Territory Stories

Year in review 2016-2017, Northern Territory Cattlemen's Association



Year in review 2016-2017, Northern Territory Cattlemen's Association


Northern Territory Cattlemen's Association yearbook; Reports; PublicationNT




Made available via the Publications (Legal Deposit) Act 2004 (NT).




Livestock -- Northern Territory -- Periodicals; Beef cattle -- Northern Territory -- Periodicals; Ranches -- Northern Territory -- Periodicals

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Northern Territory Cattlemen's Association

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Indonesia & Vietnam - Risks, Opportunities and Tactics implications for us. Included in this rule is pharmaceuticals, food, and all the items along the chain. The question to us as the beef industry is what happens to the animals that fall out of halal? Theres no supply chain in Indonesia for that at the moment. Likewise, weve seen the Indonesian Government, simply out of the necessity of saying that they want food security, put ceilings on prices. This has placed huge restrictions on importers and theyre under the spotlight from their own government to try and ensure that there is some price stability going into the Ramadan period. If youre trying to do that with the high price thats coming out of the NT, and a margin thats really not working, its pretty much impossible to bring your price down to the ceiling in that market. This plays into the favour of bringing in a replacement product to replace the expensive product that cant work, i.e. buffalo meat. This is why weve got this competitive interest thats started to grow very quickly. The other thing were contending with is a stubborn resistance by our partners in Indonesia who talk about having a self-sufficient herd. However, at the moment the decline of the Indonesian herd is set to get to zero by 2021 on present consumption figures. So, naturally the Indonesian Government who is trying to reverse this is saying lets bring in a breeder policy all of us in the Industry are across the 5:1 policy (for each five head of feeders imported, there must be one breeder); this year the statement coming from the Indonesia Government is: Were going to artificially inseminate 4 million heifers and produce 3 million calves. These statements are outlandish and we need to try and bring some reality into them. However, what this does say is that we have a fighting chance of replacing this decreasing volume on a number of fronts. Going up the coast a little further, its not just Indonesia. I will bring to your attention that we have a major risk in Vietnam. Youve all read, no doubt, about the crustacean issue going on in Sth East Qld; white spot is a real and present danger to our trade. As an example Ill go back two years to the horticulture industry; the standoff between Australia and Vietnam was that we werent going to bring in their Dragonfruit and Lychees because of potential threat to our horticulture through fruit fly. All of a sudden a fruit fly was found in SA in some of our horticultural exports as a result all 28 items were banned from entering Vietnam and have been for pretty much the last two years. Australia has now put a ban on Thailand, Vietnam and China that says that no more crustaceans will be imported into Australia from any of these countries until we find out where the white spot came from. Vietnam will sensitively look at this and say well, are we going to get into a tit-for-tat?. Believe me, there is a lot of work going on in the market access space at the embassy level to try and ensure that this doesnt become a trade war. But there is a precedent set and our beef industry is as vulnerable as horticulture. Risk 3: Competition and Point Of Difference Theres been a lot said recently in the papers about competition, and Ill say right up front that competition is here to stay, it doesnt matter what market youre in: the domestic market where beef is challenged by pork and chicken; or the international market against our beef industry competitors. For example: Indonesia has a population of 260 million people, theres little wonder that everyone is trying to get a piece of that market; weve seen Spain and a few hundred tonnes of their product get in there, and over the last couple of months weve seen New Zealand product in Indonesia, and the Americans have been there for a long time, albeit in small quantities. But Brazil, with their increased quantities are seeing these 260 million people as a real target market. In terms of Buffalo meat, I think our price and fluctuations in supply in the last 12 months have given them a free ride into the market. But thats always going to happen, weve had the Indians eyeing off Indonesia for far longer than what their entry point was in September last year. What does this mean on the ground? Indonesia requires about 600,000 tonnes of meat for its consumers; locally their own herd is on the decline but produces around 400,000 tonnes; the remaining 200,000 tonnes is supplied from Australian markets via live (130,000-140,000 tonnes) and boxed beef (approx. 60,000 tonnes). So, at one end of the scale the local herd is declining, but the consumption is increasing, which creates a natural gap particularly if that 200,000 tonnes from Australia hasnt been easily met in the last 12 months. This is where Brazil will initially target. Graph 4 shows what India has done in the last year. They went from zero to hero in four months, quickly becoming the fourth largest export destination. The suspension of Indian Buffalo meat since then has been talked about in the papers, however, theres a caveat in the clause that allows the importation of buffalo meat if theres an emergency or if theres a price requirement, and thats whats happening. The permit for Indian Buffalo meat is with one stateowned Indian enterprise: Bulog. The permit is for a total of 110,000 tonnes up until June 2017; to date (March 31, 2017) they have brought in around 60,000 tonnes. However, of this 60,000 tonnes only 23,500 tonnes has been sold, which means there is a stock of around 35,000 tonnes. The big difference between Indonesia this year and last year is that this year Indonesia has a card up its sleeve to cover the shortfall that is predicted at Ramadan: the 35,000 tonnes of buffalo meat which will be fed back into the market if necessary to stop the price fluctuations that typically happen around the peak period. What I will say is this: the uptake of buffalo meat hasnt been as rapid as we imagined, its been a steady uptake by a consumer who is still testing the product. 78 NTCA YEAR IN REVIEW 2016/17

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