Indonesia's cattle weight rule spells concern

Indonesia - Australia's biggest live export market for cattle - now enforcing a weight limit of 350 kilogrammes liveweight on all its shipments, is putting pressure on southern markets and potentially changing the supply dynamics of slaughter beef in the north.

 

The weight regulation - which has previously existed but not been policed by Indonesian authorities - has stopped the flow of cows and other heavier slaughter animals being absorbed by Indonesia at healthy money.

 

Elders Charters Towers live-export co-ordinator Shane Stretton said he didn't expect any flood of cattle into abattoirs because of the slow-down in live shipping activity to Indonesia, which accounted for a massive 81% of all the live cattle sold out of Australia in the past 12 months, or more than 700,000 head.

 

"Meatworks won't be flooded with cattle because of what has happened, but there will be a few extra cows and heavier cattle around,'' Stretton said.

 

"But the longer (the 350kg weight limit) goes on, the bigger impact it could have, as producers will have to decide whether to sell their cattle younger or take them on to heavier weights and look for other markets.''

 

The Queensland cattle kill has been tracking high so far this month, as evidenced by the latest figures for the week ending June 11, when 76,298 head were slaughtered, compared with 57,075 head for the corresponding week last year.

 

A lack of rain across parts of southern Queensland has forced some producers to sell early, according to National Livestock Reporting Service.

 

Just last week, Meat and Livestock Australia (MLA) said it expected sales of grinding beef to the US to slow due to lacklustre food-service demand and an oversupply of cheap chicken.

 

Regarding the short-term outlook for beef sales to the US, MLA said: "Given the current weaker demand signals (with little room for improvement in coming weeks) exports of Australian beef are expected to reach only 16,000 tonnes in June - 27% lower than a year ago and 39% lower than the five-year average.''

 

It is unclear when the Indonesian live-export issue could be resolved, as there is an element of politics involved with the 350kg weight restriction, partly because Indonesian authorities are trying to protect their own cattle industry and prices by restricting the number of heavy cattle from Australia destined for quick slaughter.