106th Edition : September 2022.
· Indonesian Foot & Mouth Disease (FMD) vaccination program now stalling in many areas due to shortage of logistics and operational funding.
· FMD risk to Australia continues to recede as Bali is getting priority for vaccine delivery.
Indonesia : Slaughter Steers AUD $5.20/kg live weight (Rp10,000 = $1AUD)
Slaughter cattle price volatility appears to be reducing with the expanding FMD vaccination program and elevated biosecurity measures reducing the numbers of emergency slaughter cattle in areas where the disease was previously out of control. Despite this improvement in disease management, consumer demand for fresh beef is weak. I have set the indicator rate for this month down a little to Rp52,000 per kg live weight with a range from Rp51k in Lampung to as high as Rp55k per kg for the very best yielding steers in West Java. While soft consumer demand is the result of a wide range of factors, the rising cost of both food and energy in Indonesia are probably the most important factors. During the last week of the month the federal government increased the price of both petrol and cooking gas. These increases will have a major impact throughout all goods and services supply chains leading to even higher prices in the future.
See below the national FMD statistics from the government’s web site as at the 30th of September. (https://siagapmk.crisis-center.id/)
3.3 million total vaccinations delivered is encouraging but there is a very long way to go to deliver the first two doses to all susceptible stock. As a very rough estimate there are about 14 million cattle, 19 million goats, 18 million sheep and 9 million pigs in Indonesia. They all need 2 injections 21 days apart or a total of 60 million head x 2 shots as well as a 6 month booster which adds up to about 180 million doses of vaccine required to fully vaccinate the all susceptible animals and have any chance of bringing the progress of FMD under control. For the moment the idea of eradication is not even a consideration.
The table below shows the different classes of stock vaccinated 30th September.
The data below is for Bali at the 30th of September. It is clear from these figures that the vaccination program in Bali is being prioritised over the rest of the country.
Note the Bali species breakdown below showing a strong start to vaccinating their pigs during September.
Claims that there are no new cases in Bali are simply a reflection of government policy that wishes to demonstrate to the G20 international visitors as well as the rising numbers of tourists that FMD is not a problem when visiting Bali. There certainly are cases in Bali but they are not being reported. What also appears to be the case is that the disease is quite mild in Bali cattle (Bos javanicus). Only bulls are capable of exceeding 400kg live weight and their top weight rarely exceeds 450kg. When infected, their mouth lesions appear to be mild while their low body weight means that separation of the claws is rare so recovery tends to be uneventful and the need for emergency slaughter is uncommon.
17 Flights daily from Bali to Australia mid-September. And slowly increasing.
I found this small herd of about 20 Bali cattle directly opposite the Brazilian Aussie BBQ in Seminyak, a very popular restaurant for meat loving tourists.
As mentioned last month, vaccine supplies are now flowing at a rate which is much faster than the capacity of the government to delivery these vaccines into stock. This has created a new blockage in the system as there is inadequate funding and other resources to continue the vaccine delivery at a speed that will halt the spread of disease. Vaccine delivery is the role of regional governments but the funding for this process has not been provided by the central government at a level to allow an optimal delivery rate. Australia and other governments and NGO’s have assisted with funding vaccine supplies and training but the large sums of cash required for labour, logistics and consumables such as 10s of millions of syringes, needles and PPE is lacking. These funds can only come from the federal government budget but must be managed and utilized by the regional governments. This has always been a serious dilemma with delivery of federal programs of all types across Indonesia.
Still no scientific confirmation of the original source of the FMD outbreak.
Indian Buffalo Meat (IBM).
During September I visited Johor Bahru in Malaysia where I checked the prices of their IBM. The product in the photograph below was for sale in the Lotus Supermarket in the KSL mall in central JB. The price was Rm14.99 for 900 grams. Using an exchange rate of $1AUD to 2.98 Malaysian Ringgit this translates to AUD$5.59 per kg.
The September price for IBM in Jakarta was Rp 109,900. Using this month’s exchange rate of Rp10,000 to $1 AUD this translates to AUD$10.99 per kg which is close to double the price in Malaysia.
My agent was only able to find IBM available through online wholesale outlets in Vietnam. It does not appear to be a commonly sold retail product. The product is offered as 20kg lots with the online price of Dong 119,000 per kg. This converts to AUD$7.58 using the Dong conversion rate of 15,700 to $1AUD
Indonesia has imported 70,000 tons of IBM during calendar year to date. Given these huge volumes of imported product why do Indonesian consumers have to pay double the price for IBM when compared to Malaysia and 45% higher than in Vietnam?
Frozen IBM in Lotte Mart supermarket, South Jakarta.
900 gram Frozen IBM pack at the Lotus supermarket in Johor Bahru, Malaysia.
Information regarding Lumpy Skin Disease (LSD) continues to be extremely limited. There is an official report of two cases in Central Java in September but I expect these will be false positives as the disease just doesn’t work that way. There are either no cases or lots of them as insects are beyond the control of the government and industry. The problem is that LSD has such a low priority compared to FMD that very few resources are being directed towards accurately monitoring its real progress so official reporting is likely to be extremely unreliable. At the end of September there were rumours of new cases observed in Lampung in Southern Sumatra but these have not been officially confirmed as of the first week of October. Given that the monsoon season is about to begin, I expect that we will get confirmation of cases in the next few months in Lampung and then moving eastwards through Java. LSD in Bali by the end of this coming monsoon is a real possibility. Some vaccine has been imported but not nearly enough if the predicted rapid spread begins in the next month or two.
