Live Export

Race on to avoid Indonesian abattoir bottleneck

James Nason, 15/11/2011

With large numbers of cattle now going back into Indonesia, some are questioning whether there will be enough accredited abattoirs in place to process them. Mid-December is shaping as a critical test for new supply chains in Indonesia and their ability to absorb the large numbers of cattle now going back into the market.

An estimated 14 individual abattoirs have been approved in Indonesia by the Federal Government since early August, under new rules designed to ensure the welfare of Australian cattle processed in the market.

It is believed a similar number have been audited and are awaiting approval, while more are included in new supply chain upgrades planned for coming months.

While the number of certified abattoirs available to process Australian cattle in Indonesia remains limited, the Federal Government has not moved to restrict the number of cattle that can be shipped to the market at the same time.

An estimated 100,000 cattle were exported to Indonesia between August and October, with a further 70,000 expected to be shipped during November and December.

The large numbers of cattle going in and the limited number of abattoirs currently available to process them has fuelled concerns that some pressure will be placed on the accredited system, which could have implications for individual supply chains.

Exporters and importers are facing something of a high risk balancing act as they try to make up for lost ground as a result of the two month trade shutdown.

The obvious motivation is to ship as many cattle to Indonesia as possible while the seasonal cattle-supply window is still open. But at the same time exporters and importers are having to keep a close eye on whether they will have enough certified abattoir capacity in place to process those consignments when they finally move out of the feedlot in three-months time.

The risk is high because if exporters and importers are caught with more market-ready cattle than they can process through their nominated supply chains and are forced to process cattle outside accredited abattoirs, they face the strong prospect of again being shut out of the market.

The sharp spike that occurred in exports in September in particular means the first potential bottleneck is likely to arrive in mid-December when those cattle come off feed.

One industry source, who asked not to be named, told Beef Central this week that some supply chains were “dragging their feet” in implementing full traceability, which was fuelling nervousness that sufficient abattoir capacity would not be ready in time.

“I think more cattle have gone in than they have the capacity to kill through accredited abattoirs,” the source said.

However, industry bodies remain confident that a processing deficit will not occur.

At the recent Australian Live Exporters Council annual general meeting in Adelaide, exporters held a closed session where they each outlined the volumes they expected to supply to Indonesia by the end of this year, and the status of their supply chain accreditation programs.

The conclusion, according to sources who participated, was that sufficient capacity is in the approval pipeline to ensure cattle volumes can be processed within accredited supply chains.

ALEC chief executive officer Lach MacKinnon said the Adelaide meeting suggested capacity was on track to match the growth in export volumes.

“Capacity is something that industry is dealing with, and it appears at the moment that it will be okay,” Mr MacKinnon said. 

Meat and Livestock Australia livestock exports manager Michael Finucan told Beef Central yesterday that exporters were aware of their own supply chain capacity and the need to have additional facilities coming online quickly.

“Individual supply chains are aware of the risk and are managing it with their importers,” Mr Finucan said.

“Cattle exports will come on in a controlled fashion, and the main bottleneck is going to hit in mid-December, which means there are another four weeks of abattoirs to come online before that happens.”

Mr Finucan said MLA was working with a small number of supply chains that requested assistance to speed up their accreditation program.

The Department of Agriculture, Fisheries and Forestry and AQIS are perhaps best placed to monitor whether a supply bottleneck is likely because they have access to the most up-to-date figures showing the number of accredited abattoirs and the number of cattle going into the market.

Beef Central was waiting for a response from DAFF at the time of its publication this morning. 


Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.


Get Beef Central's news headlines emailed to you -