Abattoir closure affects pastoralists

In late February, the Kimberley Meat Company (KMC), about 100 kilometres east of Broome, its parent company Yeeda Pastoral and several subsidiaries went into voluntary administration, over significant unpaid debts.

Kimberley and Pilbara pastoralists have since been forced to truck cattle thousands of kilometres across outback roads to the nearest abattoir in southern WA.

Rob Jowett owns Warrawagine Cattle Company, which incorporates Warrawagine and Wallal Downs stations, in the Pilbara.

Mr Jowett runs about 30,000 Droughtmaster cattle across both stations, with 75 per cent sent to live export and 25pc to processing.

When KMC was operating, he would sell anywhere up to 1500-2000-head of cattle into the processing facility from Warrawagine Cattle Company each year.

With it now being mothballed, he has no other option, but to send cattle more than 2000km to Perth.

This is compared to about 700km and 400km from Warrawagine and Wallal Downs stations to KMC respectively.

"KMC would take a lot of cattle that were out of spec for the live export trade, including old bulls, fat and store cows and culls," Mr Jowett said.

"It is usually steers or mickey bulls, about 350-450kg liveweight, that qualify for the standard required to be put on a boat.

"The problem industry now has is, what do we do with all of these out of spec cattle?"

With the current low cattle prices, Mr Jowett said transporting livestock south was costly.

He said this was compounded by freight costs and shrinkage loss for cattle transported from the Kimberley to Perth.

"It is a pretty negative return that you receive, but you have to do it because there are no other options," Mr Jowett said.

"As you progress your muster you have all sorts of aged cattle coming through, including empty cows not in calf.

"They have to be moved on because you have younger cattle on the ground coming through the system.

"That's the challenge everyone has in the meantime."

Mr Jowett estimated shrinkage to be anywhere up to 10-15pc of liveweight.

He said this affected the bottom line, with prices of $1.60 per kilogram quoted by livestock agents for fat cows landing in Perth.

"What they won't take on the boats has to be trucked to Perth or beyond - it'd probably cost you $150/head in freight to get them there.

"I hope someone picks KMC up.

"When you look back 40-50 years ago, the Top End was pretty well placed, with an abattoir in Derby, Wyndham, Broome and Darwin."

The KMC plant was built in September 2016, as the brainchild of Yeeda.

It was forced to close in 2021, amid record high cattle prices, supply shortages, seasonally low beef trim prices in the United States and increased scrutiny of the live export industry.

The abattoir reopened in April 2022, with plans of a $35 million expansion revealed several months later.

However all proposed capital works and expenditure for the project were reprioritised, after the Kimberley floods hit in January 2023.

Kimberley Pilbara Cattlemen's Association chief executive officer, Bron Christensen, said the closure of KMC had removed a fair portion from the northern WA cattle market.

Ms Christensen said without a local abattoir, pastoralists were also without a baseline or price that southern processors needed to meet or exceed to attract cattle.

She said previously the baseline was what KMC paid plus transport.

Separately, Ms Christensen said there were cattle, which were not suitable for processing or transportation down south, or to live export.

"There is a certain percentage, probably about 10pc of the herd, that isn't suitable for either market," she said.

"They are currently sitting in the paddock, waiting to see what happens with KMC.

"Holding onto them generates a cost in itself."

Ms Christensen said pastoralists were holding out, but in the meantime fodder had to be purchased to keep cattle going until they could be turned off or a new local market opened.

"I'm not sure what that tipping point will be in terms of profitability, but at this stage most pastoralists are holding on and hoping there will be a quick resolution to it," she said.

"Last time it shut down prices were too high, so when prices are high people are pretty happy to send their cattle wherever.

"You can afford to sit on them and the cattle you do sell subsidise those cattle that are still in the paddock.

"But when you have prices that are fairly average, you don't have the extra padding and it will start to hurt."

In a statement to Farm Weekly, voluntary administrators KordaMentha provided an update on the sale process for Yeeda Pastoral Company and Colourstone abattoir, owned by its subsidiary KMC.

David Osborne, Richard Tucker and Tony Miskiewicz, of KordaMentha, commenced the process, shortly after being appointed as joint voluntary administrators.

The administrators have since reported significant interest from potential buyers of the KMC.

"The sale process is well advanced - there has been a lot of buyer interest and parties are working towards bids due Wednesday, June 19," Mr Osborne said.

"There has been significant industry interest to see the abattoir recommence operations.

"It is a critical piece of infrastructure for northern Australia pastoralists and beef processing.

"We are working with State and Federal departments, and the key stakeholders to the abattoir who have supported the Administrators through the process towards a sale outcome."

Mr Osborne said the administrators continued to preserve the abattoir on a care and maintenance basis through the administration process.