New post May Market Report : S.E. Asian Beef Industry

"The Vietnamese market is the stand out performer at the moment with consistently high domestic slaughter cattle prices combined with growing numbers of imports of feeders as well as slaughter cattle. This market is growing and maturing"

Dr. Ross posted: "66th Edition : May 2019.

Key Points

Indonesian fat cattle prices finally turn upwards. Indonesian lotfeeders receive a long list of bad news. Vietnam import demand strong with domestic prices holding firm.

Indonesia : Slaughter St"

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New post on Southeast Asian Beef Market Report

May Market Report : S.E. Asian Beef Industry

by Dr. Ross

66th Edition : May 2019.

Key Points

  • Indonesian fat cattle prices finally turn upwards.
  • Indonesian lotfeeders receive a long list of bad news.
  • Vietnam import demand strong with domestic prices holding firm.

Asian Slaughter

Indonesia : Slaughter Steers AUD $3.91/kg live weight (Rp9,970 = $1AUD)

At long last slaughter steer prices have stopped falling and shown a small increase during the month of Ramadan. This month has seen the rate rise to average Rp39,000 up from Rp38,000 in April. The Ramadan increase in demand is always enough to clear out any backlog of stock while providing a welcome boost to cash flow. Despite the improved trading conditions during Ramadan, importers reported that demand was less than expected with the end result being a little on the disappointing side. Nobody seems to know why this was the case, even those selling Indian beef have reported similar disappointing levels of festival demand. Importers were obviously still taking advantage of this cashflow when they imported close to 59,000 feeder cattle during May. This sharp increase above average monthly levels is also likely to reflect the expectations that feeders will soon be extremely difficult to source from northern Australia while May feeder prices remained subdued at around USD$2.65 CIF. With feeder steers landed Darwin firming to around AUD$3 per kg live weight at the end of May this CIF rate is likely to commence a steady climb throughout the rest of the year. Predictions for feeder prices after July suggest that they may rise as high as $3.50 or more which will translate to a CIF Jakarta price of between USD$3.15 and $3.50.

The long-running cartel, price fixing appeals process has finally ended with all importers now confirmed to be guilty of the original charges and required to pay the imposed fines without further delay. While I have not seen the actual documentation, earlier estimates were that the total fines added up to around USD$10 million for all importers. Considering the poor commercial environment that the industry has been experiencing, this will be an extremely serious financial strain on all parties. It will not be surprising if some more importers also decide to leave the industry permanently.

If that was not bad enough news for lot feeders, the 1 breeder for 5 feeder requirement is finally culminating in penalties being issued to those importers who have failed to comply (i.e. everyone) in the form of a denial of future import permits for a period of 12 months. Each importer has a different date for the annual renewal of their import permit allocations. My advice is that 2 importers have already reached this date during April and May. The bulk of the industry have their anniversaries arriving from August to October. All is not lost however as it would appear that while all of the existing importing companies will receive the penalty of no new import permits for 12 months, there is no restriction for new companies to apply for import permits hence it seems that there will not be any interruption in the flow of permits issued as everyone will simply create new entities, obtain the necessary permits and keep the supply chains flowing.

The 1st of June was the planned date to usher in yet another hit for the trade in the form of the new Australian Standards for the Export of Livestock (ASEL) regulations which require a reduced stocking density for cattle transported by sea. This will result in less cattle being carried on the same ships and therefore a higher freight cost per head. A 300kg feeder steer will have its space allocation increased by about 5% which might add about $20 per head to the delivered cost. It appears the implementation date has been delayed for a short period to allow for administrative matters to be put in place. When all the above factors are combined, the outlook for the Indonesian feedlot sector could only be described as diabolical. While recent statistics have shown an upwards trend in live cattle exports to Indonesia this will be short lived as a combination of the factors outlined above all collide and push our best market to its lowest point in decades.

Photo 1Photo : Despite the 1 breeder for 5 feeder target being missed there were some breeders successfully imported during the period.

