Australian cattle numbers have grown substantially, partly as a result of the federal government’s temporary suspension of live cattle exports to Indonesia in mid-2011, says beef producer Australian Agricultural Company (AACo).

“There are now two million more cattle in Australia than there were two years ago,” AACo chairman Donald McGauchie told shareholders at the company’s annual general meeting in Brisbane on Friday.

Mr McGauchie said the rise in herd numbers was partly caused by the live export suspension that followed concerns about animal welfare.

As a result of the suspension, cattle that had been earmarked for export to Indonesia had remained in Australia.

Dry conditions had also boosted the supply of grass-fattened cattle.

AACo’s herd at the end of 2012 was the biggest herd for a pastoral company in Australia’s history.

AACo had decided to delay the sale of cattle to benefit from increased pasture, heavier sale weights and anticipated price rises.

Mr McGauchie said the live export suspension of 2011 continued to affect the Indonesian beef market.

Since the trade suspension, the Indonesian government had accelerated its policy of developing a self-sustaining cattle industry by 2014.

Indonesia had reduced the number of import permits from Australia, from 500,000 head in 2011 to 283,000 head in 2012.

The quota reduction and an upper-weight limit of 350kg for live export feeder cattle to Indonesia had created significant challenges for the beef industry in both Australia and Indonesia.

Mr McGauchie said, however, that Indonesia remained an important market for AACo.

He urged the federal government to renew efforts to rebuild its diplomatic and commercial relationship with Indonesia.

AACo was continuing to diversify its exports into other Asian markets such as Vietnam and the Philippines.

The company was awaiting federal government approval for IT to export to other markets which met new animal welfare standards imposed by Australia after the live export suspension.

“We urge the government to expedite these approvals,” Mr McGauchie said.

He said the high Australian dollar continued to affect AACo profits and had also enabled United States beef producers to competed more effectively in AACo’s markets.

A free trade agreement between the US and South Korea – AACo’s biggest boxed beef export market – had put the entire Australian beef industry at a competitive disadvantage.

Mr McGauchie urged the federal government to become more engaged in pursuing a free trade agreement with Korea.