Indo feedlotters return to profits but still courting other live-ex suppliers

However, it won't be enough to stop our largest live cattle export customer from continuing to court other suppliers.

Brazil is the main contender, given its large herd of suitable Nellore cattle and consistently low prices, but discussions have also been happening with South Africa, it was revealed in this year's joint state of the industry report from the Indonesia-Australia Partnership on Food Security in the Red Meat and Cattle Sector.

Brazil also offers the advantage of all male cattle being entire bulls, which is desirable in the Indonesian market.

The absence of requirements to meet Australia's Exporter Supply Chain Assurance System is seen as another plus, the report said.

On the other hand, there are the challenges of the long sea journey, which is 25 to 30 days from Brazil, and the additional transport and logistics costs and animal health risks that the journey entails.

The report also said an Indonesian trade mission to South Africa took place in early July, exploring the possibility of importing 50,000 feeder cattle.

"The current price of Australian feeder cattle is sufficiently low that importing from other countries is not urgent," the report said.

However, the high price of Australian feeder cattle that persisted over the pandemic years encouraged the Government of Indonesia and the country's feedlotters to consider alternative sources of feeder cattle and that was continuing.

Meanwhile, recent information from Indonesia's Ministry of Agriculture indicates that the easterly spread of foot and mouth and lumpy skin disease has slowed but not stopped.

Big numbers of northern cattle continue to be cut out of the trade due to zero tolerance for skin lesions in the aftermath of Indonesia's suspension of some Australian quarantine facilities when LSD was detected in Australian cattle.

Northern Territory Cattlemen's Association boss Will Evans said pastoralists had feed on the ground and could hang onto stock but a resolution was needed as quickly as possible.

He said the big issue was the vagueness around what cattle were suitable and what weren't.

"This can't be the permanent way forward," he said.

"But we are making some progress and cattle are being moved, which is a positive," he said.

"The Vietnam trade has kicked back in which is huge for Queensland producers coming into a dry period."

The Indonesian Feedlotters Association, Gapuspindo, predicts that total Australian feeder cattle imports could reach 350,000 head by the end of 2023, a slight increase over 2022.

Beef sales in Indonesia had been slow to recover to pre-pandemic levels, the state of the industry report said.

Reduced purchasing power of Indonesian consumers had resulted in a switch to cheaper sources of protein, including chicken and Indian buffalo meat, it said.

IBM had become increasing available but was not wanted by hotels, restaurants and the catering sector or by parts of the meat manufacturing industry.

"While Indonesia has genuine interest in expanding suppliers beyond Australia, there remains a strong preference for the quality and convenience of Australian product," the report said.