Local lamb and mutton co-operative WAMMCO has praised its members for boosting productivity at a time of soaring prices in the livestock industry.

WAMMCO will pay about 1100 WA farm businesses a pool bonus close to last year’s record $3.6 million on top of the buoyant returns for their stock in 2014-15.

Chief executive Coll MacRury said the slight drop in the pool bonus was balanced by a 12 per cent increase in the price farmers were paid for lamb and a 36 per cent increase in mutton.

Export-focused WAMMCO has struggled to pass the higher prices on to its overseas customers and is forecasting a dip from the record profit of $19.6 million in 2013-14.

Plunging Chinese demand for hides and lower-value cuts also contributed to much tougher market conditions for the business, which operates abattoirs at Katanning and in Goulburn, NSW.

“Margins have been a lot tighter but, in saying that, we haven’t finalised our result yet,” Mr MacRury said. “It is going to be a good result given the market that we have had.

“In the past three years we will have paid out about $9 million in pool bonuses. That is outstanding for shareholders and we have paid a lot more up-front for stock this year.”

WAMMCO will shut down the Katanning abattoir later this month for a fortnight of maintenance work, which coincides with a mid-winter tightening of supply.

Premium lamb prices have gone from $5/kg early in May to about $5.70/kg and are tipped to continue rising into August.

Meat and Livestock Australia recently warned that the national flock was in serious decline after another year of high turn-off at high prices.

WAMMCO membership has dropped from about 2000 a few years ago as farmers exit the co-operative or the industry altogether, but Katanning has been able to maintain the processing of about one million sheep and lambs a year.

“The farmers who are in it seriously are becoming more and more productive,” Mr MacRury said. “They are getting more out of their land, growing more lambs per hectare. There is no doubt that is happening and their weights are improving as well. That is all very positive.”

WAMMCO expects to open a new $11.2 million freezer complex at Katanning early next year and a $5.8 million upgrade of the Goulburn abattoir is almost complete as it builds capacity.