Large cattle supplies in 2025 and stable to softer producer confidence limiting major upside in cattle prices this year.
StoneX Australian cattle podcast launches, dedicated to providing insights to inform decision making for the beef industry on markets, prices and supply.
StoneX Australian Cattle Swap trading forwards to the middle of the year at a 10-20c/kg lwt discount to the current spot prices.
Last week, StoneX Group released its 2025 Australian Cattle Market Outlook, which provides insights and key production forecasts for the Australian beef industry this year.
Figure 1 below sets out the figures from 2024, both reported and estimates and the 2025 forecasts for the calendar year.
In November 2024, Australia’s cattle herd (including calves) was estimated at 40.54 million head.
In 2025, the Australian cattle herd is forecast to grow to 41.5 million, an increase of 2.4% or 960,000 head, with continued growth in the northern herd offsetting declines in the south, the more productive cow herd, with higher branding percentages, lower mortalities and improvements in operational and land management of producers are the drivers.
The herd figure is benchmarked against MLA’s Beef Producer Intentions Survey (BPIS) November wave and Geoff Fordyce “Australian Cattle Herd: A new perspective on structure, performance and reproduction (2023)”.
Australia’s cattle slaughter in 2024 was estimated at 8.25 million head, with further increases expected in 2025, slaughter is forecast to reach 9 million head, an increase of 750,000 head or 9% year-on-year.
Processors' plant efficiency improvements and upgrades, a more productive and larger workforce as well as new capacity coming online will see cattle slaughter to its highest level since 2015 this year.
Although a slight softening in carcase weights is expected to 300kg/head, the higher slaughter volumes will see Australian beef production reach a new record of 2.7 million tonnes in 2025. Subsequently, beef exports on both a monthly and calendar year basis are expected to break new ground.
With the largest cow herd in more than a decade, which is more productive and efficient, cattle supply will be strong in 2025 and remain so well into the second half of 2026. Calves born in 2023-24 will be marketed, translating into larger feedlot placements and in turn higher turnoff of grainfed cattle than the past two to three years, with more numbers on feed.
This higher supply will keep a lid on major upside price improvements in the cattle market this year, with prices expected to operate between five and 10-year averages. The weather and producer confidence (a function of seasonal conditions) will determine producer demand. Though, the cattle cycle has moved to a buyers market meaning with higher numbers and reduced producer demand due to more numbers on farm, higher costs of doing business, leveraged balance sheets and the 2023 market crash plus the 2017-19 drought fresh in many producers minds, are all a limitation on major improvements in producer demand in 2025 which in turn affects price upside.
There remains downside risk to the market without sustained widespread rain events to limit cattle supply, whilst producer demand for restocker cattle needs to see a significant improvement to provide support for pricing.
I don’t foresee major improvements from producer demand in 2025, an early and widespread Autumn break in southern Australia (southern NSW, Victoria, Tasmania and South Australia) should promote demand from these producers following drought and herd liquidation.
This week, StoneX released its first episode of the Australian Cattle & Beef Market Report, a fortnightly podcast dedicated to discussing the cattle market, supply and demand drivers, pricing and key trends in the sector.
In our first episode, we were fortunate to have Ryan Turner, based in Kansas City, Missouri. Mr Turner has been with StoneX for 25 years and manages the meats and livestock desk for StoneX in the US along with his team.
On the podcast he discusses the US potential herd rebuild, cattle prices reaching records in the US in both cash and futures markets and also the demand from the US consumer for beef. While on a local level, the influence of northern buyers and feedlots dominating at the recently held weaner sales and the drivers of the market cooling post its red hot start to 2025 are also discussed.
The StoneX Australian Cattle Swap is trading inverse out to July 2025, this means that forward market prices are lower than today’s prices. In the front months of the curve, swaps trades are in line with spot prices or slightly softer, with a continual easing to June/July. June and July is trading in a tight band of 10c, $3.60-3.70/kg lwt, this represents downside on spot prices (today’s market) of 12-22c/kg lwt.
The market is expecting continued higher supplies of cattle to pressure prices into the middle of the year, with early market interest of bids and offers pricing further downside into August 2025.
Swaps settling in Q1 2025, booked in the latter stages of 2024 have assisted buyers and sellers to protect against margin squeeze on cattle intended to be bought or sold in these months.
Interest and usability of the swap continues to build across multiple parts of the beef supply chain, from producers through to lot feeders and processors, both buyers and sellers continue to adopt the swap as a legitimate tool to make price and market risk.
Ripley Atkinson's experience in the red meat industry and current role at StoneX developing price risk management tools for Australia’s sheep and cattle sectors ensures he delivers unique, whole of supply chain insights and analysis across key factors such as prices, supply, production and the drivers of the sheep and cattle cycles.
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