Integrated oil palm and cattle production

An estimated 16 million hectares of Indonesia is devoted to palm oil production, largely in Sumatra and Kalimantan.

Palm oil operations offer significant commercial potential because the land is already purchased and in use for palm oil production. Cattle breeding under palm can provide owners with an additional income stream, and may reduce production costs and increase productivity.

IACCB is testing these propositions in three locations:

The selection of 3 projects with quite different operating environments is allowing IACCB to identify the key challenges and solutions to commercial sustainability within the Integrated Oil Palm and Cattle Production model.

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IACCB SISKA Partners Update

PT Buana Karya Bhakti (BKB)in South Kalimantan, is rescheduling their 2020 acquisition of additional heifers as part of their scaling-up plan. The Covid-19 pandemic restrictions put in place by the Indonesia Government provides logistical problems in transporting productive cattle from Java or Lampung to South Kalimantan. With the budget approved by company owners the plans will be executed in 2021. As part of next year’s planning management is studying the market penetration of live cattle and beef (fresh, chilled or frozen) in South Kalimantan in order to enter the market and supply premium beef in supermarkets and hotels.

BKB has started to sell the first progeny from the imported BX cattle. Sixty bulls have been sold during the lucrative Qurban market at a price of IDR 52,000 - 55,000/kg liveweight with provides for a good return given the production cost per kilogram of liveweight sits in at around IDR 33,000

PT Kalteng Andinipalma Lestari (KAL), in Central Kalimantan, and IACCB discussed the outcome of the different scaling-up strategies which attracted attention from the General Manager of the plantation. There is interest to increase the herd by acquiring 50 additional heifers but executing the plan will depend on the decision of the joint venture ownership.
The lucrative Qurban market opportunity was successfully taken and thirty bulls were sold at premium prices of between IDR 60,000 - 63,000/kg liveweight. The bulls were fattened for 3 months prior to selling with ADGs reaching 0.8 kg/head/day and a cost-gain of only IDR 33,750/kg, a promising strategy for future local sales.
Semi-breedlot/semi-SISKA partner, PT Superindo Utama Jaya (SUJ) in Lampung Province is preparing to implement their scaling-up strategy of adding an additional 500 productive cows to their herd in the Nakau plantation. Several issues have delayed the execution of the plan including the construction of the new calving pens and issues related to the Covid-19 pandemic with restrictions on transportation.