In a noticeable trend, live export cattle prices to Indonesia have seen a decline, reflecting shifting dynamics in the market as Indonesia increases its imports of boxed meat. Feeder steers transported from Darwin are now fetching approximately $2.60 per kilogram, a substantial drop from the peak of $5.50 per kilogram recorded in 2022. This price decrease translates to a 350kg steer, valued at roughly $1,900 in March of the previous year, now being worth just over $900.
This price level has not been witnessed since the sudden slump in 2020, instigated by the global COVID-19 pandemic.
Garry Riggs, a cattle producer from Lakefield Station in the Northern Territory, expressed his disappointment as he was offered only $2.60 per kilo for a consignment of "blemish-free cattle." This offer fell short of his expectations, prompting him to return the cattle to the paddock. Riggs explained that the price drop happened astonishingly quickly, leaving many in the industry grappling with uncertainty.
Riggs likened the current situation to the live export ban of 2011, highlighting that even good-quality cattle are encountering obstacles due to minor skin blemishes or scratches. He lamented the challenges that this market downturn is posing to industry participants.
Indonesia's stringent requirement for Australian cattle to be free of skin blemishes, which may have initially been related to concerns about lumpy skin disease, continues to be in effect despite Australia not having the disease. One cannot help but wonder if such a policy would persist if Indonesia's demand for Australian cattle were stronger.
The live export sector is evidently facing intensified competition from imports of boxed meat. Data from Meat and Livestock Australia reveals that year-to-date, Indonesia has imported 52,000 tonnes of beef from Australia, marking a substantial 76% increase year-on-year. Additionally, there is a growing influx of lower-cost, frozen Indian buffalo meat entering the Indonesian market, with expectations of India exporting more than 100,000 tonnes this year.
Notably, many exporters are now turning to the Townsville Port in search of more cost-effective cattle sourcing, with prices ranging from $2.20 to $2.40 per kilogram, lower than those in the Northern Territory.
Cattle producers, especially in regions like the Kimberley in Western Australia, are facing challenges with limited shipment opportunities and the added stress of bushfire risks ahead of the wet season. The trade to Indonesia remains open but slower than usual, leaving producers navigating a complex and uncertain landscape.