A PREFEASIBILITY study on the establishment of a north-west WA beef abattoir has been completed, recommending that the area between Broome and Roebuck Junction be researched in detail as a possible site.
The study, which was commissioned by the Agriculture and Food Department and the Rural Industries Research and Development Corporation (RIRDC) in 2009, found that while a larger-scale processing facility was required in the Rangelands, the development of such a facility would not be commercially viable under current market conditions.
A lack of scale, seasonal variability, a strongly competitive live export trade, and the impact of a remote location on skilled labour availability were all cited as being drawbacks for processors considering investment.
With the heavy reliance of Rangelands cattle producers on the live export sector, the study found that an abattoir would simply not work as a back-up option for the live export trade.
The study recommended a formal review on the future of the live export trade in WA and the Kimberley region was highlighted as being particularly exposed to the trade given its proximity to South West processing.
For an abattoir to work in the area, the study said processing would need to become dominant and live export be the back-up option for producers.
Cost-wise, an abattoir in the Kimberley processing 400 head per day was estimated to cost around $33.85 million, excluding the provision of serviced land.
That was found to be a viable option with preliminary costings of operations and freight, but only if supply could be maintained.
"The great challenge is for the industry to re-orientate itself around a processing stream and wean itself off live export dependence," the study said.
"An industry restructuring effort towards the development of a significant agistment/backgrounding sector would benefit the industry generally, and also provide a more commercially attractive platform for a processing stream."
A mobile abattoir facility was said to not offer significant long-term industry benefits, but the report said it could be used as an interim step towards the development of a processing alternative for the region.
Other recommendations from the report included further research of the area between Broome and Roebuck Junction be researched in detail as a possible site, and that existing major regional and national processors be formally approached to consider commercial options for developing and operating a facility in north-west WA.
Agriculture and Food Minister, Terry Redman, said the study highlighted that an abattoir would be of great benefit to northern beef producers, but it would need a significant commitment from industry to be commercially viable.
"The restrictions on live exports brought about by the imposition of weight restrictions by Indonesian importers has highlighted the risks associated with the northern beef industry's reliance on a single market," Mr Redman said.
"This study was jointly funded by the State and Federal governments in response to the pastoral beef industry's strong desire to better understand its options in a changing global marketplace."
Mr Redman said the report sent a clear message about the changes needed to underpin a viable processing alternative in the north, and many of these changes were industry challenges.
"The report makes it clear that a northern abattoir could not survive on the leftovers from the live export trade," Mr Redman said.
"For this to work, it will require a major adjustment from northern producers, so I have asked the WA Beef Council to further consider the study and seek wider industry comment."
Now that the study has been completed, Mr Redman said the next stage aimed to build on the key findings by further investigating how the industry would need to change to support a viable northern abattoir.