5 years in the past, a northern cattle business veteran made the daring prediction that dwell export costs would attain $four per kilogram — and that he would “shout the bar” on the NT Cattlemen’s Convention if it did not occur.
Ross Ainsworth’s forecast got here true this week when a line of feeder steers certain for Indonesia from Darwin offered for a file excessive of $four per kilogram.
With the nationwide cattle herd at its lowest level in additional than 20 years due to the drought, provide throughout northern Australia is tight.
This decreased provide, coupled with entry points for a lot of properties through the northern moist season, means exporters are having to fork out excessive costs to attract cattle onto the market.
Whereas ABC Rural is conscious of not less than one exporter who has paid $four per kilogram for feeder steers to high up a ship, official quotes are for $3.85 per kilogram.
Exporters are paying $3.50 per kilogram for feeder heifers to Indonesia ex-Darwin and for slaughter steers to Vietnam ex-Townsville.
Consolidated Pastoral Firm, which runs one of many largest cattle herds in Australia, primarily focused at dwell export, can also be a part-owner of two feedlots in Indonesia.
Chief government Troy Setter stated whereas the excessive dwell export worth was nice for cattle producers, it created powerful circumstances for South-East Asian importers.
“A number of the larger costs are inflicting some slowdown in quantity to key markets similar to Indonesia and Vietnam,” he stated.
“We’re unsure but how coronavirus will impression — if it does or if it would not — on client demand in a few of our vacation spot nations.
“However there’s actually going to be a margin squeeze and a few pink numbers for the importers, however we’re actually seeing some good black numbers for cattle producers.
NT Livestock Exporters Affiliation CEO Will Evans stated sturdy demand from South East Asia over the previous two years produced strong costs for cattle producers, however exporters had began to undergo.
“With the summer season rains this yr throughout the north and east coast, we have seen market circumstances shift closely in favour of producers,” Mr Evans stated.
“How sustainable that is within the present setting, with the challenges we have now coming down the pipeline, stays to be seen.
“We’re quickly approaching some extent the place a worth correction goes to turn out to be essential, as present ranges imply we’re not aggressive in our export markets.”
‘We do not suppose we will maintain this going’
Paulus Hadi Subroto, who manages a feedlot in North Sumatra that imports and fattens Australian cattle, stated the skyrocketing worth was hurting his enterprise.
He stated his feedlot was solely half full, and that when these cattle have been offered to the meatworks, he was unsure whether or not he might afford extra.
“We’re afraid that if we proceed shopping for cattle from Australia, then no person will purchase [the beef] in Indonesia as a result of the worth is simply too excessive.
“The value [we are paying] for cattle from Australia is about $US3.60 a kilogram ($5.83), so we must suppose twice about shopping for cattle from Australia, as a result of we do not suppose we will maintain this case going.
Mr Subroto stated his enterprise usually employed about 100 individuals however that he had laid off almost half of his workforce.
He stated cattle importers in Indonesia have been dealing with strain, not simply from excessive Australian costs, but additionally from the rising quantity of cheaper imports of frozen Indian buffalo meat and frozen Brazilian beef.