Photo 2Indian Buffalo was plentiful in the wet markets but traders reported that demand was not as high as they had expected.

Photo 3Indian buffalo is thawed on the spot for buyers to take away for cooking the same day.

Photo 4Frozen Australian product also selling well in the wet markets during Ramadan

Vietnam : Slaughter Steers AUD $4.48 / kg (VND16,300 to $1AUD)

The Vietnamese market is the stand out performer at the moment with consistently high domestic slaughter cattle prices combined with growing numbers of imports of feeders as well as slaughter cattle. This market is growing and maturing just at the right time to offset some of the effects of the downturn in Indonesia market conditions. 22,000 head were imported in April consisting of 11k feeders and 11k slaughter cattle. A similarly large number were imported in May but I don’t have the actual figures for this month yet. The strong domestic economy, a totally inadequate domestic cattle herd and declining live cattle imports from its traditional SE Asian neighbours means that the gap between short supply and increasing demand continues to grow. March to the end of June is the traditional time for a seasonal surge of live imports of slaughter cattle from Laos and Cambodia but this is significantly reduced as their herd numbers have also declined. The government has initiated many projects designed to assist local farmers to breed more and more beef cattle but just like the rest of Asia, the land is too valuable to breed cattle as almost any other enterprise will generate a far better return. Breeding cattle only makes sense on poor quality land that is no good for anything else and Vietnam has very little of that.

Slaughter cattle prices are the same as last month with steers selling for about VND70,000 in the south and VND74,000 in the north. Feedlot capacity remains at around 100,000 head (after the departure of the 2 big players) which is at about 60% utilisation at the end of May. The Vietnamese press continues to publish numerous articles on the fallout of the financial collapse of the two giant feedlot projects which resulted in losses of many millions of USD$.

Prices of beef in the wet and supermarkets remains steady at the usual high rates.

The Vietnamese seem to have a high level of scammers with lots of examples of counterfeit items like buffalo meat and pork being dyed and modified with chemicals and bovine blood to look like beef. The shocker that was reported to me this month is a completely fake African Swine Fever vaccine which is being marketed as a genuine product for the protection of pigs. With ASF recently identified in Vietnam, it is hard to imagine anyone being ruthless enough to sell a desperate farmer such a vile product which can only result in further financial loss for the despairing pig producer.

Photo 5Bogus African Swine Fever vaccine.

Photo 6

China : Slaughter Cattle AUD $5.42 / kg (RMB 4.80 = AUD$)

Very little to report from the China market this month with slaughter cattle and beef prices relatively steady. The government is suggesting that the spread of ASF is now largely under control but it is the destock, clean-up and restock processes that will require a huge amount of resources and a period of several years until the pig population can recover to anything like its previous position. My Shanghai agent has reported that retail pork prices have risen by 12% during the month but this may well be just a one off movement.

Philippines : Slaughter Cattle AUD $4.74 / kg (Peso 36.3 to AUD$1)

The Filipino economy keeps on performing beautifully with the currency strengthening again this month which has caused the AUD cattle price above to increase once again even though my local price indicator remains the same at Peso172 per kg live weight. My advice is that there is a resurgence of shipments of feeder cattle being sent from Mindanao to Manila where they are fattened in feedlots and subsequently slaughtered. What is not so clear is why the importation of Australian feeders has not recommenced. If anyone can help me to understand this situation I would be happy to hear their views.

The current concern around ASF has resulted in the government banning pork imports from China and Europe for the time being and having a major crackdown on live pig and pork smuggling which is a fairly popular local pastime whenever there is a decent differential in the prices on either side of the water. My money would be on the smugglers.

Thailand : Slaughter Steers AUD $4.09 / kg (Baht 22.0 to $1AUD)

No change from last month with restrictions on the live trade into China continuing to keep a lid on demand. The increase in the AUD rate above is purely due to the strengthening of the Baht.

