August 27, 2013

Indonesia's beef self-sufficiency goal may exhaust local cattle supply 

Indonesia's cattle herd could disappear within eight years, if it continues to push for 90% of its beef to be domestically produced, ANZ Bank reported.

The update came after the Indonesian president requested ANZ to model various levels of beef self-sufficiency.

Michael Whitehead, global leader of agribusiness research at ANZ, says there needs to be major improvements to cattle productivity. He added that a self-sufficiency rate of 70% is much more achievable, and that aim could start by 2020, not 2014 as originally planned.

Whitehead believes that would allow a continuation of Australian live cattle and beef exports.

"Hypothetically, if we look at 70% self-sufficiency, that could mean that live exports of around 470,000 head in 2020, with 75,000 tonnes of packaged beef rising in 2030 to just under 700,000 head.

"The official definition of self-sufficiency is 90% by 2014. That is 90% domestic beef requirements met by the domestic herd, with 10% catered for by imports of packaged beef and live cattle."

Indonesia could face difficulty in sustaining self-sufficiency if it is implemented next year, based on current levels of productivity of Indonesian cattle and the present consumption trends.

Whithead states that a need to preserve local cattle herds is one of the reasons behind Indonesia's sponsorship of the Indo Oz Beef Investment and Trade Forum in Brisbane.