WA Meat Marketing Co-operative reaches second highest profit of $44.10m

The WA Meat Marketing Co-operative generated a consolidated turnover of $430 million in the 2023-24 financial year with a net profit before tax of $44.10m, up $36m year-on-year. At the annual meeting on October 30 at the Katanning Regional Saleyards, WAMMCO chief executive Coll MacRury announced it was the second-largest profit in the co-operative’s history. “Both the Katanning and Goulburn (Southern Meats) plants performed exceptionally well under massive processing pressure,” he said. “The world lamb market for bulk frozen cuts was at its lowest ebb for much of the season due to world macroeconomic climate. “All saleable products associated with lamb, including meat and skins and the fifth quarter cuts, were at the lowest pricing levels we had seen for many years.” Mr MacRury said WAMMCO paid a pool bonus of $21.8m with $1.20/kg paid for qualifying lambs and 60c/kg for qualifying mutton. He said the two plants processed 2.3 million stock units for 2023-24, with both achieving record numbers. Mr MacRury said international lamb, mutton and associated product revenues had improved considerably compared to the previous season. “Our pricing always needs to be governed by international market returns at the time of setting schedules,” he said. “The world in general and the markets we operate in are much more volatile at the current time. “Southern Meats will continue to provide WAMMCO shareholders with excellent long-term returns.” Mr MacRury said the co-operative would continue processing large numbers of lambs in 2024-25 to support long-term commitment to offshore markets and WA lamb producers. “This will be at the expense of profitability at certain times of the year,” he said. “A few of our WA processing competitors are focused on mutton in favour of lamb, and this will put pressure back on producers if we enter a drought this summer. “Any significant profits will continue to be divided between our shareholders through rebates and plant upgrades to keep our operations at the leading edge of the industry.” Mr MacRury said major changes at Katanning would occur next year with scheduled project work. He said changes included a new lamb and mutton chain, new freezer variable rate technology system and an upgrade to the plant engine room to handle extra energy demands. Also planned will be the development of a two-megawatt solar farm, plus the continued accommodation uptake to house about 120 workers. Mr MacRury said the Goulburn plant would develop a new rendering plant and office block to allow for future extension of a freezer department. Newly appointed WAMMCO chairman Bill O’Keeffe acknowledged the previous chair, the late Craig Heggaton, who put in a “power of work” at the organisation and was a great contributor to the industry. “I regretfully acknowledge the recent death of Dr Heggaton, who joined the board in 2009 and was promoted to chair in 2015, our thoughts remain with his family,” he said. Mr O’Keefe said it had been a difficult 18 to 24 months in the industry, but speculated the challenges were “behind us” in terms of pricing and available processing capacity. “One of the main roles of the board is to balance the three pillars required for the resilience and successful longevity,” he said. “In an industry that is sometimes volatile, it is imperative that we continue to build a buffer to insulate us against inevitable periods of adverse trading events, urgent equipment replacements requirements and any other unforeseen events.” Mr O’Keeffe said WAMMCO aimed to have the ability to set aside appropriate funds for capital reinvestment to maintain quality and facilitate growth. “Where possible, the co-operative must distribute a responsible rebate,” he said. “Unlike private enterprise, WAMMCO has no majority owner so it’s always a source of both pleasure and pride to make continued returns to our shareholder members. “Management and the board took the view that irrespective of any mooted Federal Government spending within the sector we need to forge ahead and do what was required to increase capacity as quickly as possible.” Mr O’Keeffe said the WAMMCO team weren’t prepared to wait for government decisions and any funding opportunities that may be presented, but in the event of the appropriation of processor expansion funds, they would expect to be considered. “We acknowledge that procurement to increase utilised capacity will have its challenges particularly short term, but we are confident expansion will be a valuable tool for growers during busy times and strategic for the co-operative,” he said.