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Shortage to push up prices

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With lamb prices fetching more than 500c/kg nationally in 2010 and combined with WA’s big dry, many in the local industry are asking how high will prices go in 2011.

Recently, the State has witnessed a convoy of trucks loaded with local animals heading east, with concerns now mounting about lamb availability next winter and speculation about rising prices rife in the industry.

WAMMCO chief executive Coll MacRury said while it was too early to say just how high lamb prices could go; he was guessing between $5–$5.50/kg.

“The real problem will be the dollar; it all depends on it coming down,” Mr MacRury said.

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“With the dollar so high, there comes a point where processors can’t make any money. Because of the uncertainty of the dollar, it is hard to know where the pricing will be.”

Mr MacRury said WAMMCO was concerned about numbers for next year and processing was likely to be conducted in similar shifts.

“Last season, we ran a two to three day week where we processed what days we could,” he said.

While the idea to diversify into other livestock is still on the cards, WAMMCO will continue to focus on doing the best it can with what it has.

“It is hard to invest when we’re not sure what the numbers will be next year,” Mr MacRury said.

He said WAMMCO members would be feeding lambs over summer and were basing their ration costs on receiving $4.50–$4.60/kg heavy lamb prices.

Mr MacRury said the business would also try to feed “bits and pieces” in the feedlot it leased, but a lot depended on the dollar and global lamb prices.

“We will have a better understanding in April,” Mr MacRury said.

“A lot of lambs have gone east. We still don’t know how many are left to process next year. We are also unsure of what next year’s lambing percentages will be, and won’t know until August next year.”

Mr MacRury said lamb had become a high-priced protein and those who wanted it were prepared to pay.

“Lamb is a sought-after protein,” he said.

“The ones that stay in the industry will be in a good position. Many people are also realising that wool prices are on the way up.”

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