STRONG international demand for red meat has seen WAMMCO post a $20 million record profit result for the fiscal year.
The pre-tax profit result came from a record consolidated turnover of $380m and enabled the co-operative to pay a record pool bonus of $4.3m – 50 cents a kilogram for qualifying lambs and 25c/kg for qualifying mutton.
WAMMCO processed more than two million stock units for 2017/18, split between its Katanning and Goulburn, New South Wales, plants.
WAMMCO chief executive Coll MacRury said the Katanning and Goulburn plants had strong livestock throughputs last season.
“Our workforce enjoyed strong work cycles with large amounts of overtime worked,” Mr MacRuray said.
He said WAMMCO would be focused on continuing to drive and develop its key assets in the Katanning and Goulburn plants.
“We can’t sit on our laurels, there is always room for improvement in both plants,” he said.
“We are working with a company called Integra to install a new water recycling unit at Katanning.
“This will recycle 20 per cent of our non-potable water usage.
“We have also entered a term sheet arrangement with Re Nu Energy at Katanning for the development of biogas/solar installation at the plant over the next two years.
“This will provide us with potentially 85-90pc of our energy, because we will combine it with solar, and is another example of taking control of our input costs.”
In order to drive more efficiency, Mr MacRury said they would be proposing to split the value-added boning section into two specialised rooms in Katanning.
“Currently we are trying to process mutton through our lamb processing room and we need to split them at boning stage to get better efficiencies through the plant,” he said.
“This will enable us to put 100pc of lamb through one room every day rather than having to stop and swap to do the mutton, which consumes time each day.
“The installation of a new DEXA X-ray unit in September 2019 is exciting and will give producers more in-depth information about their stock and allow the company to move towards robotic cutting in the future.”
Mr MacRury said the investment the co-op made into the North American market has been a great decision.
“It probably didn’t gain the traction early on that it could have, but now we are seeing some good returns from that investment,” he said.
“The reason we can have rebates that we have are largely down to the ability we have to extract superior revenue from our investment in Canada and the US.
“Our three value added processing plants and marketing infrastructure are producing superior value-added returns.
“Attribute marketing is going to be where best lamb returns are captured in the years ahead.
“Antibiotic free, grassfed and pasture fed lamb is going to be in high demand in North America and naturally raised healthy protein is the future for protein sales in the best paying markets and lamb has a great advantage.”
In addition to the good gains WAMMCO is making in the North American market, Mr MacRury said the Middle East and China are still very important destinations for the co-op and vital going forward.
Mr MacRury said international lamb and mutton prices should remain relatively strong throughout the season.
“Livestock prices will remain firm based on the strong international ovine prices,” he said.
“Seasonal challenges will be significant especially on the east coast.
“We will be forced to buy a lot of stock out of Victoria this season to send to the Goulburn plant and livestock prices are historically high due to the drought conditions in New South Wales.”
From a processing point of view, Mr MacRury said new technologies would always be front of mind.
“Our market development and ownership model in North America is driving a lot of our revenue, particularly the top end cuts,” he said.
“This market will continue to deliver superior revenue over other options.
“We will also be working hard to drive better revenue from our mid-range cuts through new market opportunities and the technologies we are installing.”