Thu, 04 Mar 1999

Why is Australian meat cheaper?

By Mangku Sitepoe

JAKARTA (JP): Following the Indonesian government's plan to import meat from India, Australian businessmen, through Indonesia's state minister of food affairs and horticulture, offered on Feb. 4 this year to sell frozen meat to Indonesia at Rp 10,500 per kilogram (US$1.20/kg). This price includes cost of goods, insurance and freight to Jakarta.

This price is lower than the Rp 11,000/kg ($1.25/kg) quoted by Indian meat producers (the exchange rate at the time was Rp 8,375 to the dollar). The Australian meat producers also offered higher quality frozen meat for Rp 15,000/kg ($1.71/kg).

Indonesia has been importing beef from Australia, the United States, New Zealand, the member countries of the European Union and other countries for quite a long time. At first, only top- quality meat was imported, but now meats of various quality and price are imported. The price of meat not only depends on its quality and type but also on where it comes from.

Abroad, the meat from slaughtered cattle is classified as (a) edible meat and (b) edible offal meat. Nonedible offal meat, such as the snout, ears and lips, is disposed of and no one consumes it (Ockerman HW, Food Science Source Book, 1978).

If the government is now considering importing meat, the main goal should be to ensure that the meat is affordable to the community, especially with regards to domestic sellers of foods made of meat and eaten as light meals. Such food is usually made of edible offal meat.

The following table documents the import of meat of various types, qualities and prices from Australia in 1997:


Type of meat Quantity Value *) Price/kg

(kg) (US$) (US$) -------------------------------------------------------------- Edible meat: 1. Meat with bones,

fresh 3,731 4,804 1.286 2. Meat without

bones, fresh 387,803 727,495 1.876 3. Frozen carcass

meat 1,875 5,730 3.056 4. Meat with bones,

frozen 160,826 267,591 1.664 5. Meat without

bones, frozen 15,290,754 21,678,686 1.418 ------------------------------------------------------------ Total 15,844,989 22,684,306

Edible offal meat: 6. Frozen tongue 48,559 76,867 1.583 7. Frozen liver 2,237,149 1,829,574 0.818 8. Other parts,

frozen 1,630,850 1,589,288 0.945 ------------------------------------------------------------- Total 3,916,538 3,495,729 -------------------------------------------------------------- *) CIF Jakarta, Import Duty of 5% and Value Added Tax of 10%

Source: Indonesia's Foreign Trade Statistics, 1997

Central Bureau of Statistics, Jakarta

If we look carefully at the above table we may say that a large portion of the meat offered by Australian companies may be classified as "edible offal meat". Obviously, this is in line with the government's plan to import meat from India in order to fulfill the need for meat as the raw material of foods usually sold as light meals. We can say, therefore, that the Australian meat can be offered at a lower price because of its quality. This is the first factor why Australian meat-exporting companies can offer their products at a low price. There are two other factors which allow this meat to be sold at a lower price.

It is very likely that the meat offered comes from cattle which have been given growth hormone. In some countries, such as the United States, Australia and Japan, growth hormones are permitted (although in the case of Japan only natural growth hormones may be used). Indonesia and all member countries of the European Union prohibit the use of hormones to boost the growth of cattle.

In the United States, over 80 percent of cattle feed is mixed with growth hormones. Feeder cattle are fattened with a growth hormone injection in the form of an implant inserted under the skin behind the ear.

Of course, the consumption of meat coming from cattle given growth hormones is tightly controlled. Such cattle can be slaughtered only after a certain period of time has elapsed from the time they were given the hormones. In the case of the trebolone acetate (TBA) hormone, for example, the cattle only can be slaughtered a minimum of 63 days from the time the TBA is implanted.

There is also a strict standard for the amount of hormones meat classified safe for human consumption can contain. In the United States the standard is 50 parts per billion (ppb), while in Japan the permissible level is 25 ppb. The World Health Organization states that for adults the maximum level of hormones considered safe is 0.0 - 0.01 micrograms/kg of body weight. So if someone weighs 60 kg, the maximum permissible TBA level is 0.6 micrograms.

For a cow which has received TBA, when it is slaughtered the content of TBA found in the meat from its thighs will be 0.001 - 0.004 micrograms/1 gram of meat. If an adult eats 100 gram of this meat, he will consume 0.4 micrograms of TBS, still lower than the level recommended by WHO. This is why the amount of hormones in meat to be consumed by humans is strictly controlled. (Mangku Sitepoe, The Jakarta Post, Feb. 19, 1999).

Growth hormones are given to cattle to accelerate growth. According to cattle breeding experts, when TBA is used the daily weight gain of cattle can increase by 10 percent, while feed conversion, the ratio between daily weight gain and the total weight of the feed consumed by the cattle, may be reduced from 11 to 9. We can say, therefore, that the use of growth hormones in cattle reduces production costs. In other words, the use of hormones can lower the selling price of cattle. So, the second factor why Australian meat can be offered at a price lower than that quoted by Indian meat producers is that it is likely that growth hormones are used to breed the Australian cattle.

The third factor is that in Indonesia, virtually all parts of the cattle may be eaten. Parts of offal meat which are usually disposed of, like the snout and the ears, are here turned into various dishes. So, something worthless in the United States is of value in this country.

Take a cow's liver for example. In the United States, if the cattle are given TBA, after the cattle is slaughtered the liver contains 1.42 micrograms/gram of liver. If an adult eats 100 grams of liver, he ingests 142 micrograms of TBA, which is 236 times higher than the 0.6 microgram recommended by WHO for an adult weighing 60 kg.

So, in the United States the liver from cattle given TBA growth hormones is categorized as offal meat and is sold at a very low price. In Indonesia, on the contrary, these livers are very popular. In 1997 alone, this country imported 6,624 tons of cattle liver, of which 2,237 tons came from Australia.

The skin of cattle is another example. In the skin from behind the ear where the TBA has been implanted, after 63 days have passed, the length of time recommended before the cattle can be slaughtered, 60 percent to 70 percent of the TBA still remains in the skin. This equals up to 90 micrograms of TBA hormone (usually an implant contains 300 micrograms of TBA). If this part of the cattle is eaten, 90 million micrograms of TBA is ingested.

According to Ockerman, ear skin is offal meat, while in Indonesia ear skin is eaten as chips or mixed into a kind of fruit or vegetable salad. This practice is indeed harmful to human health. (Indonesia prohibits the use of growth hormones so it is safe to eat all parts of domestically raised cattle).

So the third factor why Australian meat can be offered at a low price is that the pattern of meat consumption in Indonesia makes it possible for Australian meat producers to offer its meat at a low price.

To sum up, Australian meat can be offered at a low price because of the quality of the meat, the use of growth hormones and the pattern of meat consumption in Indonesia.

The writer is a physician and a veterinary surgeon based in Jakarta.