Why is Australian meat cheaper?
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.