$1.8m bonus for lamb and mutton producers

WA-based lamb and sheep meat co-operative WAMMCO has bought an abattoir in NSW and announced a record $1.8 million return to its producer members.

WAMMCO chairman Dawson Bradford said the return would start flowing to members almost immediately.

The distribution to about 2000 farmers is almost double the previous record of $1 million paid out in 2007 and 2008. It comes after WAMMCO posted a loss of $885,000 before tax in 2011-12. The record bonuses are based on an extra 40c/kg on lambs and 20c/kg on mutton, delivered on a weight and grade basis to the co-operative.

Mr Bradford said the price paid for the Goulburn abattoir was confidential, but revealed the investment had paid for itself over the past two years. WAMMCO reopened the Southern Meats facility in 2011 under lease with an option to buy.

"By leasing it we were able to trade our way into ownership," Mr Bradford said. "Bringing it online over the past two years has allowed us to double our business, our gross income and profitability."

WAMMCO employs about 350 people at Katanning, which has an almost identical processing capacity to Goulburn, and has a turnover of about $200 million a year.

The record return was built on exports of mutton in the first half of 2012-13 and strong sales of lamb to North America, the Middle East and China in the second half.

Mr Bradford said the distribution of bonuses had been brought forward from December because of the "rapidly escalating economic and seasonal difficulties confronting sheep and lamb producers in WA".