Weak demand is increasing the pressure on Indonesian lot feeders with some discounting of slaughter cattle during March to as low as Rp39,500.
For the first quarter of 2017 feeder and slaughter cattle exports were back 45pc compared with 2016 levels, to 161,045 head, underpinned by lower availability of Australian cattle, high cattle prices and a range of in-market challenges.
Anyone who walked by the LiveCorp trade booth at the NTCA conference last Friday would have noticed conference delegates sitting on stools and staring into enclosed headsets, and moving a little like astronauts as they were transported into an immersive visual environment.
There appears to be a general sentiment that the “new” supply and demand equation which includes Indian beef has reached a point where the instability caused by Indian supply has now been factored into the market (after capturing about 50pc of the business) and is no longer a disrupter to current day to day trading.
Australian live feeder and slaughter cattle exports are forecast to gradually increase in coming years, according to ABARES.
Greater adoption of pre-export feeding of cattle is a prospect already being discussed in the wake of Indonesia’s decision last week to lift livestock weight limits to 450kg maximum average weight, per consignment.
Australia’s largest livestock exporter Wellard Ltd has reported an underlying EBITDA loss of $1.3 million and a statutory net loss of $17.9m for the six months ended 31 December 2016.
One of the most interesting observations for January is the discovery of sales of low-priced frozen beef from Spain in Java, which has been selling strongly since arriving in December 2016.
A reduction in annual export sales for 2017 of about 50 percent is starting to sound more like a fair estimate in light of the impact Indian buffalo meat is having on slaughter cattle demand in Indonesia, writes Dr Ross Ainsworth.
After 18 months of promising signals but little actual trade, with just three small air-consignments of cattle delivered to date under a new trade protocol signed back in July 2015, a first sea-based shipment of steers will depart Australia for China early next month.