As highlighted in the latest edition of Meat & Livestock Australia’s LiveLink released this morning, Australian live cattle exports in September and October were well below the historical average.

With increased numbers of importers signing up to the Indonesian government’s 5:1 (one breeder for every five feeder cattle imports) policy, the trade picked up slightly during October – albeit still historically low due to policy uncertainties and high Australian cattle prices.

Recent reports suggest importers will have until the end of 2018 to demonstrate they have complied with the new breeder-feeder ratio requirements.

• In October, almost 45,000 head (feeder and slaughter cattle) were exported, well below 73,000 head ten-year October average.
• Furthermore, just over 25,000 head were shipped to Indonesia, close to half the ten-year October average.

Nevertheless, if Australian live exports recover to more typical monthly volumes in November and December, annual feeder and slaughter cattle export totals will be on track to reach close to one million head this year.

If realised, this will mark an 18pc decline from the 1.22 million head exported in 2015.

In-market reports from Indonesia indicate the 10,000 tonnes of imported Indian buffalo meat has begun circulating beyond the Jakarta and Bandung areas, with the imported product identified in wet markets as far west as Medan and far east as Surbaya.

In addition, permits have been issued to import another 70,000 tonnes of Indian buffalo this year.

Australian beef exports to Indonesia have also grown considerably this year, following a change in import policy, with almost 51,000 tonnes shipped between the January and October period, up 53% year-on-year. Jakarta wet market prices, collected by MLA, have remained relatively steady in recent months, with indicative local beef knuckle averaging IDR 111,000/kg in October.

Are cattle exports from Mexico to Indo on the cards?

Indonesia has recently agreed upon and signed a health protocol with Mexico to allow cattle to be shipped across the Pacific.

While Mexico is a large exporter of cattle, rivalling Australia’s number one ranking in recent years, the entire trade is based on trucking feeder cattle across the border to the United States (or on to Canada).

While cattle prices in Mexico, and North America in general, have trended in the opposite direction to Australia over the past twelve months, it is yet to be established whether the estimated three week voyage from Mexico to Indonesia will be commercially attractive.

Mexican cattle imports will also be required to operate within the 5:1 breeder import policy. In addition, the cattle herd in Mexico has been in steady decline over the past three decades and was further impacted by the same drought conditions which saw the US cattle herd drop between 2011 and 2012 – except, unlike the US, Mexico is yet to register significant signs of a herd recovery.

Source: Meat & Livestock Australia