WAMMCO premiums for 'supply'

28 Mar, 2002 07:00 PM

WAMMCO has offered WA lamb producers an ultimatum of sorts.

Support the co-op with a year-round supply of quality product or consider what WA lamb prices would be like without WAMMCO.

But the ultimatum was not all stick. There would be rewards.

WAMMCO chairman Dawson Bradford, in his WAFarmers conference address, said the Co-op would provide incentives to produce lamb required for the premium markets.

"We accept that at least in the short term, demand for livestock is going to exceed supply and the importance of WAMMCO may not be readily apparent," he said.

Mr Bradford said with most livestock sectors riding high it might also not seem necessary for producers to make a supply commitment.

"But the decisions you make in 2002 will be critical to the future structure of the marketing avenues remaining available to producers in the future," he said.

He said WAMMCO was unable to compete with Eastern Australian and New Zealand where processors paid up to $3.60 a kilogram.

However, Mr Bradford said the $2.80-$3kg WAMMCO could offer would be sustainable in the short to medium term, and that his aim was to ensure it was also sustainable in the long term.

However, price stability depended on supplying a consistent quality product for overseas customers year round.

The year-round supply was also needed to keep skilled workers.

WAMMCO has extended the Co-op's supply-share offer to June 2003, after which time the free-share door would be closed permanently.

The plan was that once producers were confirmed as regular or core suppliers they would qualify for performance-based rebates.

"Hopefully these active core members, together with groups such as the Prime Merino Lamb Alliance and other existing and yet to be formed producer alliances, will help us capitalise on opportunities presented to us," he said.

WAMMCO was looking at targeting more product at specialised US markets for heavier lean lamb and building reliability and consistency to established European markets.

"The consequences if we fail will be the permanent loss of high value markets and a reduction in demand for prime lamb," he said.

"Our biggest problems for at least the next 12 months are supply, spread of supply and consistency of supply and quality."

WAMMCO has been unable to issue shares due to a hold-up in amending legislation.

Concerns were expressed at the conference over the delay but Mr Bradford believed the Government was giving the issue urgent attention.


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