January 27, 2017


Indonesia poultry farming turns automated driven by competition


Indonesia's poultry farming system is slowly transitioning from intensive, open-housed system farms to closed-house, automated housing system farms due to increasing competition, a recent poultry report released by the US Department of Agriculture (USDA) said.


"This change is the result of increasing poultry market competitiveness, characterized by increasing labor costs, the quest for higher yields, and disease pressures such as highly pathogenic avian influenza (HPAI)", said the report, which was prepared by the USDA Foreign Agricultural Service in Jakarta.


Indonesia's commercial poultry sector has grown significantly since the 1980s. The Indonesian

Feed Producers Association (APPI/GPMT) said the sector supplies 65% of Indonesia's

animal protein.


The Indonesian poultry industry is valued at an estimated over US$34 billion, and is made up of six sub-sectors: feed, breeding, broiler farming, layer farming, slaughterhouses and processing.

HPAI outbreaks between 2004 and 2007 caused around $315 million in losses from chicken culls, lost export opportunities, decreased poultry demand, and other costs related to disease treatment, according to the National Commission on Bird Flu Control and Influenza Pandemic Preparedness.


Decreased broiler demand


Although the HPAI outbreaks were limited to layer flocks, public fears drove down broiler demand, pushing prices to levels below production costs and caused many farms to shut down, the report said.


In 2010-2012, Indonesia experienced a strong economy, driving the Ministry of Agriculture (MOA), to promote an agenda to double poultry meat consumption from around 7.5 kg/capita in 2012 to 15 kg/capita by 2017.


There has been an oversupply of day-old chicks since 2015, and in response, the Directorate General of Livestock and Animal Health requested Indonesia's 12 main broiler breeders in 2015 to cull 6 million of their productive breeders to support farm gate prices which, according to the Indonesian Public Poultry Association, are at parity with production costs (about IDR16,000-17,000/kg of meat) in most Indonesian cities.


This implies that the cull made little improvement on live broiler prices, according to the report. (It should be noted, too, that long marketing chains and the use of brokers between some farms and retail also support high poultry prices in Indonesia).


It was noted that breeder culling only took place in the fourth quarter of 2015. Thus, the cull did not have a significant effect on 2015 production, which increased by 21% over the previous year to 2.8 million tonnes, USDA said.


As no culling took place in 2016, production was estimated to have grown 15% to 3.3 million tonnes, although this is lower than in 2015.


This year, broiler meat production is expected to reach 3.5 million tonnes, or 8% over 2016.

Video >

Follow Us