Outlook Bleak for 2012 Live Cattle Exports

ANALYSIS - Reduced permits to Indonesia, rising beef prices, cattle shortages and an expanding domestic feedlot industry don't provide a rosy outlook for 2012 Australian live cattle exports, writes Charlotte Johnston, TheCattleSite editor.
calendar icon 30 January 2012
clock icon 2 minute read

Last year, Indonesia announced that they would cut 2012 Australian cattle permits, from 520,000 head in 2011 to 283,000 head in 2012, in a bid to increase the country's self-sufficiency.

Indonesia will now revise their import permits based on the domestic price of beef in Indonesia. If domestic prices rise sharply there is capacity for their trade ministry to adjust import permits to allow more cattle and beef to enter their market from countries like Australia.

Disappointingly for the industry, only 60,000 permits were issued for the first quarter 2012 and there are reports that these permits have already being used up.

With this in mind, MLA predicts that live cattle exports will fall by 31 per cent to Indonesia in 2012, and be almost 500,000 head less than the record year in 2009.

It is expected that total live cattle exports will fall by 16 per cent, taking into account the factors mentioned above.

Despite a less than favourable outlook, many in the industry are still hopeful that Indonesia may raise the number of permits, however for some this does seem a bit too hopeful.

Although season conditions, feasibility of exports to price sensitive markets and competition from slaughter markets for suitable young cattle all will play a part in the success of 2012 live cattle exports, the access to the Indonesia market is by the far the most important.

Charlotte Johnston, Editor

Charlotte Johnston - Editor

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