The Thai government has initiated a major program designed to prevent the introduction of ASF but considering their traditional live animal trading links with China and the massive numbers of Chinese tourists that come to Thailand every single day, the chances of introduction of the disease must be very high.

The Ministry of Agriculture and Cooperatives (MOAC) recently published research showing the economic damage that would accrue if an ASF outbreak occurs in Thailand. MOAC estimates that if the disease infects 30 percent of swine population, economic damage will total 21.17 billion baht (U.S. $672 million). In the scenario of a 50 percent swine infection rate, the economic damage climbs to 35.28 billion baht (U.S. $1.1 billion) while in the 80 percent infection rate scenario the economic damage reaches 56.45 billion baht (U.S. $1.8 billion).

Photo 7Photo above : Jason Hatchett sent me this photo from a supermarket in Alaska showing US Angus beef selling for AUD$31.50 for Top Sirloin, AUD$29.93 for NY Striploin and AUD$25.99 for T-bone.

My sister Lynn visited Florence, Italy during May and sent me these photos focusing on Bistecca alla Firoentina, a famous Tuscan cut of bone-in beef which must include part of the porterhouse. If you order this delicacy you need to understand which part you are getting and it is massive so you also need to organise some mates to share the meal. Originally this beef only came from the local Chianina breed but is now also sourced from a range of other large European cattle breeds.

Photo 8At Euro76.8 per kg you will need to know you are getting the very top of the range cut.

Photo 9

Photo 10This particular cut is a variation called the Fiorentina Filetto which is quite a bit cheaper.

Photo 11The traditional way to eat these monster steaks is for the chef to carve the cooked steak at the table and serve portions directly onto the diners’ plates.

These figures are converted to AUD$ from their respective currencies which are changing every day so the actual prices here are corrupted slightly by constant foreign exchange fluctuations. The AUD$ figures presented below should be regarded as reliable trends rather than exact individual prices. Where possible the meat cut used for pricing in the wet and supermarket is Knuckle / Round.

May 19 price table

Dr. Ross | June 18, 2019 at 7:31 am | Tags: beef prices, market report, southeast asia | Categories: Monthly Market Report | URL: https://wp.me/p4BVtG-nQI

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ABC News: A uni student’s journey from French Charolais stud to Australian buffalo dairy

https://www.abc.net.au/news/2019-06-01/french-agriculture-student-at-work-on-buffalo-dairy/11157020?utm_source=sfmc&utm_medium=email&utm_content=&utm_campaign=%5bnews_sfmc_rural_df_!n1%5d%3a8940&user_id=5d7a3018b83942ec9de04b04c5035760b46b4c3ead7a7d846cad361adb74bfcc&WT.tsrc=email&WT.mc_id=Email%7c%5bnews_sfmc_rural_df_!n1%5d%7c8940RuralMail_ArticleLink A French agriculture student wants her family to consider introducing buffalo on their Charolais operation after a stint on a NSW dairy.

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The Indigenous cattle company with a pioneering vision for economic prosperity – ABC Rural – ABC News

Could this model be used with buffalo?

https://www.abc.net.au/news/rural/2019-05-24/the-indigenous-cattle-company-with-a-pioneering-vision-for/11123900?utm_source=sfmc&utm_medium=email&utm_content=&utm_campaign=%5bnews_sfmc_rural_df_!n1%5d%3a8940&user_id=5d7a3018b83942ec9de04b04c5035760b46b4c3ead7a7d846cad361adb74bfcc&WT.tsrc=email&WT.mc_id=Email%7c%5bnews_sfmc_rural_df_!n1%5d%7c8940RuralMail_ArticleLink

Dr Ross Ainsworth’s Market Report

This is one piece of news from Ross’s April report that needs to be monitored:
"The important news for this month was the announcement that African Swine Fever (ASF) has been confirmed in Vietnam and neighbouring Cambodia. With a very large proportion of mainland S. E. Asian families having pigs in the back yard for waste disposal and personal consumption, the likelihood of rapid spread is extremely high. The impact on the region’s pork industry will be enormous with control measures extremely difficult to enforce given the very porous borders of the Greater Mekong region where smuggling is a way of life."

