IN a sign of the jump in WA lamb prices, WAMMCO has reported it paid an average of $98.89 per lamb in 2009/2010.
And it seems these prices are set to continue with both international and domestic markets expected to expand, delivering even higher prices to producers.
At the recent WAMMCO AGM in Katanning, chief executive Coll MacRury spoke about the difficulties faced with the lack of sheep and lamb numbers nationally.
He said Eastern States' abattoirs have closed and competitors have downsized.
But providing there is a normal lambing percentage next year, Mr MacRury believes it will be a more positive season.
Across the 2009/2010 season, WAMMCO only operated at about 70 per cent loading, processing 670,000 head of sheep and lamb, down from 884,000 the year before.
The new boning room at the Katanning abattoir and the high Australian dollar also had an impact causing WAMMCO to only process a turnover of $87 million, compared to the $108m in 2008/2009.
"We realised in the first four months of last season that a profitable season was unlikely to be achieved," Mr MacRury said.
"There has been a major restructuring of capacity, but I still believe there is more to come.
"There are supply issues across the board."
However, producers welcomed the $98.89 per lamb WAMMCO paid last season, up from $85.02 the year before, due to the strong international and domestic markets.
But Mr MacRury said because of the low numbers, WAMMCO had to buy reasonable numbers out of saleyards for the first time in a long time.
"The Katanning plant runs at 4500 a day and you need that number to run the plant efficiently," he said.
"With the downturn and decline in the lambing percentages, we didn't have the numbers we needed so we had to go into the saleyards during the year."
However, export markets are predicted to grow with a strong global demand for lamb.
According to WAMMCO there has been gradual improvements in some international markets such as the European Union and US.
WAMMCO marketing manager Damien Giumelli said the Middle East was currently the biggest market for WAMMCO, with chilled lamb going into Saudi Arabia, UAE and Jordan every week and frozen products going into Iraq.
"The Middle East has had better capacity to pay for the high prices that we've needed to charge to overcome the effects of the Australian dollar," Mr Giumelli said.
He said the South East Asian market also had good potential for frozen products and the Australian domestic market had performed well over the past year and was predicted to grow in the future.
"Nationally, sales of lamb into the Australian market are continuing to grow despite the high price," he said.
"Australians continue to have a love affair for lamb."
However, there is currently restricted supply from key producing countries particularly New Zealand and Australia.
Mr Giumelli said the New Zealand flock had fallen by 17pc over the last three years, with 700,000 head of sheep and lamb being lost, and the Eastern States also experiencing harsh weather conditions.
"Due to the floods on the east coast, lambs have been delayed going to slaughter and more lambs will be carried through until after Christmas because there will be green feed around," he said.
"Therefore, there's a shortage of supply in the market leading up to Christmas which has allowed us to increase our sales and increase our prices, providing good opportunities for WAMMCO."