31 Oct, 2008 - Calendar Year 2008 Indonesian imports of non fat dry milk and whole milk powder are estimated to increase to 159,000 MT and 44,000 MT respectively due to continued economic growth, a stable political outlook, continued per capita consumption increase, growing health awareness among consumers, and production capacity expansion by some of the major Indonesian dairy producers. U.S. dairy exports to Indonesia are expected to reach another record level.
Production
In 2008, Indonesian fresh milk production is estimated to reach 1.2 million liters per day, equal to 48,000 MT, and continues to meet only 25 percent of domestic requirements. 2009 Indonesian fresh milk production is expected to increase to 1.275 million liters per day, which is equal to 51,000 MT. The increase is expected because of price incentives that encourage farm management to produce higher quality milk and government plans to import dairy cattle in 2009.
Several fundamental problems hamper further improvements in Indonesian dairy cattle productivity including: limited farmer education, scarcity of forage, high price of dairy cattle feed, small farm size, scarcity of land with suitable elevation for dairy cattle farming, poor farm management practices, limited access to bank loans, lack of technology for milking and processing the fresh milk, and limited access to high-quality genetics.
Currently Indonesian fresh milk production is sourced from 320,000 dairy cattle located in the major fresh milk-producing areas in all three provinces on Java. Cows owned by small farmers that are members of local Dairy Cooperative Unions produce most of the milk. These coops collect the milk and measure the bacteria content of fresh milk to determine the quality and price paid to the farmer. Average yield is between 10 and 12 liters per cow per day. Fresh milk quality is measured by the bacteria content (TPC=Total Plate Count), which ranges from 500,000-1 million tons. Indonesian fresh milk production with the lower bacteria content is combined with imported skim milk to produce full cream liquid milk and powdered milk. Fresh milk with higher bacteria content is processed into sweetened condensed milk.
In contrast to the small and economically inefficient fresh milk production by small farmers that are members of the unions, large and efficient companies dominate the dairy and dairy product manufacturing sectors. Several new producers are entering the market, and some of the major dairy product manufacturers are expanding their capacity. New brands of dairy products can be found in retail market shelves. Dairy and dairy product sales are expected to grow between 10 and 15 percent in 2009, which is larger than expected volume increases due to the higher margins following price decreases on the international market.
Semen for artificial insemination is produced by two agencies located in Malang, East Java and Lembang, West Java. There are only two independent dairy cattle farmers practicing artificial insemination using semen from the agencies and maintain a records system.
Reportedly the Directorate General for Livestock within the Ministry of Agriculture (DGLS) has been conducting progeny tests since 2003 to produce prime quality dairy cattle genetics suitable for the Indonesian climate. DGLS plans to use the results of the test to begin a dairy cattle recording system. There are four private companies providing 404 cows, another government institution in Central Java is providing 51 cows, and small holder farmers are providing a total of 5,794 cows.
Semen from eight prime quality bulls is used to artificially inseminate these cows. The quality of the bull genetics will be determined by the fresh milk productivity of the offspring. Indonesia is trying to meet the international standards for progeny testing that requires the use of 10 participating cows for each bull. Funding has become a major problem to continue the project and the continuation of the program is questionable.