Beef export issues: Australia and South Korea

Jan 13, 2012

In late December, the Indonesian Agriculture Ministry announced it would halve the 2011 import quota of live cattle from Australia for 2012. The significant cutback on imports of live Australian cattle has been called retaliatory to Australia’s recent temporary month-long ban on live cattle. Other sources claim it is just a step towards Indonesian livestock self-sufficiency.

Australia halted live cattle exports to 11 Indonesian slaughter houses for a month in the early summer of 2011 following allegations of cruel and inhumane treatment. Abuses cited included physical abuse such as hitting and kicking cattle, intentionally causing injury, improper stunning, using dull knives for throat slitting and bleeding conscious animals.

Wind of the abuses garnered the attention of Australian consumers and animal advocates who pushed for a complete abandonment of the live cattle trade to Indonesia. Though a motion to officially phase out Australian live cattle exports failed, infrastructure focusing on chilled export of beef is in place which could result in a natural phase out of live cattle export.

The allegations of abuse concerned some Indonesian consumers as well.

Indonesia is the world’s most populous Muslimmajority nation and Islamic law requires humane “halal” slaughtering of animals for meat. Indonesian consumers questioned “halal” packaging of meat and the quality of oversight by religious officials if such abuses were occurring.

The Indonesian Agriculture Ministry claims its late-December decision to reduce imports of Australian live cattle was not retaliatory. Instead, the ministry claims the move is a step towards Indonesian livestock self-sufficiency. Though there are some Indonesian critics, the move does appear in keeping with the country’s various attempts towards livestock self-sufficiency since 2005.

The import cutback was an unpleasant shock to Australian cattle farmers. Australia’s live cattle trade for 2011 was valued at $734 million U.S. Indonesia represents 60 percent of the market for Australian live cattle.

South Korea is planning to begin exports of Korean Hanwoo beef in the near future. According to South Korean Agriculture Minister Suh Kyu-yong, the successful export of higher priced Japanese Wagyu beef coupled with excessive domestic supply has prompted the decision.

The minister said the decision will take some time to enact, however. Improvements to the Hanwoo breed and the creation of a recognizable South Korean brand will need to be accomplished prior to establishing a successful export market.

Plans to export beef come with some criticism. Farmers blame the “abnormal” distribution system with its numerous middlemen for unnaturally increasing consumer price for beef while keeping the price paid to the farmers low. Since high consumer prices cause reduced consumer demand, farmers worry about their ability to make a living.

To address the concerns of farmers, Suh says there are plans to consolidate the country’s 86 butchering facilities down to 36 centers which can slaughter, dress and market beef domestically and abroad. The move is expected to reduce the current five-step distribution process to three steps which should reduce consumer prices. — Kerry Halladay, WLJ Editor