Dairy heifers assembled by SAILS for an export shipment in January 2024.

TWO prominent Australian livestock exporting companies have formed a joint venture to supply dairy cattle to Indonesia, in alignment with newly elected President Prabowo Subianto’s free milk for school students program.

Tony Gooden from Frontier Agri International and Andy Ingle from Southern Australian International Livestock Services (SAILS) confirmed the new commercial partnership in an interview with Beef Central this week.

Frontier Agri is a major exporter of Australian cattle to Indonesia and Vietnam. The company has exported in excess of 100,000 cattle to Indonesia so far this year and close to one million head in the 11 years it has been operating.

SAILS is a large exporter of Australian dairy and breeding cattle. It has exported 195,000 dairy and beef breeding cattle predominantly from Australia, but also New Zealand, Uruguay, and Chile, since purchasing the “Landmark International” export business from Nutrien in May 2020.

Mr Gooden and Mr Ingle are long-term players in the livestock export industry and both cut their teeth in the former Elders International livestock business. They have also both previously worked under the umbrella of Nutrien and said they share similar cultural and structured approaches to business transactions.

The exporters said the joint venture harnesses their collective strengths which include long-established relationships with customers in Indonesia and deep experience in sourcing and exporting Australian dairy cattle.

Dairy cattle demand rising

Indonesian demand for dairy cattle is set to increase in coming years under new President Prabowo Subianto’s signature policy to provide regular free meals, including milk, to approximately 82 million Indonesian school children.

Indonesian President Prabowo Subianto addresing crowds during the 2024 Presidential election campaign.

The President has said Indonesia will need to import more than one million dairy cows between 2025 and 2028 to bring the plan to fruition.

Indonesian media has reported the Prabowo Government is prepared to commit  IDR 71 trillion (AUD $6.9 billion) to support the flagship free school meals program, including IDR14 trillion (AUD $1.3 billion) for fresh milk procurement.

The Government is also reported to have directed resourcing towards preparing 1.5 million hectares for domestic and foreign investors who are willing to build dairy production farms, lifted investment in Indonesia’s dairy processing sector and engaged in talks with large, established multi-national dairy processors.

Agriculture Minister Andi Amran Sulaiman told local media late last week the Government is also making the process of importing dairy cows easier to support the free school meal plan.

Achieving the import of one million head of cattle in three years and managing the additional farming and dairy processing requirements would be a major logistical task.

Whether the volumes flagged are feasible is one question, but the new President appears to have left little doubt about the strength of his desire to act on importing dairy cattle to move Indonesia towards a goal of self-sufficiency in protein production.

‘We want to support the program’

“We want to support the program,” Tony Gooden told Beef Central.

Frontier Agri’s Will McEwin and Tony Gooden pictured wih customers at an Indonesian feedlot earlier this year.

“Obviously there are commercial opportunities there, but we want to see the policy be successful and meet its objectives.

“Indonesia is an incredibly important livestock industry, this year it will take close on 600,000 Australian cattle.”

Most dairy farms in Indonesia are located in the highlands of Central and Eastern Java where temperatures and climates are well-suited to dairy cattle production, Mr Gooden said.

Mr Ingle said the type of dairy cattle exported from Australia to Indonesia would depend largely on the areas and environments they’re going into.

SAILS’ Andy Ingle

“We will talk to customers and advise what we think are the best animals to go to what region, whether they’re pure Holsteins or Jerseys or a Holstein/Jersey cross animal.

“There are some different climatic regions there. Obviously each project needs to have that technical support and advice and be looked at on an individual basis.”

Mr Gooden said Indonesian partners have indicated that the Indonesian Government plans to start with manageable initial volumes of between 30,000 and 40,000 cattle.

Pre- and Post-sale support essential

There was also some concern among members of the Australian Livestock Exporters Council about the potential for short-term players with no commitment to pre- or post-sale investment to simply try to “jump on the opportunity” and send the wrong cattle to the wrong places and potentially resulting in poor outcomes.

The export of Australian breeding cattle to Indonesia is covered by the Australian Standards for the Export of Livestock (ASEL) to the point of arrival in export countries, but not by the Export Supply Chain Assurance Scheme (ESCAS), which holds exporters liable for the welfare of Australian feeder and slaughter cattle from the point of disembarkation to the point of slaughter in destination markets.

Australian Livestock Exporters Council CEO Mark Harvey-Sutton told Beef Central that ALEC members are held to a Code of Conduct which includes specific policies relating to the management of breeding livestock in destination countries.

“President Prabowo’s commitment represents a significant opportunity for Australia as a nation and for our industry, and it is critically important that we jointly, as the Australian Government and industry, support Indonesia’s ambition to improve the nutritional needs of its population. We are very supportive of Indonesia’s ambition and are ready and willing to assist as an industry.

“It is ALEC’s view that there is need for an aligned strategy between Australian industry and the Australian Government that supports Indonesia’s implementation of the program in a manner that ensures our ongoing market access as well as positive animal welfare outcomes concurrently.

“Historically, our industry has not supported ESCAS for breeding stock due to its impracticality to implement and regulate. The way that we have managed this is by industry having country specific policies in place for exporters sending breeding stock that seek to set expectations around oversight and management of livestock. We hold members to account against this policy via our Code of Conduct. This is an integral part of being an ALEC member.”