Territory Stories

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

Details:

Title

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

Collection

Northern Territory Cattlemen's Association yearbook; Reports; PublicationNT

Date

2017

Description

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

Language

English

Subject

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

Publisher name

Northern Territory Cattlemen's Association

Place of publication

Darwin

Copyright owner

Check within Publication or with content Publisher.

Parent handle

https://hdl.handle.net/10070/304642

Citation address

https://hdl.handle.net/10070/363392

Page content

South East Asian Markets (and probably many other things); in South East Asia there is a lot of product (live and frozen); theres thousands of kms of geographical opportunity to move the product across; and theres endless flexibility and ingenuity to overcome whatever obstacles may get in the way, not to mention the win-win situation of the parties on both sides of the border the only people who may lose out in this situation are the governments who dont get tariff payments. As a result governments sometimes legalise the movement of product, which were previously illegal. For example, China has recently allowed Brazilian beef into their market and probably arent far off from letting the uS back in. The way I see it, Brazil and the re-entry of the uS doesnt really represent new competition its simply product being re-routed uS meat is coming in through Hong Kong already. Additional demand from China will need to be filled by new production from wherever it needs to come from (Australia, uS, Brazil, India etc). This graph is a representation of the spending power of China in 2015 compared to what is expected in 2030 (see Graph 2). Most of the focus so far has been on the expanding middle class who are very important and are a huge market but I think the more interesting market is the really rich people (equivalent of earning $40,000 uSD a year the average Australian wage). In 2015 these people represent only 3%, however this is predicted to increase to 15% (200 million people) these people will be rich enough to buy the same meat as you and me. I think this will translate into a huge amount of new business and could equate to around 12 million slaughter cattle or 36 million breeders (assuming that 200 million people eat an additional 10kg of beef annually). Brazil is probably the only place on earth that has the scope to expand out to 36 million head, but even Brazil will not do that in a hurry. In 13 years time there is likely to be a large lag phase as supply tries to catch up with the demand of this much larger rich population in China. The Brazilian beef in Chinese supermarkets is largely a low quality product and is selling at discounted prices. The immediate question that comes to my mind is why would Australia want to compete with the very cheap product coming out of Brazil when it could be competing with the likes of the Killara product from Australia, which is what I buy in Jakarta and its fantastic ($40 a kg). Why would you want to compete with the low end of the market against all of the other low-cost competitors around the world when you can sell the best? Indonesia There are a lot of positives about Indonesia; theres a clear segment in the market where the consumers clearly recognize what they are buying. It would be a bit easier for them if it was labelled but, from what I see, they are able to determine whats fresh and whats frozen - they dont like buying frozen meat, they like it fresh. But the manufacturing and the food service markets are very happy to buy frozen Indian product so its taken over a very large chunk of the market. There is still strong demand for fresh product at the same price. Despite all the issues in Indonesia their GDP continues to grow at about 5%, its pretty strong. The population growth is also still going well. Their beef herd is under great pressure but they have also opened East Java for feeder trade. One of the positives is that at the moment Australian live cattle are only able to be exported into West Java or Sumatra. Two months ago East Java, which is the traditional cattle centre of Java - opened the market after a 10 year closure. I can only assume this happened because they are short of breeders and feeders. 39 million people live in East Java so there is scope for additional product to go in there and this market could make up for the 50% that may have been lost to Indian beef. The 5 in 1 breeder story isnt really developing yet, theyve brought in their feeders and they have the obligation of also taking breeders as yet nothing much has happened yet. There is one program that is under the Red Meat Partnership and run by Dick Slaney, which demonstrates the performance of Australian breeders under a range of different conditions in Indonesia. His group is doing a mighty job and Graph 1: Chinese Spending Power 86 NTCA YEAR IN REVIEW 2016/17


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