Executive Summary

The yabby Cherax destructor has long been harvested for pleasure and profit in NSW and has an aquaculture history of about 30 years. The introduction of a Class E extensive multi-site aquaculture permit in the State 1999 led to renewed interest in yabby growing on farm dams and heightened interest in the concept of a group of landowners or intensive yabby farmers working together, pooling resources, in a yabby processing and marketing venture in NSW. This in turn led to the commissioning of this study.

An analysis of the supply and marketing of yabbies in Australia indicates that the national aggregate aquaculture supply has been relatively steady at about 300 tonnes per annum

In addition to this, there is a highly variable harvest of yabbies from wild stocks (30 to about 80 tonnes per annum) mostly in NSW, each year. The wild product is sold into different markets and at lower price levels than the farmed produce.

Western Australia's yabby aquaculture industry is mostly based on multi-site semi-intensive aquaculture networks and provides about two thirds of each years national output. WA sells almost half of its output overseas as live purged yabbies with interstate and intrastate sales making up the balance of sales in about equal proportions

WA is regarded as the market leader by virtue of its high quality assurance of products as well as the more consistent supply it offers. A handful of yabby producer-marketing companies in the state account for a little more than half of the national turnover.

The NSW yabby farming industry is the nations second largest and consists mostly of a diversity of extensive and intensive enterprises with the focus on live yabbies and limited volumes of boiled yabbies and several other processed products

Most NSW operators undertake their own marketing to local and more distant intrastate customers - their export trade is very limited - but there are currently several grower-marketing networks developing around the Class E multi site permits.

The demand for farmed yabbies commonly outstrips the limited supply and the latent demand appears to be as much as five times the current level of about 300 tonnes per annum.

The opportunities for yabby marketers are very attractive because the supply of these tasty crustaceans is growing at a modest rate and they are still unknown and untried for many consumers and yet their price is only about half of that of equivalent sized large prawns. With a greater investment in promotion of yabbies than has been seen in past years the aggregate demand can be raised considerably.

Any group of yabby producers in almost all areas of NSW is well placed to take advantage of the market opportunities in Australia and overseas because of the mild climate, extensive transport links and strong infrastructure in the state.

Sydney is essentially underserviced as far as yabbies are concerned and NSW producers have the capability to become the market leaders in a short time.

Financial analyses on a model yabby cooperative in NSW indicated that breakeven fixed handling costs/charges at a turnover of 50 tonnes per annum level are $2.36 per kilo; packaging costs (styrene case and other materials) would also have to be paid for by the producer and the freight costs would be charged to the buyer.

However it is unlikely that such supply and sales level can be achieved by a new cooperative in NSW in less than a few years because a number of business challenges lie ahead. At low sales levels the fixed overhead costs of running a yabby cooperative become prohibitive and substantial losses would be incurred. At high levels of course the prospective business looks more attractive and can make a profit.

The forecast break even handling costs of $2.36 per kg at 50 tonnes pa throughput represents 15.7% of the estimated average selling price of NSW farmed yabbies. This is remarkably similar to the 14.5% charges sought by the Commercial Fishermen's Cooperative based at Newcastle, to market much smaller quantities of yabbies than 50 tonnes per annum. It is also similar to the 20% of selling price or $2-$ per kilogram seafood wholesaler's margin.

There are a number of alternatives to the full service cooperative model examined in the financial analyses. A staged development of a yabby cooperative, for example, starting with a half time manager and voluntary assistance by members progressing to full service from a full time staff may prove more attractive.

Yabby producers interested in forming a cooperative should examine the market forecasts and financial data in this report in the light of their own risk profile and financial and human resources and decide on the most appropriate way forward.

The decision to form a cooperative or indeed to work collaboratively in another legal entity such as a company is a personal as well as an economic one.

Regardless of the legal entity utilised to operate the business, the critical success factor is that there is enough commitment and trust amongst the group members to get sufficient quantity and high quality of product to be profitable.