Supply Chain of the Beef Market in Indonesia

Abstract

Indonesian beef market is very interesting considering the 250 million people residing in the country. In a year, around 670 million kg of beef are consumed; 440 million kg are supplied by local production and 230 million are imported. The price of beef in the Indonesian market (US$ 9.1) is about double that in Australia (US$ 4.2). The high price and the wide margin becomes an appeal for a deeper inquiry. This raises questions such as how does the supply chain look like, how is the distribution of the wide margin from importers to retailers, does corruption still exist due to the import licensed, and who really enjoys the profit. This study aims to analyze the supply chain of beef industry and the factors affecting meat prices in Indonesia. The data was collected through a survey of 134 respondents in seven districts and cities in Surakarta, Indonesia followed by in-depth interviews with breeders, slaughters, wholesalers, retailers and consumers. The results show that factors affecting meat prices are the bargaining power of several actors in the supply chain and the market structure discussed in this paper.

Keywords

• supply chain
• beef market
• share margin
• agribusiness
• commodity
• price formation
• pricing