Cattlemen concerned after falling demand from most important market

WA’s northern live cattle industry is bracing for a tough year after prices plunged by a third amid concerns about COVID-19 impacting demand from Indonesia. Export cattle prices have fallen by 35 per cent since their highs two months ago, despite the start of Ramadan, which is normally peak demand. A report by Meat and Livestock Australia said a shutdown of food service outlets, reduced consumer spending and a nationwide restrictive measures had caused a demand shock that could not have been foreseen two months ago. MLA said March live cattle exports to Indonesia — Australia’s most important market — were 34,000 head, down 41 per cent on March last year. A combination of high Australian cattle prices earlier in the year and a weak Indonesian rupiah also contributed to the decline. There had also been COVID-19 shut downs in abattoirs, and slaughter rates were down by 30-50 per cent, MLA said. Perth-based International Livestock Exporters managing director Mike Stanton said demand was expected to weaken further after Ramadan and into the months ahead, because of the COVID-19 pandemic. Mr Stanton said several importers had renegotiated supply contracts given the steep fall but he was not aware of others cancelling under force majeure since major importer TUM cancelled a Frontier shipment from Darwin in early April. Kimberley Pilbara Cattlemen’s Association chief executive Emma White said a factor working in northern pastoralists’ favour was disruptions in the Indian buffalo trade. She said with people still needing to eat, there was some support for Australian cattle in the absence of its major competitor. Ms White said pastoralists would watch closely Indonesia’s ongoing handling of COVID-19 and how demand evolved. “Although there are comparisons with 2011 about the severity of price falls, the reality is they’ve fallen from near-record extra high levels earlier in the year, when less cattle were on the market,” she said.