What are some prospects of the Indonesian livestock industry? How will it affect the Indonesian economy? 

Source: The Jakarta Post

Population, growth, urbanization, changing consumer preferences and economic progress are boosting the demand for livestock products in developing countries. Indonesia is seen to have an emerging economy with a high population growth and economic progress which turned out to be a driving force for the growing demand of animal foods. 

What are the opportunities of the livestock industry in Indonesia? What are its prospects and how will it affect the Indonesian economy? Read more to find out!

Overview of the Indonesian Livestock Industry

Indonesia has a huge consumption of red meat, and it is also used as a traditional animal food source in Indonesia. This is also due to the fact that majority of the consumers of these foods are Muslim, which makes beef and chicken as the most common meat proteins in Indonesia. 

Based on data from Indonesian Statistics, the sector experienced a growth of 9.7% in 2015. Though growth of this industry tends to fluctuate, the main reason for the declining growth would be the decreased population of the animals, such as chickens, cows, buffaloes, and other animals. Due to the initiation of the Estrus Synchronization and Artificial Insemination Program, the population of these animals increased which led to a growth in 2017. The Indonesian government had also played an active role in increasing the chicken population. By 2018, the growth of this industry had reached 7.02% and a 9.41% growth in 2021. 

The meat production of livestock is dominated by beef. In 2019, beef meat production reached 490,420.88 tonnes and it is predicted that it will continue to increase along with the increase in Indonesia’s population. Up till this date, there has always been a gap between supply and demand of beef, since domestic production can only satisfy about 45% of Indonesian demand for beef. In addition to that, the price of beef meat remains high and tends to increase year by year.

Especially during special occasions like the celebration of Idul Adha, Idul Fitri, and Christmas, there is a rising demand but limited supply of livestock animals. On the contrary, Indonesia is also currently facing a food and mouth disease disease spread, which contributed to the increase of prices in livestock supply. However, Indonesia have received help from several countries to help decrease the spread of this disease among livestock animals. 

Popular Livestock Products Exported to Other Countries

1. Cattle

Cattle have been an important part of Indonesian livelihood, especially for people who live in rural and agricultural areas. Beef cattle production in Indonesia is classified into two major systems which are smallholder farming systems and intensive feedlot systems. Cattle in Indonesia are mostly exported to Australia. 

2. Chicken

In 2020, Indonesia’s chicken production reached 3,560 million heads. The poultry industry in Indonesia is a key sector for the national economy, which supplies more than half of all animal protein demand in the country. Indonesia has been exporting its chicken meat to Singapore.  

Challenges of the Indonesian Livestock Industry

A challenge for the Indonesian Livestock industry would be the excessive use of antibiotics and growth parameters (AGP). An AGP stimulates bacterial and residual resistance stored in livestock products like meat, milk, and eggs, but they are harmful to human health because they cause pathogenic bacterial resistance. 

In addition to that, Indonesia’s topography of 17,000 islands also made it difficult for the logistics and distribution process. The demand for halal foods are also challenging, since 97% of Indonesia’s population are Muslim. The dean of Animal Science in Universitas Gadjah Mada also said that it is important for milk and meat consumption to increase since the consumption of these proteins are correlated with the quality of human resources. 

Future Prospects of the Indonesian Livestock Industry

Indonesia has a population of 250 million people with the fourth largest country in terms of population. In the future, average meat consumption is expected to grow steadily especially in accordance with the increasing population, income, and animal protein consumption. The gap between beef supply and demand is increasing but could be solved by live cattle and frozen meat imports. 

Enter The Indonesian Digital Hospitality Market with BRIGHT Indonesia

With the broad opportunities of the Indonesian Livestock industry, it would take a lot of in-depth research about the livestock industry market in Indonesia. With that, you would need a right local partner to assist you. 

BRIGHT Indonesia is an ideal business partner for you. We will assist you on the ground, including virtual assistants during the mission, logistical planning, and detailed communication. It can cause your company to focus on developing partnership cooperation rather than the hassles of the business trip.

BRIGHT Indonesia provides several services such as Market Insight Research, Business Partnership Engagement, Management and Strategy Consulting, and Foreign Direct Investment. The services will help your business to:

1. Provide assistance for you in expanding and developing your business by identification of potential partners.
2. Secure the agreement between client companies and future Indonesian business partners by providing a list of potentially suitable partners, arrange business meetings, and act as a liaison.
3. Supporting our foreign client companies from the private sector with developing corporate or business unit strategies or helping your company from public sector organizations with public policy.
4. Link client companies both from the private and public sectors in global foreign direct investment (FDI) through training and assisting your company in entering FDI source countries to gather investment for your company’s local markets.

For more information, email info@brightindonesia.net.