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

Dr. Ross posted: "67th Edition : June 2019.

Key Points

Strong Indonesian feeder imports in June stocking up for the lean second half of 2019. Indonesian supplies of Indian beef dry up.

Indonesia : Slaughter Steers AUD $4.06/kg live weight (Rp9,850 = $"

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New post on Southeast Asian Beef Market Report

June Market Report : S.E. Asian Beef Industry

by Dr. Ross

67th Edition : June 2019.

Key Points

  • Strong Indonesian feeder imports in June stocking up for the lean second half of 2019.
  • Indonesian supplies of Indian beef dry up.

June_Asian Slaughter Steer 2019

Indonesia : Slaughter Steers AUD $4.06/kg live weight (Rp9,850 = $1AUD)

Importers had a better month during June with a slight rise in slaughter cattle prices and the disappearance of Indian buffalo beef from competitors shelves. Traders report that the slaughter steer price has eased up to Rp40,000 or more but I have used 40k as the indicator price for this month. Importers noted that the demand for slaughter cattle did not drop off immediately after Lebaran as it traditionally does. Traders also reported that Indian buffalo beef began to get short towards the end of the festival so this might explain the sustained demand for fresh beef through all of June.

I have correction to make as I recently reported that the government had stopped importing Indian buffalo beef but they have clarified (through press articles) by saying that imports are still continuing but the volumes were quite low. They did not offer an explanation why they have allowed stocks to get so low. Even those with connections into Bulog say that nobody can explain the shortage of supply except to say that more imports are on the way and expected to hit the market in mid-August. One possible explanation is the recent Foot and Mouth Disease (FMD) initiatives by India in which they have had their official FMD control program endorsed by the OIE. I am guessing that part of this official program would be declarations of the FMD status of all of India’s states/areas. In April 2019 Rabobank produced an analysis of the Indian Buffalo beef industry in which they reported that the only Indian states which were FMD free with vaccination (and therefore safe to import from) were Maharashtra, Telangana and Andhra Pradesh where only 20 of the 75 APEDA approved export slaughterhouses are located. If the Indonesian buyers were suddenly restricted to purchasing from only those states free with vaccination then this might well have caused a reduction in their capacity for supply in the short term and possibly explain the current shortfall in import volumes.

David Heath was recently travelling in the east of Bali when he came across a large truck filled with live buffalo heading west. His driver advised that they were probably from Lombok and heading for Surabaya. This unusual livestock movement would fit with the shortage of buffalo beef in Java.

Another rumour from the traders is that the government will soon issue import permits for frozen beef from Brazil and Spain. This is supported by the fact that representatives from Brazilian beef exporters were in Jakarta only a few weeks ago.

June feeder imports were almost 60,000 head following a similar volume in May. Importers are stocking up with cheaper feeders knowing that the price in northern Australia is about to rise but they may also be motivated by the approaching import permit problems when their annual review comes around in a few month’s time and they fail their 1 breeder for 5 feeder target. We assume they all have the option of creating a new company to get around the problem but perhaps the process is not so simple for all the importers. Feeder prices in northern Australia have not risen as quickly as predicted so this will also be encouraging importers to stock up before the last of the feeder cattle stocks run out. Feeder rates at the end of June were holding steady at about AUD$2.90 delivered Darwin. Reduced supplies and a surge in prices are now expected to appear in late July or August.

Simon Quilty produced the graph below in his drought article early in June showing the record slaughter rates for the Australian cow herd. When the rain does finally come and the drought is broken, the drop in supply will be swift and rise in prices very sharp. $4 per kg for feeders?

Picture1_GraphGraph from Simon Quilty, June 2019.

The planned Australian government reduction in stocking densities on livestock vessels has been delayed further but is expected to be introduced soon with the Department advising exporters that they will get at least 10 days notice of the new enforcement date in order to plan future livestock deliveries.

Picture2_Psr. ModernPhoto above : Knuckle in the Pasar Modern in BSD City, Jakarta. Rp130,000 per kg as usual.

Picture3_Giant SupermarketPhoto : knuckle at the Giant Supermarket BSD City. Rp195,500 per kg – no more discounts now that the Indian beef competition is gone.

Picture4_Buffalo meatPhoto : traders reported that frozen buffalo began to run short towards the end of Lebaran.

Vietnam : Slaughter Steers AUD $4.51 / kg (VND16,200 to $1AUD)

Little change in the Vietnamese market rates with the rise in the AUD price of slaughter cattle above due only to the exchange rate movements. Beef prices in the retail markets also remain steady despite the disruption created by the ASF outbreak.

Vietnam has recently been unfortunate to have outbreaks of both ASF and FMD. See the map from Rabobank below. Vietnam announced its first detection of ASF on February 19, 2019. As of June 17, 2019, the disease spread to 58 out of 63 municipalities and provinces across the country with 2,637,051 pigs depopulated, equal to nearly 9.4 percent of the country’s total swine population. As of June 4, Vietnam’s Ministry of Agriculture and Rural Development (MARD) estimated ASF damage at VND 3.6 trillion ($154.8 million). This information comes from the recent US GAIN report.