New post April Market Report : S.E. Asian Beef Industry

Dr. Ross posted: "65th Edition : April 2019.

Key Points

Major Indonesian feedlot operator closes its business permanently. Falling Indian beef prices in Indonesia providing increased competition to fresh beef. African Swine Fever spread confirmed in Vietnam and Ca"

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New post on Southeast Asian Beef Market Report

April Market Report : S.E. Asian Beef Industry

by Dr. Ross

65th Edition : April 2019.

Key Points

  • Major Indonesian feedlot operator closes its business permanently.
  • Falling Indian beef prices in Indonesia providing increased competition to fresh beef.
  • African Swine Fever spread confirmed in Vietnam and Cambodia.
  • Northern Territory wet season fails.

Asian Slaughter

Indonesia : Slaughter Steers AUD $3.78/kg live weight (Rp10,050 = $1AUD)

Prices remain weak as feedlots are still full of excessively fat, long-fed cattle which continue to hold slaughter prices down. The indicator price has dipped slightly once again to Rp38,000 per kg live weight for slaughter ox. With Ramadan commencing on 5th of May this should ensure that prices don’t fall any further and should probably firm once again towards the end of this festival month. Feedlots have not been able to empty out since October 2019 despite most subsequent months importing close to 40,000 head. March is the exception with a little over 55,000 as importers took advantage of the very cheap prices available for large numbers of drought stressed feeders from northern Australian producers. This spike in numbers makes sense as these animals will be exiting the feedlots in July after the Ramadan/Lebaran festival demand peak has cleaned out the backlog once again. Total imports for April appear to be in the 40,000 range once again so back to sensible numbers to meet the expected modest future fresh beef demand.

The competition from Indian beef appears to be ramping up as larger quantities are being offered at lower retail prices, down from Rp100,000 in the early days of supply to Rp80,000 and now Rp70-75,000 per kg boneless buffalo beef. As China has gradually closed the door on illegal imports of Indian beef, large volumes have been diverted to other markets at discounted prices with Indonesian consumers appearing to be a beneficiary of this cheaper, redirected product.

The distressed state of the Indonesian feedlot industry was highlighted during April by the closure of one of the country’s largest importer/feedlotters based in West Java. This company had two large feedlots capable of a total capacity of around 40,000 head and had been a successful operator for decades. They have already sold one location and are running down the remaining cattle in the second before permanently closing the gate there too. The entire industry is under extreme pressure as a result of a wide range of factors from Indian beef to government policies and commercial errors like importing 81,000 head last October which has effectively crushed the market from January until the present day.

The general failure of the Northern Territory wet season is complete as it is now too late for the monsoon to return so the next rain can be expected in late October/November at the earliest. This has forced the bulk of the feeder cattle to be sold off early and at low rates allowing mid-April CIF Jakarta prices to edge down further to as low as USD$2.55. This delivered price has already increased with the end of April Darwin feeder prices rising to around AUD$2.90 which will translate to a CIF of closer to USD$2.75. Those close to the northern Australian market suggest that a limited number of feeders will still be available through May and June but will become extremely difficult to source and much more expensive from July onwards.

Pic1_Hypermart BengkuluPhoto : Hypermart Bengkulu in West Sumatera with frozen boneless Indian Buffalo @ Rp80,000 per kg or AUD$8 per kg.

Pic2_Wet Market Labuan BajoPhoto : There are only two beef stalls at the largest wet market in Labuan Bajo, East Flores and this is the best one. The beef and offal is from local Bali cattle with the price of knuckle at Rp110,000 per kg or AUD$11.00.

Pic3_Bali CattlePhoto : These beautiful Bali cattle are in a backyard about 200 metres from my house in central Seminyak, Bali. Keeping Bali cattle is more of a Balinese passion than a beef industry.

