Article – Indonesian Beef Boom

6 March 2014
Brad Cooper
North Queensland Register

INDONESIA has the potential to be Australian beef’s new Korea.

That assessment was provided to those at the Northern Beef Roundtable in Broome on Friday by MLA’s Dr John Ackerman, who said Indonesia’s economy was growing strongly, consumer confidence was on a high and demand for beef was soaring in all sectors, particularly the restaurant trade.
Those factors would help Indonesia climb to become Australia’s third biggest beef-export market, pushing out Korea, where exports have been sluggish for some time.
Dr Ackerman’s upbeat assessment followed Federal Agriculture Minister Barnaby Joyce’s welcome of the 240 delegates to the new Broome Civic Centre, in which he pledged to get the beef trade with Indonesia back on track after the disaster of Labor’s Joe Ludwig suspension of the live trade in 2011.
Mr Joyce said northern Australia was closer to Indonesia and other near-SE Asian markets with hundreds of millions of consumers than the population centres of south-east Australia with fewer than 20 million.
The links were “obvious and historic”.
Deputy chairman for investment promotion with the Indonesian Investment Co-ordinating Board, Himawan Hariyoga, said his country was looking to invest in beef supply from Australia – both directly and in joint ventures. While there were challenges to doing business with Indonesia, he urged industry to persevere in developing strong, long-term relationships.
National Australia Bank’s chief representative in Indonesia, Dean Horton, said beef consumption in Indonesia was headed strongly up from the current 2kg/year per capita and this offered tremendous two-way investment opportunities.
“Indonesia is looking for food security and importantly, reliability of suppliers and price stability,” he said.
“For northern beef producers and the broader industry, this means opportunities for investment in breeding properties in Australia, investment and joint ventures in vertically integrated feedlots and abattoirs and supply chains in Indonesia.”
He said Indonesian investors included existing food supply companies, professionally managed funds, and wealthy individuals or sophisticated investors looking for opportunities and diversity.
West Australian Department of Agriculture and Food director-general Rob Delane said it was tremendous to have four agriculture ministers – Federal Minister Barnaby Joyce, WA Minister Ken Baston, NT Minister Westra van Holthe and Queensland Minister John McVeigh – at the Broome beef roundtable.
“The attendance of the four ministers underlined the importance now being placed on the development of the northern beef industry.”
The four governments were working co-operatively to double the value of the beef industry across northern Australia.
Former MLA chairman and NFF president David Crombie said that from what he heard at the meeting, the outlook for live cattle exports was “very good”.
“We’ve got $2.30 (a kilogram for boat trade) and a wet season (in northern WA) – it’s not often you get that quinella,” he said.
Putting his AACo board jersey on, Mr Crombie said the company’s Darwin abattoir was on track – expected to produce its first box of beef in August – and his view was that the plant would focus on processing older cattle.
“My view is that younger cattle should go on boats, because they travel better … older cattle go in boxes,” he said.
All speakers agreed the industry had a great story to tell.
Entrepreneur and advertising agency head Harold Mitchell said the next century offered wonderful opportunities for Australia in Asia – which accounted for half the world’s economy and a huge growing market for food products.
Mr Mitchell, who has substantial personal investment in the northern beef industry with stations covering 800,000ha in the Kimberley, said the industry had faced enormous challenges, but now was not the time to panic because the future was sound.
“This will be our century.”
Queensland Agriculture Minister John McVeigh told the forum it was heartening to be one of four like-minded ministers focused on doing all they could to work with all sectors to develop the northern industry.
“We all need to move on from what went wrong under the former government. We do need to move on and be involved in mapping the future for this great industry.”
Courtesy of the North Queensland Register