Indonesia to buy 1 million hectares of Aussie land for beef

Beef prices are hitting record highs in Indonesia, forcing the government to look overseas.

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Indonesians want more beef. But with growing demand and limited supplies, the government has approved a 1 million hectare purchase of Australian land to keep hamburgers headed to their home country.

According to ABC News, beef prices are hitting record highs in Indonesia, and the government is ready to revise its “self-sufficiency” policy to allow for foreign-based farms. Specifically, the country hopes to breed cattle on Australian land before shipping them off to feedlots in Indonesia. Not only does this free up land in Indonesia, but it also cuts costs. Breeding is cheaper in Oz, while feeding is cheaper in Indo.

Foolish takeaway

At an acreage equal to the ACT, Indonesia’s purchase is no small pudding. For Australian agriculture, this move could be both a blessing and a curse. From the information available, it seems that operations will be run by an Indonesian state-owned enterprise, knocking Australian ownership out the window.

But some corporations like Ridley (ASX: RIC) Australian Agricultural (ASX: AAC), Elders (ASX: ELD) and Primeag Australia (ASX: PAG) stand to benefit from potential product sales or contract work, or even economies of scale and technology and infrastructure spillover effects. If approved by Australian regulators, the true benefit to Australia and its companies will only emerge once Indonesia sets up shop and investors get a first-hand glimpse of just how “self-sufficient” this land will be.

Indonesians knows Australia is a good investment, and they’re not the only ones. The Australian Financial Review says “good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit.” Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading


Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »