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Quality assured lamb price gap to increase – WAAMCO

Terry Sim, November 9, 2021

WAAMCO’s leading North American brand – Pasture-raised without antibiotics, no added hormones, free range and humanely treated.

THE price gap between conventional and certified quality assured/audited ‘attribute’ lamb is expected to widen, according to WAAMCO International chief executive officer Coll MacRury.

After reporting a record $390 million consolidated turnover and $8.1 million profit at the co-operative’s recent annual general meeting, Mr MacRury said WAAMCO believed suppliers can be very optimistic about the current season.

“It is a long time since we have seen market forces working together so well.

“Livestock/processing/marketing – all performing highly – again shipping and logistics will be our major challenge.”

Mr MacRury said the company processed 1.75 million stock units in 2021/21 at Katanning and Goulburn, paying an average of $174.31/head, bonus included, and he believed a new record was possible this season, possibly up to $180.00/head.

WAAMCO international CEO Coll MacRury.

In 2003, WAMMCO joined another Australian and three New Zealand processors to form The Lamb Company to market grass-fed lamb and beef in the United States and Mr MacRury said it is this ‘Lamb Cooperative’ model that is driving WAAMCO’s revenue on the top-end cuts.

“Our investment and control in this market cannot be understated and will continue to deliver superior revenues.”

He said WAAMCO had a very strong North American program based on grass/pasture-fed and antibiotic-free ‘attribute’ lamb.

“We are seeing more and more demand from the top supermarkets in North America, and they are demanding it now.

“Consumers are very much buying with a health and animal welfare focus when buying proteins now,” he said.

“So although the gap between conventional and this attribute lamb in terms of price is not huge yet – the feeling is that it will be over the next five years.

“Feedlot lamb is fine as long as it complies with the anti-biotic free/pasture raised rules – and this is being done successfully by many feedlots now,” he said.

“The key is what you feed them when they are finished off in the feedlot.”

Mr MacRury said the market for conventional or mainstream lamb — the majority of WAAMCO’s production — is still very strong and will continue to be.

“The only difference is that to come under the “attribute requirements” for certain North American and United Kingdom supermarkets, lamb producers must be audited from farm gate to ensure certain welfare and feed requirements are adhered to, and no antibiotic additions have given ever in the lamb’s life.

“If they do have to help a lamb with antibiotics there has to be proof of isolation from the rest of the flock.”

Mr MacRury said there is no doubt that procedures like mulesing will be looked at more by markets into the future.

“There are even program from certain supermarkets that won’t buy lambs that are mulesed now – and that has been like that for many years.”

“It really depends on the market you want to supply. We focus on top-end lamb markets and that comes with an extra layer of requirements.”

Mr MacRury believed the UK/Australia Free Trade Agreement will be a good windfall for Australia.

“We are really starting to see some go forward in this market recently.

“This market had been very subdued for a few years, but now with the competition for protein aggressive around the world they have realised they have to lift their prices to compete,” he said.

Mr MacRury said with the new DEXA X-Ray unit in place at Katanning, the company will be assessing very seriously the introduction of robotic lamb cutting in the next year or two. He told shareholders the cooperative had been able control fixed and variable costs very successfully at Katanning, achieving record daily throughput during peak processing times.

“Our strategy of developing the new mutton boning room to work in conjunction with our lamb boning room meant we lifted daily boning room capabilities by more than 20 percent.

“This also allowed us to process at a higher volume of added value processing through the lamb room.”

Mr MacRury said the Goulburn plant processing numbers lifted significantly, with a 30pc lift in processing compared to the prior season.

In 2020/21, WAAMCO paid a pool bonus of $2 million, or 20c/kg for qualifying lambs and 10c/kg for mutton, bringing the total of bonuses for the past eight years to $22.85 million.

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