- Indonesian importers losing about AUD$280 per head on slaughter steers.
- Zero Vietnam imports from Australia during October.
Usually, I will try the beef dishes when I visit a new place but in this case I could not resist the Alligator sandwich. A “Po Boy” is the slang name given to a big sandwich suitable for a poor boy” – that is, big and cheap to fill up a poor person. In Bourbon Street, New Orleans, these sandwiches are huge but so is the price. Remember that these prices are in USD$ so the alligator po boy is AUD$26. But I made the right choice as the fried alligator was delicious.
Slaughter steers $4.67kg live weight (Rp10,700 = $1AUD)
Darwin feeder steer prices rose a little. Townsville prices remain firm at around $3.80 for heavy ox.
Once again, low sales numbers have continued to compound the problem of overfat cattle remaining in the feedlot losing even more money for their importers as they continue to pay to feed them, resulting in an even fatter animal, which will attract further discounts. The top rates for the best, low-fat, finished steers was as high as Rp52,000kg, while the bottom rate for excessively fat steers was as low as Rp46,000kg. Slaughter cow rates are about Rp44,500kg.
A presentation from the Indonesian importers at the QLEA meeting in Townsville indicated that the average loss for importers was about Rp6000kg for a finished stock. For a fat steer at 500kg, this loss adds up to a total of Rp3,000,000 or a horrendous loss of AUD$280 per head. The speaker also suggested that in the interests of the future of the trade, producers should reduce their prices to their Indonesian customers to prevent a total collapse of the importing industry and protect their own future market. While this is a perfectly logical and reasonable argument, I seem to remember a similar proposition being ignored during the many years of drought, low prices and hardship suffered by Australian producers when the situation was reversed. I am afraid that it is human nature for market participants to take advantage of a profitable opportunity now rather than giving it up for potential future benefits. Regardless of the genuine sympathy felt by the Australian producers for the importers’ plight, I expect that the market will be left to work itself out without any intervention from industry or governments.
Australian government figures for September show a total of 29,972 feeder cattle exported to Indonesia, down a little on the August figure of 32,300. 14,806 of these feeders were shipped from Broome, while the balance of 15,166 were dispatched from Darwin. Darren Gilbert from the Port of Darwin has advised that 8185 feeders were exported to Indonesia during October.
The Indonesian covid position continues to improve with cases falling and vaccination rates on the rise. I suspect a lot of this decrease in new cases is a new focus on vaccination rather than testing. Incoming travel restrictions are being reviewed and eased every few weeks.
My agent in Jakarta advises that they were once again unable to find any Indian buffalo meat in the supermarkets they visited for their price checks at the end of October.
The Indonesian press this month included many articles about regional Indonesian governments proposing a long list of beef cattle breeding projects, including West Sumatra, East Kalimantan, Aceh, Nusa Tenggara Timor and South Sulawesi. The biggest hurdle to getting these initiatives off the ground is the cost. Firstly, if anyone thinks that the cost of steers is high, this is nothing compared with the recent increase in breeder cattle prices. Breeding heifers in Australia are at an all-time premium at this stage of the aggressive national herd rebuilding process so the cost of even a small shipment of heifers will be enormous. The next hitch is that as a result of some problems with poor management of the welfare of breeders from some previous shipments there will need to be a substantial investment in post arrival monitoring as well as recovery contingencies for any recipient groups who are unable to provide adequate care. I can confirm through personal experience that while this after-sales service process is entirely possible it is very expensive.
Slaughter steers $4.82kg (VND17,000 to $1AUD)
Slaughter rates have not changed in many months with the average price still at Dong 82,000kg live weight for steers. All eyes are on the imminent release of the Brazilian bulls from their extended post arrival quarantine. Up to date, a small number of injured animals have been sent from quarantine to emergency slaughter with the reports from butchers being very positive. I am advised that prices in Brazil have plunged recently, presumably due to the inability to export processed beef to China and elsewhere. If these low prices continue then the landed price for live exports in Vietnam will become even more attractive. I am advised that the CIF price of Australian slaughter cattle landed in Vietnam at the end of October would be close to USD$4kg, while the CIF for Brazilian bulls is close to a full USD$1kg less.
As with Indonesia, Vietnam has also experienced an encouraging improvement in its pandemic situation during October.
Total exports from Australia to Vietnam in August were 22,488 consisting of 12,038 slaughter cattle, 7,761 feeders and 2,689 breeders. The total dipped in September to 7,501 including 843 feeders, 4,317 slaughters, 65 buffalo and 2276 breeders. The only information I have for October is that there were no shipments to Vietnam from Townsville or Darwin so even if there were some ships from Western Australian ports the total export numbers would probably be down at levels even lower than September.
Slaughter cattle $7.38kg live weight (RMB 4.77 = AUD$)
Slaughter cattle prices have firmed slightly in Shanghai. Supermarket beef prices have increased by about 5 percent, while retail rates for pork are up by more than 40 percent.
It appears that Brazilian shipments of frozen beef remain suspended pending further investigation of the two atypical BSE cases. This is taking much longer than the previous notification in 2019 when the trade was interrupted for only 10 days. Brazil has been one of the largest exporters of beef into China for some time so a total halt must be having a severe impact at both ends of the market. TQ