Live export prices for cattle shipped out of Darwin have slumped below $3 per kilogram for the first time in two-and-a-half years, as Indonesian feedlotters struggle to turn a profit.
Feeder steers to Indonesia ex-Darwin are now fetching $2.95 per kilogram, while heifers are making about 20 cents per kilogram less.
Indonesian feedlots have been under sustained pressure from government policies, competition from frozen Indian buffalo meat and high cattle prices in Australia, which have pushed their business models to breaking point.
Agribusiness Elders this week announced it was selling its Indonesian feedlot and abattoir, citing poor profit margins and tough market conditions.
One Northern Territory livestock agent told ABC Rural demand from Indonesian buyers was at its weakest since just after the 2011 live export ban.
Katherine livestock agent Paul McCormick said a combination of factors, including Indonesian feedlotters stocking cattle in preparation for religious festivals, had led to "subdued interest" from exporters.
"There's a lot of inquiry for cattle but not a lot of firm orders," he said.
"I think exporters are seeking out if the supply is there, if the currency is right, the shipping is right and they can do the deal, then they proceed.
"It is a lot different than it was two years ago when exporters were very much hamstrung by shipping commitments and the ships were driving the price of cattle in the Northern Territory more than demand.
"Right now it is probably a truer market [regarding] what importers will pay for cattle."
Lower demand unusual for this time of year
Prices for feeder steers ex-Darwin first breached the historic $3 per kilogram mark in October 2015 and by early 2016 exporters were paying $3.70 per kilogram.
For a small number of cattle there was a spike in price reaching $3.95 per kilogram in April 2016.
Mr McCormick said the softening in demand seen over the past few weeks was quite unusual for this time of year.
"We have been through periods where prices have been much lower, but activity was higher.
"When cattle prices were in the $2.50 mark there were a lot of cattle flowing and business was active and vibrant.
"But as we are reclining out of the $3 per kilogram bandwidth, it seems that little bit harder to get confirmed orders and conduct business for all parties, exporters included."
Frozen Indian buffalo meat providing fierce competition
The introduction of frozen Indian buffalo meat into Indonesian markets has provided stiff competition for Australian beef, placing further pressure on prices.
Mr McCormick said it was increasingly difficult for feedlotters to sell cattle in Indonesia.
"The Indian buffalo meat has had a significant impact, but there is still a great attraction there for Australian cattle in the market. It is really just about price point," he said.
Just over 20,000 head of cattle were exported from Darwin in February, while January's exports broke records with 30,194 head shipped out.
Most of the cattle exported early in the year were bought in preparation for the Islamic festival of Ramadan, which starts mid-May.
"Most importers would have set themselves for their Ramadan period sales — that is often peak sales period for Indonesian feedlotters," Mr McCormick said.
"So if you are on a 90 or 100-day feeding program you need to have those cattle bought and in your feedlot already.
While prices may have dipped below $3 per kilogram for the first time in 30 months, Mr McCormick said summer rain in northern Queensland had prevented a further plunge in price for NT beef producers.
