Retail outlets selling meat in Indonesia
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1 Retail outlets selling meat in Indonesia Thünen Institute of Farm Economics Rome
2 Contents The project behind the findings Retail Production Transport Slaughter Conclusions Page 2
3 Where my information comes from Benchmarking the Beef Supply Chain in Eastern Indonesia 1. Duration: May 2008 October 2010 (2.5 years) 2. Funding agency: Australian Centre for International Agricultural Research (ACIAR) 3. Project coordination: - Charles Sturt University, Orange, NSW, Australia - in cooperation with agri benchmark 4. Indonesian partners: - ICASEPS (Bogor), - 3 Assessment Institute for Agricultural Technology (AIAT, BPTP) in regions NTT (West Timor), NTB (Lombok, Sumbawa), South Sulawesi 5. Funding: Approx. 500,000 AU$ 6. Final report: Page 3
4 The project regions and proportion in total cattle numbers South Sulawesi Sulawesi Selatan 6% Jakarta East Java Jawa Timur 23 % NTB 5% NTT 5% Page 4
5 The retail market is bipolar: (1) wet markets Wet market Surabaya Wet market Jakarta (high end) Page 5
6 Hygiene is major consumer concern consumer preference index for improvements Weighted number of ranks 1-5 relative to total replies) replies 166 replies 229 replies 42 replies 192 replies 768 replies 215 respondents 768 replies out of a potential maximum of Other cuts More processed beef 200 Specialties 100 Better availability Better hygiene 0 NTT NTB SU EJ JKT Total Page 6
7 (2) Supermarkets are a growing element Market share approx. 30 %, top 3 have about 80 % market share Traditional cuts and preparations dominate Western style quality schemes and cooking methods not common Page 7
8 Retail losses and investment needs The losses No cooling Hygiene is main concern of consumers Beef is sold fresh, directly after slaughter low quality The investment needs Capacity building Handling, cooling and cleaning facilities Link measures to slaughter and transport Wrongly equipped cool shelves Fridge / freezer temperatures too high Page 8
9 Production: feed is a critical issue Page 9
10 Performance is behind potential Cow-calf Finishing Calf mortality No. of calves weaned per 100 cows Live weight sold per cow Daily weight gain Final weight Carcass yield Farm name Farm type % No. kg g per day kg CW % ID-INT-IRR Intensive, irrigation 4% % ID-INT-DRY Intensive, dryland 8% % ID-SEM-IRR Semi-intensive, irrigation 12% % ID-SEM-DRY Semi-intensive, dryland 10% % ID-EXT Extensive (grazing) 8% % Page 10
11 Production losses and investment needs The losses Sales are done when cash is needed resulting in low sale weights - final weights < 300 kg Productivity below breed potential - daily weight gain < 400 g Low calf crop <70 %, high calf mortality 8-12%, low weights produced per cow Feed quality and quantity (in drought periods) insufficient Slaughter of female cattle due to high demand shrinking beef herd Very low labour productivity The investment needs Micro-credits to address cash issue Capacity building New feed varieties addressing drought Feed storage facilities and feed conservation Crosses with Bali cattle (once feed is sufficiently available) Page 11
12 Transport from NTT to Jakarta: a long way of more than 2000 km to slaughter Jakarta Kupang NTT Page 12
13 Transport losses and investment needs The losses > 14 days from Kupang to Jakarta Inadequate ships and loading facilities Lack of water and feed (quantity and quality) Mortality (1-2 %) and weight loss (12 %) Animal injuries and suffering Total industry loss for transport NTT- Jakarta p.a.: USD 5 million The investment needs Eat cattle regionally Port and road infrastructure Cooling facilities and transport Training and capacity building Page 13
14 Slaughter another example of bipolarity Traditional Modern (for supermarkets) Upgraded, but rejected Page 14
15 Slaughter losses and investment needs The losses Not so many they use everything Animal distress Negative impact on beef quality Hygiene issues The investment needs Handling and slaughter equipment Capacity building and training Cooling capacity Page 15
16 Conclusions Biggest investment needs: - on farm: productivity increases and cash issue - beyond farm: hygiene (handling and cooling) Policy must address drivers (cash requirements) instead of acting with production and trade restrictions Capacity building in combination with capital investments required If investments shall result in practice change, market participants must see a benefit which is mostly but not exclusively economic / financial Local habits / attitude / culture / incentives must be reflected and moderated between stakeholders and investor if achievements shall be long-term Page 16
17 agri benchmark passionate about facts Thünen Institute of Farm Economics Bundesallee 50, Braunschweig Germany Tel.: Fax: Internet:
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