MID West Development Commission (MWDC) export adviser Mike Kendall fears a Perth lupin processing plant will exclude the Mid West from an industry it has the potential to dominate.
The region is the world's largest lupin exporter and MWDC is investigating value-adding opportunities.
The group was unsuccessful in its bid to have Co-operative Bulk Handling (CBH) and George Weston Foods (GWF) build their $5 million lupin de-hulling plant in the Geraldton area.
CBH's Metro Grain Centre in Forrestfield was the preferred option.
CBH business development manager Bob Grant said the site had an infrastructure advantage and access to feed grain markets the Mid West did not.
Mr Kendall maintained the region had huge potential.
"Long-term, the Mid West has a good opportunity for feed-lotting cattle out of the pastoral areas. My prediction is that the pastoral areas will be used more for breeding, with the fattening done around Geraldton," he said.
He said MWDC was interested in processing to a later stage than CBH and GWF, but the new plant could still cause problems.
"Having the plant already there makes it far cheaper for them to do the next stage of processing alongside. It would be unfortunate if we see lupins grown here being sent to Perth."
MWDC received a $17,000 regional development grant for a feasibility study on lupin processing in the Mid West.
"At this stage I believe there is a lack of vision as to what opportunities exist in lupin processing," Mr Kendall said "The idea is to get someone to put their hand up and say I want to do something."
Mr Grant said CBH still had an eye on the region.
"Medium to longer term the Mid West does like quite attractive," he said.
As well as being widely used in sheep, pig and poultry rations, lupins can be used to make products for human consumption, such as milk, flour and pasta.
The Forrestfield plant will also consider feed applications for aquaculture.