Steady market conditions in live cattle exports but uncertainty exists around Indonesian government intentions for breeder imports.

Key points:

• Vietnam’s beef prices are falling due to increased imports, with farmers facing challenges from low quality cattle and poor feed
• Indonesia’s demand for live cattle exports remains strong, with heightened competition for shipping space
• The Philippines has temporarily suspended beef imports from the UK due to concerns over mad cow disease, aiming to protect local cattle and public health

A new Australian exporter has entered the Indonesia dairy cattle space with HRM Livestock exporting a consignment of dairy cattle to Indonesia earlier this year, interestingly discharging at Tanjung Wangi, a port on the eastern end of the Java island, not traditionally known as an import location for Australian cattle.

No doubt they will be hoping to position themselves as a possible supplier if the anticipated demand for dairy cattle to Indonesia increases.

A major feedlot in Lampung Indonesia run by cattle importer PT Andini Agro Loka is reportedly in financial strife, reflecting the long-running effects of the many headwinds the Indonesian cattle feedlot industry has faced over the past few years. From what I have been told operations at the feedlot have stopped and the company is looking to lease the facilities. Despite being a well-established importer with an experienced team at the helm, the business has struggled to overcome the challenges presented by high competition from imported Indian buffalo meat and rising feed costs, despite the recent improved price for Australian feeder cattle.

The Australian Department of Agriculture, Fisheries and Forestry recently released the findings of its investigation in to the loss of 151 head of cattle, which were part of a Frontier consignment bound for Indonesia, finding that the cause was most likely botulism and that “mortalities were related to an existing animal health condition, and not related or caused by any failure of exporter processes and controls and not related or caused by the act of transit (vessel infrastructure, sailing conditions or on-board management)”.

AUSTRALIA: feeder steers Darwin $3.05, Townsville $2.75

The northern export trade is cruising in high gear with plenty of boats departing from Darwin, Broome and Townsville. The major market, Indonesia, is sitting steady. The northern livex feeder steer price has largely resisted the pull of other domestic cattle price indicators over the past six months, which have generally seen proportionately higher increases over the period.

INDONESIA: slaughter steers $4.60kg live weight (IDR 10,315 = $1 AUD)

The average daily price of beef per kilogram from August to September in markets across several provinces in Indonesia slightly decreased. Similarly, the price of broiler chicken as Indonesian main protein source is declining. The Indonesian Central Statistics Agency says this became the main contributor to deflation in August, which was recorded at 0.03 percent on a monthly basis.

Indonesia is aiming high with its latest moves in the cattle and dairy industry, positioning itself towards self-sufficiency in milk production. But is this goal achievable, given the country’s reliance on imports and tropical climate challenges? The government’s recent initiatives, spearheaded by President Joko Widodo’s establishment of the National Nutrition Agency, aim to address malnutrition while enhancing food and beverage standards across the nation. This body’s focus on improving nutrition, including increased milk consumption, is set to boost both the dairy and cattle sectors. But Indonesia’s well-known regulatory fragmentation raises questions about the agency’s ability to enforce the necessary standards. For the program to succeed, effective regulatory power must accompany the agency’s ambitions, or it risks becoming a symbolic gesture with minimal impact.

Prabowo Subianto’s administration has also set bold goals for food self-sufficiency by 2029, backed by a hefty government funding, which is intended to drive the food estate program, focusing on land development, irrigation, food banking, and microfinance support for farmers. Agriculture Minister Amran Sulaiman has underscored says meat production, including beef, goat, and chicken, is central to this strategy, with state-owned enterprises, such as PT Berdikari, partnering with technology leaders, such as PT Frisian Flag Indonesia.

In an effort to jump-start the domestic dairy sector, Indonesia’s Ministry of Agriculture announced its plans to import 1.5 million head of cattle — made up of breeder dairy cows and feeder cattle. Eighty percent of Indonesia’s milk is imported, and the country’s tropical climate hampers local dairy production. This move is accompanied by planned revisions to government regulations related to the importation of livestock and animal products to allow for imports from Brazil, despite its zone-based disease-free status. Brazil recently declared itself free from FMD without vaccines after many years spent eradicating the disease through a large-scale vaccination program and zone-based movement restrictions. Despite declaring itself free of the disease, it may take until mid-2025 for WOAH to recognise it as such. These regulatory revisions by the Indonesian government suggest they are eager to import from Brazil sooner rather than later.

While this plan includes the prospect of importing dairy cattle from Brazil, the choice has raised some eyebrows. Brazil’s tropical climate has led to success in dairy cattle farming, and officials believe this experience will translate well to Indonesia, where New Zealand breeds have struggled. But it remains to be seen whether Brazil’s success can be replicated in Indonesia, especially given Indonesia’s historically low dairy productivity, where local cows produce just 12-15 litres of milk per day compared with the 40-50 litres in European or Australian cows.

VIETNAM: slaughter steers $4.68kg live weight (VND 16,431 = $1 AUD)

Vietnam continues to witness a gradual decline in beef prices, largely due to a strong influx of cheaper imports from neighbouring countries, such as Thailand, Cambodia and Myanmar. The price of Australian cattle has seen a modest increase, rising by VND 1000 to 2000kg ($0.06 to $0.12 AUD), now trading at VND 76,000 to 78,000 per kg. ($4.62 to $4.75 AUD).

Small-scale farmers are under pressure, with traders pushing for further price reductions as the prolonged decline in beef prices continues. The farmers are struggling with poor-quality feed and inferior cattle breeds. Despite these challenges, the cross-border trade remains busy, which is helping to stabilise domestic beef prices, although smallholders continue to face difficulties in maintaining profitability .

PHILIPPINES: slaughter steers $3.30kg Live weight (P37.52 = $1 AUD)

The Australian dollar is stable against the Philippine peso. In wet markets and supermarkets the beef rump prices sit at about P420kg ($11.20 AUD) and P460kg ($12.30 AUD) respectively. Local cattle prices in Mindanao are still pegged between P130 to P145kg ($3.47 to $3.87 AUD) live weight, and the hot carcass meat price is approximately P320kg ($8.54 AUD).

Live pork prices are around P200 kg ($5.33 AUD), and pork carcass go for P280kg ($7.47 AUD). In wet markets, non-branded broiler chicken is priced at P190kg ($5.07 AUD), while in supermarkets, the Magnolia brand is priced at P225kg ($6.01 AUD).

On 6 June 2024, the Philippines implemented a temporary ban on the importation of live cattle and beef from the United Kingdom, following confirmed cases of bovine spongiform encephalopathy, commonly referred to as mad cow disease, in Scotland. This decision was made after the World Organisation for Animal Health issued a report confirming the presence of the disease. The suspension is aimed at preventing any risk of the disease spreading to the local cattle population and protecting public health.