Live-ex prices drop; how Indo demand is shaping up for 2023

There was an uptick in feeder cattle leaving Darwin through December but business has been quiet across all northern ports since and prices on offer are coming back significantly.

Nutrien's latest offer is just $4.20 a kilogram for Brahman feeders steers, 280 to 380 kilograms ex-Darwin, and $3.90 for heifers, which compares to rates in excess of $5 being offered for the same article in early December.

Darwin shipped 35,289 head in December, mostly feeders to Indonesia but cattle also went to the Philippines and Brunei; and that figure includes some buffalo sent to both Brunei and Indonesia.

It was a busy finish to the year and came on the back of Indonesian feedlots looking to lock in cattle ahead of the Islamic Eid festival.

In total, Darwin Port in 2022 shipped 236,558 livestock - 225,782 cattle and 10,776 buffalo, with Indonesia taking the lion's share and Vietnam leading the rest of the pack.

Darwin contributed most to the total numbers exported across the country in December, which was just over 58,000.

That Darwin total for 2022, however, is down on 2021 volumes, which finished at 294,288 head and under the five-year average of 356,000 head.

Volumes out of Darwin have only been above 400,000 three times in the past ten years, with the big volatile swings more pronounced in Queensland.

By comparison, for 2022 Broome shipped 82,587 cattle, with Townsville at 61,655 and Wyndham at 20,251. Fremantle's supply totalled 26,169 head.

Speaking from Jakarta where he was meeting with importers, Australian Livestock Exporters' Council chief executive officer Mark Harvey-Sutton said a number of factors were playing into how demand for live-ex cattle would travel over the next few months.

In Indonesia, which is our largest customer, there was increased turnoff of local cattle, he said.

"There is strong consumer demand for beef overall, and Australian beef is always highly desired but we do have to be conscious of the amount of beef currently in this market," Mr Harvey-Sutton said.

"That includes a stockpile of Indian buffalo meat which needs to work its way through the market.

"Having said that, as the December figures show, there is still a need for Australian cattle to maintain supply.

"The other thing at play at the moment is the weather in northern Australia and how that will impact supply and prices."

Flooding in the Kimberley in Western Australia has affected tens of thousands of head of cattle, most of them produced for the live export market.

"Anecdotally, there seems to be still some capacity within Indonesian feedlots - whether that is taken up depends on what consumer demand dictates," Mr Harvey-Sutton said.

Australian Community Media journalist Mark Phelps, who has just returned from a visit to Indonesia, said the strategy of local farmers appeared to be to sell sick animals before they died but keep cows and hope they recover.

Farmers reported the value of what they were selling had fallen by as much as 80 per cent, Mr Phelps said.

However, he felt the high price of Australian cattle was also still a key limiting factor.

"It is a developing country with relatively low household incomes and these are still record prices for Australian cattle," Mr Phelps said.

"That obviously flows through from the importer to the consumer."

At some point, as animals recover and vaccination is rolled out, there will be a need to rebuild stock numbers in Indonesia, keeping in mind the long-term commitment of their government to be self-sufficient.

Mr Phelps said it would likely take aid or subsidies to make that happen.

But undoubtedly once that process begins, it will also affect demand for Australian cattle, this time in a more positive manner.

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Meanwhile, exporters expect the trend of Indonesia taking a broader range of animals to continue and are encouraged by that development.

Northern Territory Livestock Exporters Association chief executive officer Tom Dawkins said the fact some older, heavier cattle, and buffalo, have been included in the mix in recent times shows the resilience and maturity of appetite for Australian stock.

"It has ensured volumes have been maintained by providing some relief to the spikes in prices for traditional high Brahman content feeder cattle while Australia's supply has been tight," he said.