Signals from the AGM

WAMMCO Chairman Dawson Bradford and CEO Coll MacRury warned of little lamb market improvement, but gave some positive signals to shareholder producers at the Cooperative’s 2011/12 AGM at Beverley on October 31.

Dawson said prompt action by the Board in January to change the administration and pricing structures of the cooperative as well as an initial trading bonus from Goulburn, had averted a more serious loss than the $885,000 recorded.

He said whereas there were no immediate signs for recovery in a global lamb market that was still awash with product, he remained  optimistic that WA producers and their cooperative would ultimately ‘win through.’

Key points made by Dawson and Coll included:

• Lower prices since January should begin to tempt consumers in our main markets to start buying lamb again. Last year’s high lamb prices forced them to buy cheaper alternatives. This will be essential to ease oversupply.
• WAMMCO will continue to pay WA shareholders a reasonable return by matching supply wherever possible to the best markets.
• WAMMCO buying do not discriminate against wool shedding breeds and the cooperative welcomes the good quality attributes these breeds bring to the industry.
• Oversupply from NZ and the Eastern States is expected to continue with many more lambs due in January/February. There have been rumours of heavy financial losses suffered by NZ processors since the collapse of global lamb prices.
• Competing lambs from the East next year will be heavy and overfat. WA’s lamb product is now superior.
• WAMMCO will use more value adding on heavier lambs to maximise returns for shareholders – and to assist its overseas retailer customers.
• Katanning is solidly booked through to February 2013 but has announced supply contracts with a minimum underwriting of $4 per kg for top lambs from April to June next year.
• WA producers must proceed with their mating programs. WAMMCO will be ready to meet new market demand from countries like Canada and India, as well as any resurgence in demand from existing markets.
• Global lamb production continues to decline in Europe, the US and other countries. There will be a further potential global shortage when current excess stocks are exhausted.
• WAMMCO’s processing capacity is currently 65 percent lamb, despite the greater profitability in mutton. The policy of maximising service and support to lamb producer shareholders will continue.
• The investment in Goulburn NSW will continue to show increasing benefits for WAMMCO.
• More shareholder producers should be planning with WAMMCO to process their lamb and mutton through the cooperative either direct, or through their agents. This would assist in operating Katanning on five day weeks and allow WAMMCO to plan ahead on maximising its markets. Currently only about 20 percent of shareholders deal exclusively with the cooperative.

Further details on the AGM and WAMMCO’s plans for the coming season are available from WAMMCO’s buyers, Peter Krupa, Wayne Radford and Rob Davidson.