Export industry weighs up options

Bob Garnant with AAPCountryman

The wait on cattle import permits to Indonesia for the April to June quarter is over for many northern Australia producers.

Indonesia's director general of trade signed off on 125,000 head of cattle last week, which will make up the second quarter permits.

However, Northern Territory Cattlemen's Association (NTCA) executive director Luke Bowen warned that Indonesia was aiming to become self-sufficient in cattle production and had publicly stated it wanted to import only 283,000 head in 2012.

Cattle producers in Australia's top end were shocked in January when Indonesia slashed the number of imports to 60,000 for the first quarter of 2012.

Mr Bowen said if Indonesia stuck to the quota, there would only be permits for 100,000 head for the last two quarters of the year.

"Last year Australia exported 410,000 head of cattle to Indonesia, down from 520,000 in 2010 and 750,000 in 2009," he said.

Northern Territory Livestock Exporters Association chief executive Kevin Mulvahil welcomed the release of the second quarter permits, but remained cautious of certainty of trade with the country.

"With the lower quota in 2012 and the manner in which import permits are released, there is much more risk for exporters," Mr Mulvahil said.

"While pastoralists have to weigh their marketing options, exporters have ships to fill, everyone is going through a re-adjustment phase.

"Preparing a ship for export is more complex than in previous years."

Kimberley cattle producer Kurt Elezovich, of Country Downs station, said many cattle would need to find a new home this year.

"Pastoralists are worried, living on the hope that Indonesia will increase their quota numbers," he said.

In the meantime, Mr Elezovich is weighing up options including infusing more Bos Taurus content into his herd to meet other markets.

"I would prefer to breed pure Brahman because of the breed's suitability to the environment, but running a straight breed is limiting our options," he said.

Mr Elezovich bought several Charolais bulls in February and said they were doing fairly well.

He said they would be trapping cattle in May but if there was no market, the cattle would be released.

"It is still a bit wet to begin our weaner round," he said.

While Australian cattlemen are considering their future, Indonesia's goal to become self-sufficient has been set for 2014.

WA Live Exporters Association chairman John Edwards said the process of self-sufficiency may lead to a shortage of beef in Indonesia, pushing up prices and causing unrest among Indonesians.

In addition, he said the permit restrictions may lead to lower cattle prices for Australian producers.

Mr Edwards said cattle that did not meet the maximum weight standard for export would be subject to local market conditions.

"While the Egypt market may take some of Australia's excess cattle numbers, any prospects for cattle shipped to the Middle East would be subject to Exporter Supply Chain Assurance System certification," Mr Edwards said.

At the 28th NTCA annual general meeting, which took place in Darwin on March 30, association president Rohan Sullivan said "the bottom line is we need something else, because the current situation is not sustainable".

"The model of sending cattle huge distances south to slaughter is a cost recovery exercise at best, and given the inevitable rise in transport costs from fuel prices, government regulation of the transport industry and, in a couple of years, the carbon tax, it is not going to stack up any better in the future," Mr Sullivan said.

"So given that many of the cost imposts are government related, why shouldn't government, either NT or Federal, kick the tin for some of the supporting infrastructure?

"General Motors has just been supported with $278 million over 10 years, and the Federal Government just gave Indonesia $20 million over four years to develop their own industry, so a slip lane on the Stuart Highway and some port infrastructure doesn't seem too big of an ask," he said.

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