It’s a standoff.
In the old Wild West two parties would walk towards each other, each wondering who will draw first.
There’s no lives at stake in the current standoff at the Northern Rivers Livestock Exchange.
But there is plenty at stake.
One of the risks is the real possibility there will be no sales after July 1.
Richmond Valley Council has handed the agents who use the NRLX a challenging situation: accept the change in the way fees are charged to agents or miss out on access.
Four stock agents have responded with a standoff by refusing to sign new licences to use the NRLX.
The council owns the saleyards and has made changes in keeping with the significant improvements in throughput and facilities at the NRLX.
One change was to the charges for agents using the saleyard. It was proposed at the March council meeting and agreed to at the council meeting on Tuesday, June 20.
The new NRLX fees include a change to the Agent Business Usage fee from a fixed per head of cattle charge to 0.2% of gross revenue. This would be $2 for every $1000 of livestock sold. Council wants this to be paid by the agents from their revenue of $45–$55 from each $1000 (agent commissions vary from 4.5–5.5%).
Another change is opening up more licences at the NRLX.
Seven licences were up for grabs.
Agents could apply under an expression of interest.
Four local agents who applied and were offered a licence are now refusing to sign the agreement – because they disagree with the changes.
The licence offers came after a thorough process by an evaluation panel, council’s general manager Vaughan Macdonald said.
One agent from Lismore was refused a licence because they did not meet the standard, he said.
“There was interest from others but they need more time to get established in the business,” Mr Macdonald said.
“We’re now opening it up to the wider market, anyone interested in being an agent can contact us.”
It’s a cultural change, Mr Macdonald said, and all seven councillors are behind the changes.
“We won’t be backing down,” he said.
“At the 11th hour, they (agents) are holding the community to ransom.
“They are making huge amounts of money out of this.”
If the standoff continues, the agents will lose a heap of money, and so will the council if it can’t operate sales.
Gross revenue at the NRLX increased from $76million in 2017-2018 to $210million in 2021-2022.
This meant a jump in agent commissions from $3million to $10million last year, making a livestock selling agency at the NRLX a very profitable business.
Agents were paid a commission over the past six years of about $37million, “with $550,000 of that going to council,” Mr Macdonald said.
In a recent MLA saleyards survey, the NRLX came tenth in the country on a three-year average. This put it ahead of Tamworth which was the leading NSW saleyards for the previous year.
Mr Macdonald said it was critical the council made sure the NRLX was a competitive marketplace and he was clear that changes should not be passed on to vendors.
“Vendors are not in a position to challenge, as it can affect their position,” he said.
“Vendors have historically contributed most of the fees to the NRLX business and council has been implementing an incremental realignment of the cost sharing between vendors and agents from the previous model since the completion of the upgrade.”
NRLX operations manager Brad Willis said this year more than 113,000 head with a value of $139million had passed through the yards at an average of $1228 a head.
“The 2023-2024 NRLX Revenue Policy shows no change in core vendor sale fees and these fees will remain fixed to June 2026 – this means there have been no vendor sale fee changes in six years,” Mr Macdonald said.
He has not ruled out having other agents on contract if the four local agents continue to refuse to sign.
Mr Macdonald is also talking about council taking over the delivery side of the operation at the NRLX.
From the fall of the hammer, once the pen is sold, our livestock team will take over and lead the cattle to the weighbridge and transport, he said.
Traditionally the agents took care of this.
“They don’t do it well, so we will do it,” Mr Macdonald said.
Will the agents sign the EOI and agree to operate under the new licence agreement? If they don’t, how will the council respond?
Casino Auctioneers Association president Andrew Summerville said they would be releasing a media statement in “due course”.