First Big Cattle Sales

Hi Everyone,

I want to update you all on the sale of our first relevant group of cattle that we brought to our feedlot in Bogor, near Jakarta. On February 26th, 2020, we had sent 220 heads from Sumba to our feedlot in Bogor. It was a tough trip. It took 10 days for the cattle to arrive. Under normal circumstances, it should not take more than 7 days.

Image 1. Cattle inside the vessel.

The cattle suffered so much. The sea was rough: big waves got into the vessel and soaked all animals and feed during the first leg of the trip. The ship had to stop in Surabaya due to the sea conditions and wait for the waves to get smaller in order to continue journey. The feedstock finished while the vessel was still in Surabaya and we could not procure ideal grass to supply our animals in Surabaya. As a result, we lost 14 heads of cattle within 24 hours of their arrival in Bogor to what we suspect was nitrate and nitrite contamination from the feed we provided them, according to the autopsy results. We later learned that when cattle suffer from starvation and extreme stress, we should give them grass that typically have a lower nitrate concentration, which are usually less nutritious as well. 14 heads loss is huge. For 2020, we only had 3 cattle deaths in Sumba. Percentage-wise, even with all these deaths, our cattle mortality rate this year is roughly 1.5%, which is still way below the assumptions we used in the economic model of 5%, so there is no reason to panic. Nevertheless, this kind of loss is unacceptable and may this serve as a lesson.

This was an extremely sad experience and got all of us shocked, but that is the only bad news during the whole fattening period, from which we learnt an important lesson.

Video 1. Trucks lined up to pick up the cattle in Jakarta Port (Tanjung Priok).

Fortunately, we were lucky enough to time the selling of the cattle during Eid al-Adha, also called the "Festival of the Sacrifice". It is the second of two Islamic holidays celebrated worldwide each year (the other being Eid al-Fitr), and considered the holier of the two. It honors the willingness of Ibrahim (Abraham) to sacrifice his son Isaac as an act of obedience to God's command. But, before Ibrahim could sacrifice his son, God provided a goat to sacrifice instead.

Image 2. Cattle arriving Bogor and eating.

In the Islamic lunar calendar, Eid al-Adha falls on the 10th day of Dhu al-Hijjah, and lasts for four days. In the international (Gregorian) calendar, the dates vary from year to year shifting approximately 11 days earlier each year.

Affluent Muslims who can afford it sacrifice their best halal domestic animals (usually a cow in Indonesia, but can also be a camel, goat, sheep, or ram depending on the region) as a symbol of Abraham's willingness to sacrifice his only son.

Therefore, the two most important holidays for the cattle trade in Indonesia are Idul Fitri and Adha. During these periods, the demand for meat increases, so does its market value, meaning that it is the best time for the cattle sale. After the end of the Idul Adha holiday, cattle prices return to their normal levels and sales also slow down a bit. For instance, our average realized price for our 205 heads of cattle was US$ 3.57/kg versus a normal price of US$ 3.00/kg outside of festive seasons. We sold only 205 heads because we donated 1 head to the local community surrounding our feedlot for sacrifice.

Video 2. The cattle ready to be sold.

It is also an important factor to note that the Indonesian people have a preference for the local cattle and not the Australian cattle. So, this is a huge advantage for Asiabeef. Another interesting fact is that animals need to be "perfect". What this means is that they cannot show any visible anatomical deformation, for example, cut ears, broken tail, missing nails from the hoof, etc. Preference is also given to tamed animals, so most of the cattle that are prepared for Idul Adha are tied with a rope around the neck and within its nostrils.

The purpose of Qurbani or Sacrifice in Eid al-Adha is not about shedding of blood for Allah's satisfaction. It is about sacrificing something devotees love the most to show their devotion to Allah. It is also obligatory to share the meat of the sacrificed animal in three equivalent parts - for family, for relatives and friends, and for the poor people. The celebration has a clear message of devotion, kindness, and equality. It is said that the meat will not reach to Allah, nor will the blood, but what reaches him is the devotion of devotees.

What really matters, overall, are the lessons learned and that this first big sale was a financial and operational success, even with the loss we suffered in the beginning.