Australia’s northern cattle export trade to Indonesia remains locked in a high stakes waiting game as testing of cattle in four export yards in WA, NT and Qld plays out this week.

LSD causes swelling of lymph nodes across the animal’s body. Source: AW Coetzer, E Tupparainen, S Babiuk and DB Wallace (2018). Lumpy skin disease. In Infectious Diseases of Livestock.

Tests results should be received by the end of the week but what happens next will rest on how the Indonesian Government responds to whatever the results show.

Australian officials have outlined their belief that the most likely cause of Australian cattle testing positive to LSD in Indonesia was tests reacting to live LSD vaccinations administered to Australian cattle in the country after their arrival, or to Australian cattle being bitten by LSD-spreading insects either on their way to or after arrival in Indonesia.

Australia has increased monitoring and surveillance for LSD since the highly-infectious disease was detected in Indonesia in March 2022, and the disease has not been detected here.

If the results of this week’s testing do satisfy Indonesian Government officials that Australia’s cattle herd is free from lumpy skin disease, the Australian industry is hopeful Indonesia will quickly lift the suspensions it has placed on four export facilities across the north, and allow full trading arrangements to resume.

However the testing in northern Australia is not the only testing underway that could also have a bearing on how this issue unfolds.

While it is believed in Australia that the Australian cattle that tested positive to LSD in Indonesia had been in the country for some weeks and are also likely to have been vaccinated by importing buyers prior to being tested, it is understood that Indonesian officials are now testing samples of animals from every consignment now arriving in Indonesia immediately upon their arrival.

Ships transporting cattle from Australia to Indonesia  can spend the best part of a day tracking along the Indonesian coastline and another day at port unloading, creating the potential for Australian cattle to be exposed to biting insects which can cause the bitten animals to develop antibodies and fail LSD testing in Indonesia.

If Jakarta is not placated by what testing results from Australia this week show, or find Australian cattle testing positive to LSD upon their arrival in Indonesia, hopes of a de-escalation of the current standoff could quickly sink.

The current ban on four facilities significantly affects Australia’s current ability to supply cattle to Indonesia, particularly the two in Kununurra and Queensland which are the only facilities registered to supply cattle to Indonesia from those areas.

It is not a full blown ban, but given the strategic importance of the facilities suspended, it has still knocked one of the legs out from under the trade.

Australia’s cattle trade to Indonesia has been back to about half normal annual levels in the past two years, for a range of reasons, but one being the extent to which Indonesia has succeeded in diversifying its import sources of beef and buffalo meat in response to the high price of Australian cattle in recent years.

Indonesia had already opened its market to imports of frozen Indian Buffalo Meat some years earlier, but as the price of Australian cattle soared toward and then above $5/kg in recent years, it also expanded its supply sources to include boxed meat from Brazil, providing another cheaper alternative to the fresh beef it sources from imported Australian cattle fattened in local feedlots.

While there is no suggestion Indonesia no longer wants Australian cattle, it is true that Indonesia is now no longer as heavily reliant on Australia for a crucial source of protein that it once was.

The dynamics of the trade relationship have shifted in recent years, and how this issue has played out in recent weeks is potentially a reflection of the new reality of Indonesian’s reduced reliance on Australian cattle.

At the same time this move will curb already subdued levels of shipments of Australian cattle to Indonesia.

Facing the uncertainty of how long these suspensions may last, and questions around whether there will be more to follow, will have been delivered a big blow to trade confidence.

Exporters and importers could not be blamed for choosing not to roll the dice and not proceed with assembling orders they had been planning for coming months, until they see some clarity on what lies ahead.

Much relies on what testing shows in coming weeks.