Western Australian livestock vendors to pay more in Muchea Livestock Centre fees.

New charges will be introduced on Thursday, February 16, and WA livestock producers can expect to pay up to 10 times more for National Livestock Identification System (NLIS) tagging, weighing and disposal of mature-aged bulls.

It may sound steep, but Western Australian Meat Authority (WAMIA) chairwoman and Mid West livestock producer Sally O'Brien said the changes weren't introduced by the board as a "money grab" or simply "for the sake of it".

In the authority's 2021-22 annual report, a full year loss of $1,951,784 was reported against a budgeted loss of $960,844.

Earnings before interest, tax, depreciation and amortisation was a loss of $809.753 against a budget of $201,016.

Speaking to Farm Weekly last Friday, Ms O'Brien said operating at such a loss was not sustainable for saleyard operators, livestock agents or farmers at Muchea.

She said trying to run a commercial business under government regulation was challenging and - despite the increases - WAMIA would not be at 100pc cost recovery.

"(The authority) have been losing a lot of money, it is not a sustainable position and it is eroding the capital reserves for development of the Muchea land buffer and precinct.

"There has been an enormous amount of work done to get to where we are and to only increase the fees where we have.

"It is not one simple factor, there are a huge number of factors that have gone into this.

"We should also note, WAMIA is a flat fee for service charge as defined by the WA Meat Industry Act 1976.

"So while producers - and by default agents (pro-rata percentage fee) - experienced record prices in recent times, we have been at a flat rate and unable to participate in the market highs."

According to Ms O'Brien, WAMIA's board and senior management team have continued exploring options to control costs and generate alternative revenue streams.

She said the financial performance and how to improve it had been the most significant focus for an extended period of time.

WAMIA's biggest non-statutory fee hikes 2022/23

In saying that, the million-dollar question Muchea Livestock Centre vendors would be asking is how did WAMIA spend more money than it budgeted for in the last financial year?

A number of contributing factors were outlined in the 2021-22 annual report including reduced throughput, increased salary, wages, repairs and maintenance costs.

"Obviously a loss like this is very disappointing for the board and government alike and requires action to not repeat," Ms O'Brien said.

Crunching the numbers in cattle and sheep, the biggest increases were seen in weighing and NLIS tagging of mature aged bulls over 700kg - up 1036pc and 150pc respectively - and standard cattle - up 809pc and 141pc respectively.

Meanwhile, disposal charges were up in cattle by 41pc and sheep at 138pc .

Auction facility fees went from $5.36 per head to $7/head or 31pc and non-auctioned cattle were up 31pc from $1.17 to $1.53/head.

Remaining fee increases ranged anywhere from five percent to about 30pc.

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Revised fees were calculated by WAMIA's senior management team, and approved by the board, after an in-depth analysis of what it costs to put an animal through the saleyards.

"This goes to explain why some of the fees have gone up by greater than Consumer Price Index (CPI)," Ms O'Brien said.

"Areas such as NLIS tagging, weighing and disposal fees are costing us the most money.

"WAMIA is no different to any other business, inflation and cost of inputs has increased sharply in the past 18 months."

In WA it is a legal requirement for all cattle to be identified with an approved NLIS electronic device.

However, according to Ms O'Brien cattle occasionally arrive at the saleyards without electronic identification and have to be individually drafted out, head bailed and tagged by WAMIA employees.

She said the price rise reflected the cost to complete the tagging.

"Yes, it is a lot of money, but we don't want WAMIA staff dealing with cranky bulls, which are out of their territory and in an unfamiliar place with unfamiliar people," Ms O'Brien said.

"One man doesn't do the job, several do and there are a lot of precautions you have to take, so people and animals don't get hurt.

"Bulls and cattle should not be sent to the saleyards without NLIS tagging - this is the producer's responsibility."

A million dollar question

How was more money spent than budgeted for?

According to Western Australian Meat Industry Authority chairwoman Sally O'Brien, many factors contributed to the full-year loss, including:

At the completion of the cost analysis process, WAMIA canvassed saleyards across Australia to benchmark against their charges.

What sets the Muchea Livestock Centre apart from the rest, was the fact it is the only full-government owned and operated saleyard in the country.

"We certainly won't be the most expensive or the cheapest - we will sit in the middle of the road," Ms O'Brien said.

"Not that that is a reason for changing the fees, but we were concerned about the potential impact and interested to see other saleyard charges."

When asked whether there were concerns the selling centre would become uncompetitive Ms O'Brien said, "livestock producers have many options to market their livestock, different selling environments and market conditions impact this decision".

"Inter-faced saleyard auctions provide the opportunity to attain the greatest competition on livestock," she said.

Ms O'Brien said the board and senior management team were working "very hard" to ensure costs were not blown out further if less animals were put through the facility.

Currently, WAMIA is undertaking a review of the WA Meat Industry Act 1976.

Ms O'Brien said there was a huge amount of work being done by the board to start what would be a lengthy and defined process.

The review is set to examine the entire act, its functions and their relevance in the current livestock landscape.

This would involve extensive public and industry consultation to determine the future role of WAMIA.

The process is anticipated to take at least two years, driven by the board with external assistance from skilled people in the area.

Ms O'Brien will step down from her role as chairwoman at the end of this month, after dedicating 12 years to the authority, due to business and family commitments.

Elders' WA State livestock and wool manager Dean Hubbard said he was working on a fee comparison between the State's current livestock auction selling centres.

Mr Hubbard plans to have an informed comparison on what Elders' clients were paying to offer cattle and sheep for sale by auction through each facility.

He said comparative figures could then be discussed with WAMIA to enable a constructive conversation around the proposed non-statutory fee increases, which may be cost prohibitive to Elders' and its clients in the current proposed form.

"After seeing the new suggested non-stat fees it was apparent there were some extremely large increases in some fees," Mr Hubbard said.

"I want to review and compare apples with apples and be able to see that what WAMIA is suggesting is comparable with other facilities.

"If they are not comparable then I believe there would be every likelihood that rather than increasing Muchea throughput, there could quite well be the reverse.

"My thoughts are, WAMIA may well do better to consider the possibility of raising current levels of service and improving efficiencies within current operations, rather than taking a more short-term view that will result with the suggested fee hikes."

Nutrien Livestock State manager Leon Giglia said his company was working with WAMIA on some of the commercial aspects for a positive outcome for livestock producers using the centre.