Pic4_Aeon Mall SupermarketPhoto : Aeon Mall supermarket in BSD, Jakarta. Just divide the prices by 10,000 to get the approximate AUD rate so Rp42,500 = AUD$42.50. This supermarket chain has strong links with suppliers in Tasmania.

Vietnam : Slaughter Steers AUD $4.42 / kg (VND16,500 to $1AUD)

Prices for all classes of stock are unchanged from last month with the indicator rate for slaughter ox remaining at Dong 73,000 per kg live weight.

Import numbers into Vietnam continue their steady climb with almost 50,000 head imported this calendar year to the end of March. While this is an encouraging start we are still well below the performance of the trade in 2015 when 85,000 were imported for the equivalent period and the annual total was 360,000. The national feedlot capacity of about 100,000 head is currently about 50% full.

The important news for this month was the announcement that African Swine Fever (ASF) has been confirmed in Vietnam and neighbouring Cambodia. With a very large proportion of mainland S. E. Asian families having pigs in the back yard for waste disposal and personal consumption, the likelihood of rapid spread is extremely high. The impact on the region’s pork industry will be enormous with control measures extremely difficult to enforce given the very porous borders of the Greater Mekong region where smuggling is a way of life. A new FAO blockchain technology has been deployed in the Mekong Delta region in an effort to improve the communications between authorities and farmers to better manage livestock management and emergency epidemic measures.

Pic5_JBS Foods VietnamPhoto from the internet site of JBS Foods in Vietnam.

China : Slaughter Cattle AUD $5.45 / kg (RMB 4.77 = AUD$)

There has been a very slight decrease in the slaughter ox indicator rate in Shanghai to bring both report prices into line at RMB26 per kg live weight. Retail beef and chicken prices have not changed significantly since the beginning of the ASF outbreak although this situation is predicted to change in the second half of 2019 when the full impact of the national pig herd reduction hits the market. Despite the government’s bold steps to control and eradicate the disease and its facilitation of large volumes of imported pork, the crash in domestic production will still result in a gross destabilisation in the pork market later this year. With no vaccine and a virus that can last for many months in the environment, the risk of reinfection is significant and the recommended period before restocking long. All Chinese farmers operate on state owned land so when they approach the banks for finance their only asset is the stock which they wish to purchase and which are subject to potential reinfection and mandatory slaughter. As a result, many farmers are likely to leave the industry for other less risky sectors or at the very least wait until the situation has stabilised.

Philippines : Slaughter Cattle AUD $4.67 / kg (Peso 36.8 to AUD$1)

Prices for slaughter ox remain the same this month with the strengthening Peso responsible for the slight rise in the AUD price above. The Christian tradition of Lent is a period of reflection and a time for fasting and reduced festivities. The dates of observance during 2019 were between 6th of March until the 18th of April so beef consumption would have been reduced during this period. Despite this the prices for beef and chicken remained quite stable throughout April.

Although the Philippines is separated from China and South East Asia by the sea, smuggling of products from the mainland to the Philippines has long been a popular and profitable pastime. Pigs and pig products are amongst the items traditionally smuggled so the probability of ASF infection being transmitted to the Philippines is very high. If this occurs then the demand and price of beef could move even higher.

Thailand : Slaughter Steers AUD $3.98 / kg (Baht 22.6 to $1AUD)

This month saw a very large drop in slaughter cattle prices from around 98 to 90 Baht. The cause is a serious crackdown by the Chinese authorities on the smuggling of live cattle from northern Thailand into China via Myanmar on the Mekong river. These cattle are officially and legally exported from the port city of Chiang Saen in Thailand, on Laotian river boats, to river ports in northern Myanmar. Once unloaded in Myanmar, the cattle (and buffalo) are smuggled across the river into south west China where they are trucked to the regional cities of Xishuangbanna and Kunming for slaughter. This has been a huge trade in recent years but has declined as the Chinese authorities have gradually reduced the level of the global grey trade. In December 2018 I sailed down the Mekong from S W China to Chiang Saen. During that trip we passed only 5 boats so the daily traffic might be about 100 head per day, well down from the boom time estimates of 600 per day.

