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Expanded Access Could Boost U.S. Beef Exports to Indonesia

Published: Aug 31, 2016
00:00 / 00:00

You may download the audio file here




With its large population and expanding economy, Indonesia has long been a market that held significant promise for U.S. beef exports. But while the U.S. industry has achieved some success in Indonesia, restrictive import policies have made it difficult for U.S. exports to reach their full potential.

With domestic beef in short supply and prices rising, Indonesian officials recently announced an easing of beef import restrictions, which comes as welcome news for U.S. exporters. Joel Haggard, U.S. Meat Export Federation (USMEF) senior vice president for the Asia Pacific, discusses the revised regulations, which will allow for imports of all beef muscle cuts and a range of beef variety meat items including livers, hearts, lungs, tails, tongues and feet. Beef hearts are especially popular in this market because of their use in Indonesian meatballs, or bakso.

Haggard is also hopeful that more U.S. processing plants will soon become eligible to serve Indonesia, which could further enhance U.S. beef’s presence in the market.

Even with multiple restrictions still in place, U.S. beef exports to Indonesia in the first half of 2016 were up more than 400 percent year-over-year, reaching 3,271 metric tons, and more than doubled in value to just under $15 million.


TRANSCRIPT:

Joe Schuele: The U.S. beef industry has received some positive news with regard to access to Indonesia. U.S. Meat Export Federation Senior Vice President for the Asia Pacific Joel Haggard has more details in this USMEF report.

Joel Haggard: Indonesia’s periodically amended its import regulations, trying to balance its goals of achieving beef production self-sufficiency with the need to keep these prices affordable. And beef prices fluctuated significantly – recently more on the high side, because of the inability of the local industry to keep up with demand and the inability of importers to freely input product to satisfy this demand. So the U.S. has maintained for decades that Indonesia could be a much larger beef importer than it is, absent its restrictive import rules. But under the new regulation, importers will again be allowed to purchase popular items such as hearts, livers and other variety meats that have been banned in recent years. In Indonesia, variety meat such as hearts are used as the basic raw material in bakso, or Indonesian meatballs, which are an absolute staple of the population. Think of bakso the same way as Americans think about a burger, an almost indispensable daily consumption item. In addition to variety meat eligibility, Indonesia has added other underutilized beef cuts to the eligible import list, such as chuck items. So the range of items we export to Indonesia is set to grow.

Joe Schuele: Haggard is also hopeful that the U.S. will soon have more plants eligible to serve Indonesia.

Joel Haggard: The U.S. still faces supply constraints due to the limited number of U.S. plants that are authorized by Indonesian authorities to ship there, due to halal rules. In this regard, there is another bright spot, and that is that Indonesian officials have signaled an intention to send teams to the U.S. this year to inspect a new batch of U.S. facilities that have applied for export eligibility. And if these audits come to fruition and the plants pass we should see the U.S. beef industry’s supply capability grow from where they are today.

Joe Schuele: For more on this and other trade issues, please visit USMEF.org. For the U.S. Meat Export Federation, I’m Joe Schuele.