After 9 years of negotiations, Vietnam and the EU signed a Free Trade Agreement (FTA) on 30th June 2019. Only a small amount of meat and milk are imported from the EU at the moment but this is expected to increase significantly when the tariffs are cut from their current setting to 0%

Picture5_OutbreaksSource Rabobank 9th April 2019.

Picture6_VietnamPhoto from the Vietnamese press : There are always lots of press articles every month highlighting how government policies are continually at work to encourage the breeding of local cattle. The results are the same as everywhere else in Asia, disappointing.

Picture7_VinMartPhoto from the massive number of very professional online beef sales sites in Vietnam. Dui bo is knuckle and Dong 289,000 per kg (AUD$17.84) is a similar rate reported by my agent in Ho Chi Minh City.

China : Slaughter Cattle AUD $5.38 / kg (RMB 4.80 = AUD$)

Prices of beef and slaughter cattle are static in both Beijing and Shanghai. My agents have noted a rise in the pork price in Beijing this month while a rise of about 12% in Shanghai was observed last month. Perhaps this is the beginning of the major price adjustment that has been predicted as a result of the African Swine Fever (ASF) outbreak.

Rabobank forecasts that pork production could drop by 25-35% in 2019 with China’s hog herd to drop by 30-40% (150 million pigs). Consumer substitution for the shortfall is mainly with poultry and seafood but beef will also get a useful share. Their report predicts that despite strong growth in production and imports of other proteins there will still be a supply gap of 6 to 11 million tons in 2019. And import sources from Europe are at risk with ASF outbreaks in Belgium now 1km from the French border, 45km from Germany and 150km from the Netherlands.

There are so many changes going on in China that it is truly impossible to make any accurate predictions. For example, Simon Quilty produced an article explaining the Chinese advice on how and when to apply for tariff exemptions for a wide range of goods including beef, pork, chicken etc, a total of 492 items on the list. At the same time China has placed a ban on all pork imports from Canada as a response to the discovery of ractopamine (Paylean) in processed pork imports. Canada does not use Paylean. But Canada does have some serious diplomatic problems with China arising from the arrest of a senior executive of Huawei. On the 3rd of June China put in place a temporary ban on Brazil beef exports due to an atypical case of mad cow disease found in Mato Grosso state – shipments after May 31st have been temporarily banned. And who would like to predict the content or outcomes from Mr Trump’s next late night trade negotiating tweet? Pure chaos.

Picture8_China SupermarketPhoto : Chinese supermarket mixed beef selection.

Philippines : Slaughter Cattle AUD $4.79 / kg (Peso 35.9 to AUD$1)

Cattle prices are steady with the change in the Peso against the AUD causing the price above to move to extreme levels. The economy is good and the recent seasons have been very favourable, a claim that has not often been possible about the Philippines.

Thailand : Slaughter Steers AUD $4.30 / kg (Baht 21.5 to $1AUD)

Feedlot inventories are down in Thailand as a result of a sustained period of low demand resulting in a reduced supply which has now flowed through to the butchers who have pushed prices up again in order to keep their customers supplied.

Picture9_BangkokPhoto from Chris King : Klongtoey is the main wet market in Bangkok where the current price is 210Baht per kg (AUD$9.77) for trim and 220 (AUD$10.23) for the better cuts.

Picture10_AustraliaPhoto from Chris King : Tops supermarket in Sukhumvit selling Aussie beef mince for Baht 750 per kg or AUD$34.88 – and that’s a sale price!

Picture11_Bangkok SwalayanPhoto from Chis King : Tops supermarket in Bangkok, Grain fed Aussie Angus Rib Eye selling for Baht2,250 per kg or $104.65 per kg. This 176gram steak costs AUD$18.42.

Picture12_MyanmarThis interesting article above comes from the Myanmar Times 6th June 2019. The national herd numbers provided at the bottom of the article are much lower than earlier figures. If those numbers are correct then it is no wonder that the government is keen to promote an increase in cattle production.

My sister Tracey was in the south of France in June and took these photos at the local supermarket.

Picture13_PerancisPhoto from Tracey : Cote de Boeuf translates to rib steak with a price of Euro19.99 or AUD$32.24. Looks like a much better deal than the Bangkok rib eye above.

Picture14_RabbitFarmed rabbit for Euro9.50 or AUD$15.32 per kg. Now that is what I call good value, way in front of the outrageous prices in Australia.

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.

Ind_June 19 price table

Dr. Ross | July 17, 2019 at 6:17 am | Tags: beef prices, market report, southeast asia | Categories: Monthly Market Report | URL: https://wp.me/p4BVtG-nR1

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Landbridge Group and NT cattlemen mustering plans to export Territory beef to China – NT Country Hour – ABC Radio

https://www.abc.net.au/radio/programs/nt-country-hour/landbridge-group-and-ntca-plans-to-export-nt-beef-to-china/11300252?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

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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