VICTORIA’S fourth largest cattle saleyard by throughput will close in June 2024, with escalating land taxes at its location on Melbourne’s eastern metropolitan fringe forcing the decision according to its owner, the privately-owned Victorian Livestock Exchange.

The Pakenham Victorian Livestock Exchange transacts about 100,000 store and prime cattle a year, drawn mainly from Gippsland properties to the east and from the Yarra Valley to the north and the Mornington Peninsula to the south.

Managing director Brian Paynter said exponential rises in land values and a recent doubling of rates and land taxes being charged meant the decision was unavoidable.

“It became a situation where we were just not able to pass those costs onto the vendors via the agents, so the decision was fairly clear,” he said.

“It took us by surprise, we didn’t realise until we opened up our most recent council rates notice that the rates had doubled and land tax was going to more than triple, so we didn’t expect that to be the case.

“We were faced with the option of perhaps playing it out for another two or three years but it is just simply not viable, the land values were going to increase exponentially and quickly, we just couldn’t afford to hang onto it for any length of time.”

He said it was fairly evident over the past 10 years that urbanisation was becoming an increasing issue at Pakenham.

“We didn’t know when it would catch up with us but it certainly did in this new financial year.

“Our budget and our yard dues were thrown completely out of kilter, so the decision was fairly clear at the end.”

Innovation-leader

When it opened in February 1999 the Pakenham Victorian Livestock Exchange was the first privately owned, fully-roofed, soft-floored, multi-agent, modern livestock exchange in Australia. It provided the template for innovations that have shaped new saleyard developments across the country since.

The Pakenham facility replaced the Dandenong saleyards closer to Melbourne which had operated for about 20 years, which in 1987 replaced the 130-year-old Newmarket Saleyards in the inner-city suburb of Flemington.

Both were ultimately squeezed out by expanding urban development. While it was always likely that Pakehnam’s location would eventually see the VLE facility eventually fall victim to a similar fate, yesterday’s announcement the facility will close in June 2024 caught many by surprise.

Dave Setchers, livestock manager with Alex Scott & Co, Pakenham, one of the region’s longest serving private agencies, said agents thought the facility would have around 10 years left, and had been told they would be given at least two years notice before a closure was imminent.

“So to be informed yesterday that it will close in a little over six months, it was a bit of a shock.”

When the Dandenong Saleyards closed the local industry was very grateful to VLE for building a state-of-the-art facility at Pakenham, he said.

“I remember saying to myself – ‘we’ll be right here for 50 years, we’ll never get built out’.

“But you have got to navigate your way through traffic to get into the place now, so it has certainly seen a big change, the world has caught up with it.”

Mr Setchers said the loss of the facility will displace a lot of cattle in the area.

“There is a certainly a fair bit of disappointment, we’re just working through ringing everyone.

“Clients I have spoken to certainly north west of Melbourne are devastated, because it is such a great facility to sell cattle and display cattle, and just seems a real waste to knock it down.

“But I supposed that is progress, it is a privately owned saleyards, it is shareholders and dividends and people who want to see a return.”

Future of the site

VLE managing director Brian Paynter told Beef Central plans for the future of the site were still being discussed.

“The last sale will be in June 2024 and from there on we will have undertaken some marketing for the site through real estate agents and could well have a settlement date sometime thereafter.

“We don’t really know, we genuinely haven’t had any discussions with any real estate agents regarding development of the site, values, marketing.”

He said some of the materials from Pakenham will be used to help upgrade the VLE’s Leongatha Livestock Exchange at Koonwarra about an hour to the east.

He said it is VLE’s hope that many of the cattle sold through Pakenham will be moved across to Leongatha.

“We will be working with Pakenham agents to assist in moving them across to Leongatha. That is why we’re committed to developing and spending even more money at Leongatha, to build a new truck wash and new areas to hold cattle, and we will look at sale days.”

Dave Setchers predicted some cattle will move across to Leongatha while others may be redirected back to Yea or Kyneton, but transport costs could be an issue.

“There is obviously other platforms we can sell cattle, we will to try to keep the costs down for clients,” he said.

He predicted it will also force more cattle to be sold direct rather than through physical yards. “Which is not ideal, the auction system is a great thing and it certainly sets the hook price, and we don’t want to see everything go that way, but it is certainly going to have to happen.”

Alternative facilities?

A private agent-led proposal was approved by the Baw Baw Council to develop a new saleyard at Longwarry half an hour east of Pakenham in 2020. While the plan was disrupted by the COVID pandemic, it may gain renewed momentum following confirmation the Pakenham centre will close next June.

Beef Central also approached another major saleyard owner and operator, Regional Livestock Exchange (RLX), to ask if it has any plans for investment in the region, and received the following response:

“RLX recognises the closure of local livestock sale yards can be challenging for agents, service providers, vendors, buyers and the wider community.”

“While declining to comment on the closure of the Pakenham facility specifically, RLX noted that it remains committed to developing regionally significant, modern livestock facilities within strategic locations, chosen for stock numbers, transport efficiency and long-term sustainability to improve the services offered and benefit surrounding regional communities.”