Tri Listiyarini, Jakarta – A wide gap has emerged between import costs and the government's cattle price cap, with Australian feeder cattle priced at Rp 81,658 per kg, roughly 40% above the official benchmark, raising the risk of beef inflation in Greater Jakarta.
Data from the Agriculture Ministry's Directorate General of Livestock and Animal Health shows imported Australian feeder cattle averaged Rp 81,658 ($4.75 or AUD 6.63) per kilogram of live weight as of April 20, well above the official purchase reference (HAP) of Rp 56,000-58,000 per kg at the feedlot level.
The pricing reflects an Australian free-on-board (FOB) price of $4.32 per kg, with freight at $0.15 and insurance at $0.07, bringing the cost, insurance and freight (CIF) value to $4.53 per kg. Using an exchange rate of Rp 17,150 per dollar, landed costs in Indonesia reach about Rp79,666 per kg before handling costs and losses.
A breakdown shows female feeder cattle priced at Rp 77,177 per kg, while male cattle reached Rp 86,139 per kg. For steers, landed prices alone have climbed to Rp 84,038 per kg, underscoring the widening gap with domestic price caps.
Agriculture Ministry Livestock and Animal Health Director General Agung Suganda said the domestic cattle industry remains structurally constrained, with around 90% of production handled by smallholders who typically own just two to four cattle per household. Many still treat cattle as savings rather than a profit-oriented business, while facing high inter-island logistics costs and volatile feed prices.
"On the other hand, there is still a significant supply gap that makes Indonesia dependent on imports to meet domestic demand. There is a 30-40% supply gap currently filled through imports. And at present, 100% of Indonesia's feeder cattle imports come from Australia," he said.
Despite strong long-term demand, supported by a large population and relatively low beef consumption of around 2.7 kg per capita annually, local supply continues to lag.
Indonesia's cattle population stood at around 13.5 million head in 2024, including 755,000 buffalo, with total beef production reaching about 515,000 tons.
"To increase population, we are strengthening farmer capacity through training and institutional support, while also encouraging investment in both dairy and beef cattle, including imports of superior breeding stock," Agung said, adding that more than 150 private livestock companies have been involved in supporting breeding programs.
Officials are now weighing a revision to the government's cattle price reference as import costs continue to climb.
Livestock Processing Director Makmun said current feeder cattle prices, around $4 per kg for heifers and $4.56 per kg for steers, are well above historical levels that rarely exceeded $3.5 per kg.
"This is a difficult position because our reference price is capped at Rp58,000 per kg, while the purchase price faced by businesses is already very high. This is a warning for all of us," he said.
The Agriculture Ministry and the National Food Agency are currently reviewing the price cap to bridge the gap between rising import costs and domestic regulations.
"If we suppress prices too much, there is a risk that importers will stop purchasing. That could lead to shortages," Makmun said. "If there is no stock but businesses are forced to sell at the current reference price, that would be even more dangerous."
The impact is expected to be most pronounced in regions that rely heavily on imported cattle.
"Outside Java it still looks relatively safe. But areas that rely on imported cattle, especially Greater Jakarta, will likely see price increases," he added.
Source: https://jakartaglobe.id/business/imported-australian-cattle-prices-jump-40-above-ca