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Beef Report

Beef Report




Slaughter steer prices remained weak through a combination of slow demand and continued high numbers of overfat cattle attracting discounts. Fortunately, the level of imports appears to have slowed significantly, so the backlog of excessively heavy cattle should be cleared. The average live cattle import numbers for the past 12 months has been about 55,000 per month for Indonesia and 24,500 for Vietnam.

November and December 2019 imports were close to these averages, while in January 2020 the numbers changed drastically to 30,500 head for Indonesia and 42,800 for Vietnam. Viruses are affecting the economy in Indonesia in a variety of ways with the main one still being the coronavirus, leading to a reduction in tourism in Bali. Chinese tourists were the largest single group going to Bali at 30 percent with this number now zero since flights from China were banned over a month ago.

Many hotels are empty with airlines, retail and restaurants also hard hit. At the same time African swine fever (ASF) has devastated the pig industry in north Sumatra, while an undiagnosed disease continues to kill large numbers of pigs in Bali. So many pigs have died that many of the bodies have been dumped into rivers and been washed out to sea during monsoon rains. Some bloated bodies have even landed back on the tourist beaches at Kuta and Seminyak – not a good look at a time when Bali tourism needs all the help it can get.

Another odd side effect of the coronavirus is that onions have disappeared from the shelves of most shops across Indonesia. When I asked the traders in the wet market they explained that the price for what they call “Bombay onions”, which is what we know as the common onion in Australia, have gone up in price from about $2kg to $10kg in three or four weeks. As a result, most retailers don’t even bother to stock them.

My advice is that these onions are imported from China. At the same time spices, such as ginger and turmeric, are in great demand and going up in price as they are regarded as good natural agents to protect against respiratory viruses. The Indonesian government announced the opening of import permits for Indian buffalo meat of 100,000 tons through Bulog, the state-owned logistics company.

Bulog advised that at the moment their remaining stocks are down to around 1000 tons, although this does not take into account what might still be in commercial cold stores. Twenty five thousand tons will be imported as quickly as possible to ensure buffalo beef supplies are adequate for Ramadan and Lebaran festivals.

Considering the slow process of permit issuing and the subsequent purchase process and ocean freight, this delivery is in danger of arriving late for the party if everything doesn’t run quickly and without any hitches. Permits for Australian fresh and frozen product have continued in 2020 without interruption with plenty of stock on hand and new imports flowing well through the supply chains. If you check the OIE website for foot and mouth disease (FMD) status around the world, India is now listed as having an “endorsed official control program”. India is infected with FMD with no areas certified as “free with vaccination” as there are in Brazil. Fortunately, FMD is a virus disease that is quite difficult to spread through processed frozen beef that has been deboned and deglanded, so the risk of Indonesia developing FMD from imported Indian buffalo is small.

What is not obvious is why import permits are being opened for Indian buffalo beef, which is known to be infected when real cattle beef could easily be sourced from Brazil with its status of “free with vaccination”, a much safer option in terms of risk of disease transmission and a much better quality product. The price differential in the retail market indicates that Brazilian beef is only around 10-15 percent more expensive than Indian buffalo. I know if I was given the option of paying 15 percent more for a dramatically lower risk of introducing FMD virus to Indonesia with a better-quality product, I would have no hesitation of voting for the Brazilian option every time.

My advice is that no new permits have been issued as yet for Brazilian beef for the calendar year 2020. Darwin feeder steer prices have shot up as expected with the arrival of quite good monsoon rains during February. As at the end of the month the indicator rate for steers landed Darwin was around $3.80, up about 16 percent on January.


Domestic beef prices remained steady even after the surge of importation from about 28,000 head in December to 42,800 in January. There appears to be an easing of the ASF situation with the beginning of a slow recovery from the worst of the outbreak. Pork prices have reduced by about 10-15 percent, although how much is due to the reduced demand after Tet and how much is a reflection in improved pork supplies is not clear.

The government of Vietnam continued its activities to improve protein supplies by licensing 460 new meat product suppliers and 210 seafood suppliers from the USA during February. CHINA SLAUGHTER CATTLE $7.11KG (RMB 4.64 = AUD$) Slaughter cattle prices in February were Y33 per kg live weight, the same as in January, with the large jump in the AUD rate above due to the weakening of the AUD$.

This is the first time the rate has broken through the $7 barrier since this report commenced in 2014. But the real story of course is the coronavirus, which is having such massive and surprising effects worldwide. Who would have guessed that a new human virus in China would result in the disappearance of onions from the markets in Indonesia?

Wuhan is a major manufacturing centre supplying essential parts for global manufacturing enterprises. The resulting shortages in parts is now leading to the shutdown of factories around the world that can’t continue without these critical components. My agent in Shanghai says they have only just been able to go back to work for the first time after several weeks of isolation at home.

The only thing that I am confident about is that we are not being told the truth about the figures of this epidemic, so it is simply not possible to predict how it might play out. If what we are told represents a significant under-reporting of the facts, then we are probably in for a longer and more severe impact on human and economic health across the world. TQ


Ross Ainsworth’s blog aims to inform the reader about the beef industry in South-East Asia with particular reference to the live export trade from Australia. Beef consumers in Asia will, in due course, be the biggest single customer group for Australia. Therefore, it’s essential that the Australian industry has a good understanding of this market maximise its potential. Finding information in foreign countries is a difficult process for individuals in Australia to achieve. Ross’s experience gives him insights that Australian producers and other industry stake holders can’t easily obtain.