November Market Report : S.E. Asian Beef Industry

As originally published on Beef Central

108^th Edition : November 2022.

Key Points                              

·        Lumpy Skin Disease (LSD) has now been confirmed in East Java presenting a new threat to Bali and the Eastern Island chain.

·        Indonesian Foot & Mouth Disease (FMD) vaccinations pass 8 million doses.

Indonesia : Slaughter Steers AUD $5.05/kg live weight (Rp10,300 = $1AUD)

Slaughter cattle prices remained steady at Rp52,000 per kg live weight in local currency terms while the AUD value above has reduced as a result of the AUD weakening against the Rupiah during most of November. The general comment from the market is that consumer demand remains very weak with quite low numbers trading at this static price. I am told that there are large volumes of Indian Buffalo Meat (IBM) in the market with the price at Lotte Mart during November at Rp104,900 per kg. There may also be a continuation of the release of the frozen Foot and Mouth Disease emergency slaughter stock depressing fresh beef demand although I am unable to find any hard data on volumes for this item. Food inflation is still a major issue across Indonesia as it is in the rest of the world so this is also likely to be contributing to anaemic demand for fresh beef. Chicken prices are relatively steady at Rp40,000 per kg.

All IBM is imported frozen, deboned and deglanded so the “Fresh” on the label above is just part of their normal ticketing. Rp104,900/kg or AUD$10.18/kg.

Retail meat prices remain firm with Pasar Modern wet market in BSD maintaining Rp165,000 per kg for fresh knuckle while Super Indo prices are back to their normal rate at Rp174,500.  

Total national vaccinations as at 9^th December 2022 from the government website at https://siagapmk.crisis-center.id/ 

Bali vaccination data at the 9^th December 2022. Total of all species vaccinated is 803,897 which is close to 10% of the national figure.

The FMD vaccination program is slogging along although it is very difficult to understand the true state of the control program as the government reporting arrangements are nowhere near adequate to make any sensible assessment. National cattle numbers are not known or if they are they are not made public. If 8 million head have been vaccinated, what proportion of the herd is that? What proportion of those vaccinations were the second dose? If the national cattle herd is, as some sources claim, about 14 million then we need two doses or 28 million vaccinations before the cattle herd will be well protected, with a third shot necessary for strong and ongoing protection. It appears that while there is no shortage of vaccine, the problem is still funding and resources for the actual delivery of the vaccine into stock. This is especially expensive when the average cattle owner has only 2 head of cattle so the logistics of locating, visiting, completing biosecurity measures, vaccinating each animal with a single use syringe etc etc then packing up and moving to the next farmer is an extremely slow and expensive process. It will therefore take years to achieve a strong level of herd protection. Add LSD into the mix and every aspect gains an additional level of cost and complexity.

The cattle in the photos below are near me in Bali where there are about 100 head within 400 meters of my house in the main tourist area of Seminyak. After being away for about 3 weeks I took the photos below of these cows which have been ear-tagged with the new government technology using a QR code to store the vaccination and other history of the animal. Most of the local adult cattle in my area now have these tags but a few still do not.

These cows have been tagged and presumably given a second vaccination during the 3 weeks that I have been away in Australia. They were originally identified as vaccinated about 2 months ago using a red ribbon around their neck which has since fallen off.

The new ear tag includes a QR code which can be interrogated using a smart phone for information relating to that individual animal. Note the fly wound near the eye and buffalo flies on the shoulder.

LSD has now commenced its spread throughout southern Sumatra and Java with numerous reports of clinical cases in the Malang area in the far east of Java island. Malang is less than 200km from the island of Bali as the crow flies or in this case as the insect flies. Some local observers suggest that the rapid spread through Java is more likely to be due to illegal animal movements on trucks rather than through insect transmission.

This now means that the cattle in Bali will be under threat in the coming months of the monsoon season when the prevailing winds will be blowing almost directly from Java to Bali. No live cattle are permitted to enter Bali from any other location including Java so any LSD infection in Bali is more likely to be through insect transmission or physical transfer of infected material. Official figures presented by the government on the 3^rd of December state that 11,474 cases of LSD have now been confirmed across 6 provinces. This is probably an extremely conservative estimate.

The red marker is Blitar, the site of the most recent positive LSD confirmation. Plenty of unconfirmed cases to the east of Blitar which are getting very close to Bali. The distance from Surabaya to Timor is about 1200km. Direct distance from Timor to Darwin is about 830km.

This mother and calf are in a second group of Bali cattle near my house. As you can see in the last two cattle photos there are large numbers of biting flies on these cattle which is quite normal during the  monsoon season. If LSD comes to Bali in the next few months these high fly numbers will mean misery for these cattle as all manner of biting insects attack the large numbers of LSD lesions that each animal will suffer.

Darwin feeder steer prices have fallen from $5.25 in October to $5.00 per kg live weight in November which is opposite to the usual price trend at this time of the year. The prices for finished cattle have slipped substantially in eastern Australia and this has reduced demand for feeders going from northern Australia to the eastern states. This reduced demand from the east may well be the explanation for the slightly weaker Darwin feeder price. Thanks to the efficient work of Carleen Mitchell from the Darwin Port Authority we have current data on all livestock exports from Darwin in November and it was provided on the 1^st of December. 19,685 cattle were exported to Indonesia on 8 separate vessels during November. It’s a pity that the federal government agencies which collect the same data are not able to provide it for all Australian ports in such a timely manner.

