ONE of WA’s major feedstock suppliers is about to lay off half its staff, after live exporter Livestock Shipping Services announced it would not export during the northern summer months due to Federal Government restrictions, creating an oversupply of pellets for livestock feed.
Macco Feeds Australia, Williams, which employs 20 people, is anticipating it will lay off about 10 casual, part-time and full-time staff within the next few weeks, according to manager Phil Beresford.
Mr Beresford said more would be known mid-week, but over the next three months operations would be scaled back, to run only one to two days a week instead of the seven days they have been operating in order to keep up with demand.
“This is huge for the company which has been running at full capacity as it will affect 70 per cent of production,” Mr Beresford said.
“Some of the staff have been with the company for 14-15 years and about a quarter of the staff for 8-12 years.
“Ninety per cent of the staff are locals or have moved to the area for work.”
Macco Feeds has normally kept a low profile and hasn’t needed to advertise as it has struggled to keep up with demand.
The flow-on effect of the scale down would significantly affect the local transport sector.
Mr Beresford said 400 to 500 tonnes of pellets a day were delivered from Macco Feeds to customers.
“Then there is cartage of the 120,000t of grain, straw and other products which are delivered to the mill each year,” he said.
“Two local transporters have already indicated that they will reduce their fleets and workforce if there is such a large reduction in work.
“It is not something that the country towns need right now, there are already empty shops in nearby Narrogin and people out of work.
“The majority of the grain and straw is purchased from local and surrounding farmers who will have to find another market which will not be easy as most of the grain is feed spec and the straw is a by-product which would otherwise be burnt.”
Macco Feeds produces a “hi-fibre fodder for the live export market” made up of cereal hay and straw, cereal grains such as lupins and barley with mineral additives tailored to suit the needs of exporters.
“Since issues with live exporters there will be a need to focus more on supplying the domestic market but competition will be tight among stock feeders,” Mr Beresford said.
“There was an under-supply of feed three months ago and now we are heading for a massive over-supply situation.
“If you take the live export market out of the picture there is an extra 180,000 to 200,000t of pellets a year in the system.”
He said the “astronomical hit” will be felt through to September (the end of the Middle East summer) when there will need to be a big decision made on the future direction of the industry.
He said a reduction to 50pc of current output will greatly effect Macco Feeds’ viability and sustainability.
For Bannister farmer Trevor Wessels, the impact of the suspension of Emanuel Exports export license was immediate.
Mr Wessels and his family had planned to start shearing 5000 wethers on Monday of this week with the view to sending them to the live export market, but as soon as news of the suspension came through he called the shearers and told them that they wouldn’t be needed.
Mr Wessels said he was lucky they had a reasonable start to the season and could hold onto the wethers for longer, but empathised with those farmers who had still not had a decent break and would be forced to quit sheep soon.
“We have decided to hold onto them until November and they can get a bit more wool on them,” he said.
“But there are others who may not be in a position where they have the feed we have to be able to do that.
“It is fortunate that wool prices are where they are otherwise the industry would be in even more trouble.”
Mr Wessels said while they had options to hold sheep on their property, it was other sectors of the industry that would suffer.
“Take our shearing team for example, they had a week’s shearing booked in and that is gone, so it will impact on their income,” he said.
“This is what politicians don’t realise, is that there are a lot more people that will be impacted by this than just farmers.”
Mr Wessels said he felt let down that there has been no clear support from government on the issue.
“It worries me as to where things will end up if we don’t have that government backing,” he said.
“The fact that it was such a sudden cut off is not good for anyone. That wouldn’t happen if it was a city-based industry.
“We learnt from the cattle ban (in 2011) what happens if you stop something overnight.”