The 2021 Joint State of the Industry Report for the Red Meat and Cattle Sector, developed by the Partnership, with valuable contributions from GAPUSPINDO (Indonesian Beef Cattle Farming Association), ASPIDI (Indonesian Meat Importers Association), and MLA (Meat and Livestock Australia), provides a summary of the red meat and cattle trade between Australia and Indonesia for 2021, and concludes with an industry outlook for 2022 and beyond.
The report is published as the world learns to live with the COVID-19 and economies increasingly ease COVID-related restrictions. It provides a summary of industry trends stemming from the pandemic, and the influence of weather, global commerce, and economic recovery on the bilateral trade. The report also underscores several persistent challenges for Australian and Indonesian enterprises along the supply chain.
The JSOI summarizes the status of the bilateral trade between Australia and Indonesia in live cattle and beef products.
The JSOI Update highlights the financial struggles currently being faced by Australian and Indonesian feedlots and abattoirs. All are severely constrained by tight cattle supply and high cattle prices, with many reporting operating losses. COVID-19 continues to place significant pressure on the Indonesian red meat and cattle Industry.
2020 was a challenging year for the Indonesia – Australia bilateral trade in cattle and beef according to the Joint State of the Industry Report published by the Partnership. While industry will continue to face pricing-related struggles in 2021, both countries are working through the challenges, with Indonesia seeking alternative suppliers and Australia rebuilding its herd.
In 2020, live cattle imports into Indonesia slumped, as feedlots and abattoirs felt the pressure of high cattle prices. The price of Australian feeder cattle is likely to remain high in 2021 due to restocking after years of drought. In response to constrained supply, Indonesia is exploring options to import live cattle from Mexico and Brazil. Australian boxed meat products will also face increasing competition from other suppliers, particularly frozen buffalo meat from India and beef from South America.
Increasing Productivity, Trade and Investment in the Red Meat and Cattle Sector
In mid-2020 the Partnership commissioned a study to examine opportunities for Indonesia to export beef to countries in Asia and the Middle East. The study, conducted by ProAnd Associates Australia, also assessed the readiness of Indonesian abattoirs to achieve export status. The report contains detailed information on markets and associated factors of relevance to Indonesia’s export ambitions.
Digital technologies have transformed many industries over the past 20 years. In mid-2020 the Partnership commissioned a study to better understand the opportunities for introducing or scaling up adoption of digital technologies in the red meat and cattle sectors of Indonesia and Australia.
Implemented by The University of Queensland in partnership with the University of Mataram and Bogor Agriculture Institute, the study focussed primarily on post-farm gate technologies. The UQ-led team undertook three investigations to complete the study: 1) a review of literature to better understand digital technologies currently used in Australia and Indonesia; 2) a digital technology audit of the Indonesian industry based on stakeholder interviews; and 3) an E-commerce and consumer survey to determine trends in sales and purchasing.
As part of its commitment to providing industry and government stakeholders with sound evidence for decision making, the Indonesia-Australia Partnership on Food Security in the Red Meat and Cattle Sector has released the July 2020 Update to the 2019 Joint State of the Industry Report. The Joint State of the Industry Report, to be published in January of each year, provides a summary of the bilateral trade between Australia and Indonesia in live cattle and beef products, in the previous year. The July 2020 Update examines the impact of the COVID-19 pandemic on the bilateral meat and cattle trade. The Update highlights the challenges for Australian and Indonesian businesses along the supply chain as a result of the pandemic, the underlying resilience of the bilateral partnership, and recovery opportunities presented by the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).
To view the 2019 JSOI Report click here
to view 2020 JSOI Update click here
The level of commercial investment in cattle production is currently limited to a few key regions where a combination of land availability, access to infrastructure, relatively cheap feed sources, ample water supply, skilled labour and high market demand, occur together. These areas are predominantly in Java and South Sumatra.
This study aimed to identify broader regional potential for commercial investment in Indonesia’s cattle sector, based on the level of government support, bio-physical characteristics, social aspects, infrastructure quality and other supply chain factors. This report provides an overview of each prioritised region and provides initial recommendations that aim to unlock and identify business and investment opportunities. Five areas were identified that had potential for short to medium term growth and expansion, i.e.: (1) Nusa Tenggara Barat (NTB); (2) East Kalimantan; (3) Nusa Tenggara Timur (NTT); (4) South Sulawesi; (5) Southeast Sulawesi. The study did not include well established cattle production areas in Java and Sumatra which predominantly supply the large Javanese markets.
