Ripley Atkinson assesses the major upside and downside factors shaping the outlook for Australia’s beef sector.
Australian cattle markets are beginning to feel the pinch of global geopolitical risk which has undermined stability in two of our most important input costs for the beef supply chain.
Whilst price movements for cattle have been more subdued than that of Brent Crude oil and Fertiliser, the flow-on effects of these rallies in the input costs will wash through the supply chain in a negative way over time. Like how interest rate rises are designed to work … these things take time.
Already anecdotally, feedlots are dealing with surging fuel levies which is adding pressure to their willingness to pay higher rates. Furthermore, grain prices delivered to the Darling Downs have lifted A$20-$30/mt in the past month on both spot and forward prices, adding additional strain to margin due to higher costs.
In addition, the beef industry is due to hit its quota for China by late April/May, at current export rates. For context, March 2026 exports are on track to be one of the top 3 highest months on record, 145,000 metric tons plus. The rush to get product out the door to China before the tariff is hit is contributing to this significantly, as is the elevated slaughter volumes and overall beef production.
For context, if we hit 149,000 mt for the month of March, that would be 33% or 37,000 mt higher than March-25 volumes.
Once that quota is hit, beef will need to be circulated through other markets – creating uncertainty on $/kg price returns for exporters with China exposure.
And to add salt to the wound, the EU/AUS Free Trade Agreement announced yesterday leaves only 13,770 mt of access for grain fed beef into that lucrative market, at a tariff rate of 7.5%. A very small volume to be spread across our exporters, particularly important considering last year we shipped over 14,000 mt to China alone in multiple months.
Orders are beginning to emerge from US beef customers, chasing Australian grainfed product on middle meats for delivery prior to the summer grilling season.
In my view, this is the early lead indicator for higher demand more broadly for Australian grainfed beef, with an H2 2026 crunch in the back of the US market’s minds regarding availability of domestic grainfed beef.
Lower placements of feeder cattle are a significant contributor here, despite overall grainfed beef production remaining stronger than expected due to heavier carcase weights.
This dynamic is bullish for the Australian beef industry, and may come to pass that it offsets the lack of access to the China market for a period of 2026 before orders begin reemerging in the second half of the year, for delivery in early 2027.
Finally, the seasonal excellence being experienced through Queensland and the broader north is a real positive for the beef industry at a local level.
As is the continued improvement in conditions across southern Australia, with a late April autumn break, set to deliver the regions a solid base to begin genuine recovery in 2026.
The intention of highlighting the current landscape at a macro level the Australian beef industry is presented with, is not intended to scare nor talk down the positivity in the industry at present.
Rather, identifying both the positives and negatives and assessing their influence is important to recognise, particularly at a time where there hasn’t been so much uncertainty at a macro level since COVID-19 for the Australian beef industry.
Removing risk exposure presented by these global shocks which will influence and affect the domestic cattle market in some capacity is an important consideration to make moving forward. Securing profit, protecting margin and limiting risk exposure to external macro factors is something the beef industry could be significantly better at.
At StoneX, via our Australian Feeder Cattle forward contracts, which can be utilised out 12 months in advance, this is one potential solution or way of managing such risk.
Ensuring that price risk is mitigated to an extent on a portion of your turnoff. You’re able to financially plan and budget with more certainty, and risk exposure to global macro shocks affecting the domestic cattle market is mitigated. This tool StoneX offers is intended to be utilised for exactly market situations like the one we’re presented with now.
Those that are choosing to engage with us are reporting greater comfort and confidence levels before positions have been taken to mitigate 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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