Darwin feeder steer prices have continued to rise with the rate at the end of September set at around $4.70 more than 10% up from the end of August. Fortunately for importers, the Aussie $ has weakened by around 8% against the Rupiah.
Only 9,462 head left Darwin for Indonesia during September, one of the lowest figures for a very long time. Things are already looking up with 4 ships loading for Indonesia in the first week of October. These vessels will export more feeders in one week than in the previous month.
Vaccination reports have provided an accurate figure for imported cattle in feedlots in Indonesia with a figure of 96,000 head quoted as vaccinated in late September.
With high prices and weak retail demand I do not expect that export numbers will increase as much as I had earlier predicted. From October onwards, feeder cattle prices ex Darwin usually continue to rise by a further 10% or more during the peak of the monsoon season and stay at that high level until the following April/May when northern mustering starts once again.
Vietnam : Slaughter Steers AUD $5.48 / kg (VND15,700 to $1AUD)
Slaughter cattle prices have declined slightly this month, the first downwards movement in quite some time. The indicator rate for September is Dong 86,000 per kg live weight. The AUD price above has increased because the Dong has strengthened considerably against the Aussie. While high prices for Aussie slaughter cattle are leading to weak demand for live exports the general Vietnamese economy is showing a strong recovery with GDP growth in the 3rd quarter of 13.7%. Exports have been growing strongly while personal consumption has also been increasing. For the first 9 months of this year, Vietnams GDP increased 8.83% year on year, the highest growth rate since 2011. Large numbers of industries are moving their manufacturing base out of China and into Vietnam where conditions for business are much more favourable.
Buffalo beef in Vietnam.
This product is only available online in 20kg lots @ AUD$7.58 per kg.
Vietnam also has a tradition of consuming their own fresh buffalo meat from locally slaughtered stock with this fresh product selling for much higher rates at around Dong 250 to 320,000 per kg.
China : Slaughter Cattle AUD $7.66 / kg live weight (RMB 4.70 = 1AUD$)
Slaughter cattle prices have risen sharply this month in both Shanghai (9%) and Beijing (6.5%). Retail prices for beef, chicken and pork also rose strongly in both locations during September.
China’s severe drought conditions continued through September and into October. This is no doubt having a significant impact on rising food prices.
In late September Laos and China signed an MOU to cooperate and remove barriers to the export of live cattle from Laos to China. See news article below. This is a project that has been in the planning stages for many years. Up until about 5 years ago, some Lao live cattle (and others from Myanmar and Thailand) were smuggled across the northern border near Boten into China. The formalisation of the trade has been planned since Lao agreed to cooperate with China to allow the “Belt and Road” railway line to be constructed from the Lao/China border crossing at Boten to the Lao capital of Vientiane. There are further projects that are planned which involve bringing imported Australian cattle landed on the coast of Vietnam overland through Vietnam and Laos to complete their quarantine for entry to China near the Boten crossing point in the far north. I don’t have any current information of the status of this proposed supply route but in principle it appears to be a potential means of importing live Australian slaughter cattle into China via Vietnam and Laos.
Philippines : Slaughter Cattle AUD $3.28 / kg (Peso 39.0 to AUD$1)
No change in slaughter cattle or retail beef prices during September. Even the price of fuel has remained steady at about 72 peso per litre.
Indian Buffalo Meat is imported into the Philippines but can only be used for manufacturing and is prohibited for direct retail sale.
Thailand : Slaughter Steers AUD $4.03 / kg (Baht 24.8 to $1AUD)
No significant change in the price for slaughter cattle this month.
Frozen Indian Buffalo Meat is imported into Thailand but must only be used for manufacturing purposes and cannot be sold direct to consumers in the retail market.
I visited Phuket island in southern Thailand during September and took the photo below at a local supermarket. This round/knuckle was selling for 115 Baht for 250 grams or Baht 460 per kg @ 24.8 Baht to $1AUD converts to AUD$18.55 per kg.
Enough about beef. How about this demonstration of animal conditioning and management. My Scottish mates run a pheasant shooting business on their cattle/sheep/renewable energy hill farm near the English border. The photos below show the game keeper feeding young birds which are being grown up for the shooting season at Christmas time. He feeds them each day and blows a whistle and the birds come for the food. When the young birds are put out in the bush on the hills initially, they are held in secure pens to protect them from the foxes and other predators. As they grow, they are let out of their pens and provided with the leafy rape crops to feed and hide in. All the meat from shot birds is consumed and I can confirm that it can be cooked in many ways and is absolutely delicious.
Initially the birds are held in large secure compounds in wooded areas to protect them from predators.
Each time the game keeper feeds the birds he blows a whistle and the birds soon learn that the whistle means dinner time and come running for a feed. The blue drums are feeding stations which are constantly topped up to promote optimal growth. The leafy crop on either side of the track is rape which provides excellent cover from predators.
These figures are converted to AUD$ from their respective currencies which are changing every day so the actual prices here are corrupted slightly by constant foreign exchange fluctuations. The AUD$ figures presented below should be regarded as reliable trends rather than exact individual prices. Where possible the meat cut used for pricing in the wet and supermarket is Knuckle / Round.
One thought on “September Market Report : S.E. Asian Beef Industry”
Always appreciate your input, Ross.
Although the myriad of tech access may be excluding some who may appreciate your on the ground knowledge,
Please continue to send your reports in the simplest online format.