The Partnership underwent a Mid-Term Review in late 2018 and early 2019 which concluded that it had achieved many positive and mutually beneficial outcomes and that it remained relevant to both countries. Members had a common view that the focus for the remainder of the program (Phase 2) should be on improving business and investment climates, supporting Indonesia’s and Australia’s commercial cattle sectors, and promoting two-way trade and investment. This focus was recently reinforced through signing of the Indonesia Australia Comprehensive Economic Partnership Agreement (IA-CEPA) in March 2019. The Program Design Document (PDD) reflects the main outcomes from a Partnership design workshop conducted in April 2019, and Mid-Term Review recommendations that lay out Partnership’s strategic objectives and priorities on the phase 2 implementation.
Indonesia Australia Partnership on Food Security in the Red Meat and Cattle Sector (the Partnership) encourages more than 100 students and professionals in the red meat and cattle sector to find innovative solutions to challenges the sector, especially to support farmers and small and medium enterprises. The students and professionals are alumni of two Partnership’s short course programs, including the NTCA Indonesia Australia Pastoral Program and the Commercial Cattle Breeding and Management Course.
The symposium invited some leading innovators in the sector, including ternaknesia.com who encourage investment on cattle sector through crowdfunding; karapan.com who provide marketplace on cattle sector to cut complicated distribution chain for farmers; and SMARTERNAK and Gama Sapi 4.0 who develop Internet of Things (IoT) to monitor animal health and productivity.
The purpose of the study was to better understand Indonesian consumer and preference of beef products including processed goods. The study looks at consumption trends and preference of Indonesian in Jakarta and Medan using quantitative and qualitative methodology. Jakarta was chosen since it is Indonesia’s capital with a wide range of ethnicities and religions. Medan was selected since it was culturally distinct from Jakarta as well as having a different supply chain and being closer to Malaysia and China. The report covers findings on consumption patterns and beef purchasing habit. The report also identifies six significant clusters of demand for beef in Indonesia.
This study looks at whether it would be viable to set up a beef feedlot and processing plant in a bonded zone in Indonesia. In theory, the bonded zone could enable the operator to leverage Indonesia’s low labour costs, consistent feed availability and high returns for beef co-products into a more competitive offering for the domestic market. This includes the potential for the enterprise to re-export some cuts from the fed cattle to third country markets. Unfortunately, the study found that the construction of facilities to feed, slaughter and debone Australian cattle in Indonesia and with the intention of exporting a percentage of the product is unlikely to be financially viable. Furthermore, the study also looks at costs and benefits of establishing a bonded zone for cattle production and processing and key factors determining the ongoing commercial success of a bonded zone for the beef industry.
The study is a rapid analysis of (1) the international supply chain delivering live cattle to the port in Lampung and onwards to feedlots and abattoirs; and (2) the domestic supply chain transporting live cattle from farms in East Nusa Tenggara (NTT) to ports in Java and onwards to feedlots The study comprised a literature review, on-the-ground observations and meetings with key stakeholders, with a focus on improving handling, logistics and animal welfare. Key findings and recommendations include key insights on an assessment of the macro supply chain environment; constraints to the supply chain; and recommendations relating to supply chain and logistics on capital expenditure, operational improvements, as well as regulation and compliance.
The Indonesia Australia Partnership on Food Security in the Red Meat and Cattle Sector (the Partnership) held Indonesian and Australian Cattle Breeding Program Symposium in collaboration with the Indonesian Society for Animal Science (ISPI) in Jakarta, The symposium aims to provide a platform for the practitioners and academics to exchange ideas on the challenges and opportunities of breeding cattle on a commercial scale in Indonesia to contribute positively to Indonesia’s food security as well as the Indonesian investment climate.
The guideline aims to provide clear and consistent guideline for the Partnership and its projects in presenting and showcasing their brand and identity as the Partnership between Indonesia and Australia on Food Security in Red Meat and Cattle Sector.
All projects and activities funded by the Partnership must follow this guideline when producing promotional materials, including the audio-visual and printed publications; as well as when conducting all communication and social media activities.
The Best practice guide for the transport of cattle in Indonesia is a publication of the Indonesia Australia Partnership on Food Security in the Red Meat and Cattle Sector (the Partnership). The purpose of this guide is to illustrate best practices for handling cattle during transport and in the design and construction of transportation facilities. The guide covers livestock transport on land and at sea in Indonesia, from sourcing cattle through to discharge at their final destination. The guide focuses on and is relevant to both local and imported breeder or slaughter cattle and applies wherever transport may occur within Indonesia throughout the supply chain from ports through to farms, feedlots and abattoirs and everywhere in between.
The Briefing Pack is a short profile of the Partnership, covering its objectives, summary of projects, membership and governance.