Darwin Port Authority livestock export statistics for November 2022.

Vietnam : Slaughter Steers AUD $5.28 / kg (VND16,300 to $1AUD)

No change again in the slaughter cattle prices during November with the indicator rate remaining at Dong 86,000 per kg live weight. The drop in the AUD price above is due to the substantial weakening of the Aussie dollar against most currencies including the Dong during the month. Vietnamese importers will be encouraged by the sudden reduction in the price of slaughter cattle in the east and south of Australia. Slaughter ox and bulls suitable for Vietnam are selling for around $4 or less per kg live weight in Townsville which should give importers a reasonable chance of at least breaking even once again.

From the beginning of 2022 until now, the whole country has had 1,185 outbreaks of African Swine Fever (ASF) in 52 provinces and cities, forcing the destruction of 54,533 pigs. In November, the whole country had 23 outbreaks in 20 districts of 14 provinces. 

In a major international breakthrough, the Ministry of Agriculture has announced that Vietnam has successfully produced the world’s first commercial vaccine against ASF in June 2022. The vaccine was developed through a collaboration between the Vietnamese company Navetco and researchers from the US Agricultural research institute. The product is currently undergoing the registration approval process.

Online Indian buffalo meat for Dong108,000 / kg (AUD$6.63) in 20kg cartons.

Fresh Aussie imported beef online for Dong 456,000 per kg or AUD$27.97

On line sales of Indian Buffalo meat for Dong 115,000 per kg (AUD$7.06) – for 20kg cartons.

China :  Slaughter Cattle AUD $7.69 / kg live weight (RMB 4.75 = 1AUD$)

Slaughter cattle prices continue their rise this month with small increases in both Beijing and Shanghai. The AUD price above is lower as a result of AUD/Yuan cross rate changes. Domestic beef cattle and beef production is predicted to increase during 2023. South American imports are expected to decline next year due to reduced supplies. Despite the difficult beef market and general economic problems in 2023, Australia is expected to increase its exports to China as its herd numbers recover and slaughter rates begin to rise. If the drought breaks in the US there is likely to be a sharp reduction in slaughter rates so the combined north and south American competition may well experience a sharp decline.

MV Gulf Livestock 1 tragedy.

On the 11^th December, the ABC published an article “Into the storm” providing an update on the tragic loss of the vessel and 41 crew including 2 Australians, Lukas Orda and William Mainprize more than 2 years ago. The ship was exporting just under 6,000 dairy heifers from New Zealand to China. A report commissioned by the New Zealand government said it appeared likely that the sinking of the vessel was caused by a combination of factors including “at least mechanical, meteorological and human factors”. As the vessel was registered in Panama, responsibility for the investigation into the sinking rests with the Panama Maritime Authority. After two long years, the families of the missing seamen are still waiting for the release of the Panama Authority report. This delay is indefensible and should encourage the Australian government to make the strongest possible submission to the Panama government demanding a speedy resolution to the investigation and publication of the final report.

The 41 missing seamen from the Gulf Livestock 1.

Philippines  :  Slaughter Cattle AUD $3.42 / kg (Peso 38.0 to AUD$1)

For the first time since January 2022 the price of slaughter cattle has made a small increase from Peso128 to Peso130 per kg live weight. Otherwise, little to report except that ASF remains a serious problem across the country with strict movement controls and other biosecurity measures strongly enforced. The threat of Covid 19 appears to be well under control as it is for most other countries.

Thailand  :  Slaughter Steers AUD $4.08 / kg (Baht 23.8 to $1AUD)

Slaughter cattle prices have weakened from 100 Baht in October to 97 in November. This is an average is made up from a heavy cattle rate of B101-103 for stock over 600kg and a rate of 92-94 for 450 to 600. Beef in the wet markets is a little cheaper at Baht 280 per kg.

Despite these lower rates many feedlots are beginning to stock up with feeders as there is an expectation that the trade into China will soon open up again after being locked down for the Covid 19 pandemic. My agent also reports that FAO personnel have advised that many illegal China-Lao cross-border cattle smugglers have been jailed after being caught trying to smuggle cattle into China during the pandemic.

Victor Churchill Butcher shop, High Street, Armadale.

In 2021, famed Sydney butcher Victor Churchill opened their first Victorian establishment in High Street, Armadale. And it is magnificent. I visited Melbourne during November to celebrate my 70^th birthday with family and friends. My daughters know that I am a serious carnivore so when they discovered this combined butcher shop, restaurant and wine bar they booked it for my birthday lunch. The photos below tell the story better than any words. Sensational food, wine list and service in a small, beautifully designed space at the back of the 5 star butcher shop. The prices are as eye-watering as the food is mouth-watering, but it was such a great experience that the cost still represented great value. I will be back. Highly recommended.

Beautifully designed and fitted out with a private and cosy feel even though it is at the back of a busy retail butcher shop.

Exceptional service from the very professional staff

The food is prepared in a small kitchen at the back of the bar.

And this magnificent beef tasted even better than it looks.

All the products for sale are presented in beautiful cabinets that would not be out of place in an upmarket jewellery shop.

These figures are converted to AUD$ from their respective currencies which are changing every day so the actual prices here are corrupted slightly by constant foreign exchange fluctuations. The AUD$ figures presented below should be regarded as reliable trends rather than exact individual prices. Where possible the meat cut used for pricing in the wet and supermarket is Knuckle / Round.