For a predominantly Muslim country like Indonesia, beef plays a significant role in their culture. It is an ingredient that is commonly used in many of their traditional dishes, such as rendang (beef braised with coconut milk and spices), bakso (meatball) soup, and semur (beef stew). In fact, beef consumption has been recorded to spike across Indonesia especially during their festive seasons, such as Ramadan and eid-al Adha. Beef has become an important source of protein in Indonesian diets, representing almost 15% of per capita meat consumption, which is the highest share across Southeast Asia.
As a staple ingredient in the diets of many Indonesians, the country’s demand for beef has been growing at steady rate since 2013. The Indonesian government recently implemented a retail beef price ceiling to ensure its affordability and accessibility for consumers. However, the local beef industry is only able to meet around 60% of the domestic market’s demand, leaving the Indonesian beef market highly dependent on imported feeder cattle from India, Australia, and even Brazil. This gap in the market presents prime investment opportunities in the Indonesia cattle, alongside risks as well.
As the demand for beef continues to grow across Indonesia, there lies an opportunity for investors to establish themselves as pivotal players in the local meat production industry. One way in which investors can do so is by exploring potential partnerships with local farmers and key industry stakeholders, who can share their valuable knowledge and existing infrastructure. Investors also have much to learn from local communities, who can provide their expertise on the current structure of the market, crucial supply chains, and sustainable business practices in the industry. All of which are essential in reinforcing the sustainability of the investment.
Once investors have the right knowledge and partnerships to get their cattle farming business off the ground, they can now explore modern cattle farming techniques and innovative technology to help improve their productivity and efficiency. This includes adopting new breeding methods, sustainable practices like rotational grazing, disease management practices, and more.
However, opportunities for growth in cattle farming for meat production also come with risks. One of which is the outbreak of highly infectious viral diseases that threaten the lives of cattle and other livestock, such as Lumpy Skin Disease (LSD) and Food and Mouth Disease (FMD). While these are non-fatal to humans, they pose a high-risk threat to livestock. In September of 2022, the Indonesian government reported a Food and Mouth Disease (FMD) in 24 out of 34 provinces across the country, forcing many farmers to slaughter their own livestock. The spread of these infectious diseases can be attributed to limited veterinary services, outdated breeding practices, and poor management practices across cattle farms.
Beyond the threat of such diseases, another factor that poses a risk to investing in cattle for meat production is the infrastructure of the Indonesian livestock industry. Given the archipelagic nature of the country, transporting cattle farming supplies can be challenging. There is a great need to develop proper infrastructure across Indonesia to hasten the transportation of goods necessary for cattle farming.
While there are risks to investing in cattle for meat production in Indonesia, the opportunities for growth are highly promising. The demand for beef across Indonesia will only continue to grow in the years to come, which is why investors should capitalize on this opportunity as early as now. With the right knowledge, established relationships with key stakeholders, and proper management, the potential for growth is incredibly encouraging. To stay up to date with investment opportunities in Indonesia’s cattle sector, explore our Investor Toolkit.