I am advised that a significant part of this cross-border grey trade has now been relocated to the northern border crossing of Boten in Laos. This is the location where the new belt and road Chinese railway crosses into Laos on its way to Vientiane.

Pic6_Slaughter Cattle via MekongPhoto December 2018 : slaughter cattle being legally exported via the Mekong from northern Thailand to northern Myanmar. During my recent boat trip down the river from China to Thailand we passed 5 boats carrying cattle and buffalo upstream to Myanmar. These boats were not fully loaded with plenty of spare space for more stock.

Pic7_Buffalo MyanmarPhoto December 2018 : This boat is discharging its buffalo onto a truck on the Myanmar (south west) side of the river. From here it is only a few hundred metres across the river into the south west Chinese province of Yunnan.

Pic8_Chiang SaenPhoto : when I visited Chiang Saen in July 2014 the river trade to China was booming with an estimated 5-600 head per day departing up-river for Myanmar and China.

Singapore : almost as expensive as Rome.

Singapore is one of my favourite cities except when it comes to the cost of luxury items, including beef. And you only get about 96 Singapore cents for $1AUD.

Fair Price Supermarket in Scotts Road.

  • Lean beef mince S$38 per kg
  • Grass fed ribeye S$64 per kg
  • Knuckle S$35 per kg
  • Stir fry S$40 per kg

Cold Storage Supermarket in Paragon centre, Orchard Road.

  • Organic Sirloin S$49.90 per kg
  • Stewing beef $29.90 per kg

Pic9_Fair Price Supermarket Scotts RoadPhoto : Fair Price Supermarket Scotts Road. Exchange rate about 0.96 Sing$ to AUD$1. Note the prices are per 100grams.

Pic10_Cold Storage SupermarketPhoto : Cold Storage supermarket in the Paragon centre Orchard Road.

Pic11_Cold Storage Supermarket Orchard RoadPhoto : Cold Storage Supermarket Orchard Road.

Now that’s a steak!

I played football with Ian (Foxy) Fox 41 years ago for the Cobram “Tigers” in northern Victoria. Last week Ian sent me a photo of a steak produced by his Blonde D’Acquitaine cattle bred and fattened on his Cobram property. He markets his beef through Meatsmith in Melbourne and I can’t wait to get down there to try one out, obviously with a few friends to assist.

Pic12_Photo From Ian FoxPhoto from Ian Fox : a steak from his Blonde cattle shown in the photo below.

Pic13_Cattle in CobramPhoto from Ian Fox : some of Ian’s Blonde D’Acquitaine cattle in Cobram, northern Victoria. And these cattle are located in an area experiencing a severe drought.

These figures are converted to AUD$ from their respective currencies which are changing every day so the actual prices here are corrupted slightly by constant foreign exchange fluctuations. The AUD$ figures presented below should be regarded as reliable trends rather than exact individual prices. Where possible the meat cut used for pricing in the wet and supermarket is Knuckle / Round.

English April 19 price table

Dr. Ross | May 13, 2019 at 4:01 am | Tags: beef prices, market report, southeast asia | Categories: Monthly Market Report | URL: https://wp.me/p4BVtG-nQn

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Batchelor Abattoir

On Friday the NTBIC met with Central AgriGroup’s Plant Manager and Group Compliance Manager, responsible for finalising all of the arrangements to open the Batchelor Abattoir for processing of buffalo, cattle and donkeys from 01 July 2019. The abattoir is expecting to recruit a workforce of 60 skilled processors and will be initially seeking Tier 2 accreditation to give it greater market access. Shade and water sprinkler facilities are currently being erected at the holding yards. The Plant Manager has confirmed that once processing gets underway the abattoir will receive buffalo throughout the month. A reminder to producers that buffalo must be tipped and tagged on delivery.

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