities are close to the end of their life. However closure would greatly impact on the hobby farmers.

Agents say there is a need for Geelong saleyards to remain open until there is an alternative – say 3-5 years.

Agents consider the impact of the yards being closed with no alternative locally to be:

Backlash against Council from rural community;

Cost increase for cartage, more time spent and farmers may get lower prices for their stock;

Social impact has been eroded since the fire, so is not as big an issue as in the past.

Buyers say closing Geelong yards will have a strong social impact, but ultimately industry will dictate closure along with other saleyards.

Geelong should remain operating for another 4 years to allow regional plans to play out and explore other options. This would require Geelong fees to rise.

DEPI - Complete closure would result in small numbers of stock being sold without traceability, through hobby farmers finding alternative informal means of selling.

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Producers also say closure would impact on small growers who would turn to informal non-traceable means of trading.

According to DEPI, there would be social impacts on the regular farmer users with closure.

Transport operators- Many drivers have a lot of memories. One has been involved with Geelong saleyards for 50 years and they would not like to see the saleyards closed.

They are a social location for many people, not just the farmers.

Local closure without relocation would have a high impact on cartage costs. Clients are charged a ‘per head’ rate to Geelong because it’s local. They would have to charge a ‘per load’ rate (no matter the number of stock in the load) to Ballarat or other regional yards.

If Geelong saleyards closed there would have to be consolidation of small lots at a central point to cart to Ballarat or Colac etc. A transport hub is a viable alternative for small producers. Some operators could develop a transfer hub to create bigger lots for carting on bigger trucks if Geelong closed.

The producer user groups want the existing facility to remain as long as possible. Closure of Geelong would disadvantage small producers who would then have to cart stock a long way to alternative saleyards.

Producer group would not be happy with the alternative being a regional saleyard further away. Regionalisation and privatisation have not gained momentum yet. User Groups would like to see Geelong remain until there is concrete action on regional facilities.

Producers say Geelong saleyards are good for the local economy. Those attending sales also spend money in town. The saleyards have become the centre of a hub of farm supply businesses (eg Geelong Farm Supplies, Chemicals, JB Scott Machinery, Bellarine Trading, and Wool buyers). If Geelong saleyards closed, sellers would have to cart to Ballarat or Colac and would spend money in those towns.

If Geelong saleyards closed it would not have a dramatic impact on Westside Meats. They would buy the same types of stock elsewhere and might buy more “in the paddock” (direct sale). The Saturday closure would hurt smaller sellers.

Buyers say if Geelong closed there will not be a replacement and livestock in this area would still require a clearing house particularly for small producers.

A local buyer says Geelong is convenient and he doesn’t want to see Geelong yards close. He considered that the saleyards did not need all the land to function.

IMPACT OF CITY OF GREATER GEELONG MAINTAIN ING OWNERSHIP , BUT DIVESTING TO A PRIVATE OPERATOR

Livestock Saleyards Association of Victoria (LSAV) says competition between selling methods will rationalise the role of saleyards. In 20 years there will be no Council saleyards in Victoria. They will all be with private operators and this will impact on the viability of LSAV. This means a slow departure for LSAV, which represents Victorian saleyard owners, both publicly owned and private operators.

Scanclear says the cheapest option for Council to keep the saleyards open is to divest itself of them and put in the hands of a private operator.

There would be potential OH&S issues at Geelong if a private operator took over from Council.

Saleyards animal welfare would be a nightmare for a private owner at Geelong.

Council divesting itself of the Geelong saleyards would not concern truck operators unless fees increased. If fees increase vendors may leave and go directly to buyers or cart to Ballarat or Colac.

Producer groups favour Council running the saleyards, but would accept a private manager if that extended the operating life.

Westside Meat say they would not be concerned if a private interest ran the Geelong saleyards, provided it was run efficiently and maintained.

Another buyer was not concerned about a private operator taking over Geelong saleyards from Council. However, the cost of selling would probably rise.

One buyer’s opinion was that no private operator was likely to take over Geelong saleyards from the Council. There are too many viability and liability issues. A regional selling centre is an appropriate course of action.

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The table below shows details of consultation undertaken to inform this study. Urban Enterprise thanks these participants for their valuable contributions to the study.

Name Position Organisation Interest Date Method

Mr John Brown Team Leader, Graffiti and Saleyards

City of Greater Geelong

Council officer responsible for co-ordination of saleyards operations 2005 -

current14/4/14 Individual

meeting

Cr Tony Ansett Councillor City of Greater Geelong

Councillor for Windemere Ward, portfolio includes Heritage and Rural Communities 8/4/14 Councillor

Workshop

Dr David Rowe Consultant Heritage Advisor


Author of Saleyards Conservation Management Plan (2007), current Council

heritage advisor. 14/4/14 Individual

meeting

David Walker Secretary

National Trust of Australia

(Geelong and Region branch)

Heritage and conservation, Geelong region May 2014 (various)

Phone consultation

Henry Manzl Co-ordinator Project Implementation


Management and oversight of Saleyards operations for Council 8/4/14 Management

Workshop

Vicki Shelton Manager Engineering Services



Workshop

Gary Van Driel General Manager City Services



Workshop

Peter Bohling Supervisor – Geelong Saleyards


Saleyards employee 1979 – current, present supervisor. 31/3/14

Individual meeting and site

visit

Laurie Fitton Employee – Geelong Saleyards

City of Greater Geelong Saleyards employee 2004 – current. 31/3/14 Individual

meeting

Will Richardson, Peter McConachy,

Tom Phillips

Geelong Stock Agents Geelong Stock Agents 7/5/14 Group Meeting

Mark McDonaldCEO, Livestock

Saleyards Association Victoria

Livestock Saleyards

Association Victoria

Livestock Saleyards Association 7/5/14 Individual Meeting

Brendan Carey CEO, Scan Clear Scan Clear Scanning and weighing operations 7/5/14 Individual Meeting

Gordon Nash Senior Animal Health Officer

Department of Environment &

Primary Industries

Environment, Occupational Health and Safety, Animal Welfare 7/5/14 Individual

Meeting

John WoodTransport Operator

(single truck operator)

Transport 7/5/14 Individual Meeting

Eric Sharkey, Les Rowe, Lex Gugger,

Tony Ryan

Producer Users Group Producer Users Group 8/5/14 Group Meeting

Ray Clarke Livestock Manager Westside Meat Butchers/Processors (meat buyers) 8/5/14 Individual Meeting

Steve Cooper Stall Operator Victoria Market Butchers/Processors (meat buyers) 8/5/14 Individual Meeting

Ray Goodman

Truck fleet operators & delegate to

Livestock and Rural Transporters of

Victoria

Transport Operators 8/5/14 Individual Meeting

Bob Hackett Meat Buyer Ralphs Meat Company Butchers/Processors (meat buyers) 8/5/14 Individual

Meeting

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Name Position Organisation Interest Date Method

Graham Corbett Organiser, Poultry Market Poultry Market Organiser 8/5/14 Telephone

Interview

Frank Herd CEO MC Herds Meat Wholesalers Meat buyers 8/5/14 Telephone

Interview

geelong saleyards · web view... safety equipment) petrol station, parcel distribution centre...

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