Cattle industry primed for rebuild this spring

The set up is complete - now all signs point towards a central eastern Australia rebuild shaping the market come Spring 2026.

The set up

An argument can be made that central and northern NSW and southern Queensland is a major bellwether for the overall eastern seaboards market performance when the cattle and seasonal cycles moves these regions into liquidation and subsequently rebuild territory.

Figure 1 below from the BOM map shows rainfall deciles for the nation from November 1, 2025 to April 30 2026, where the regions went through their driest period since the 2017-19 drought. This period was intentionally selected to highlight the challenges it faced whilst most other areas were in average to well above average seasons.

At a time when these regions receive most of their annual rainfall in a summer dominant region, the dry weather when grass production typically is favourable, was challenged due to the seasonal conditions.

Figure 1. 6 Month Rainfall Deciles (National). Source: Bureau of Meteorology

The difference this time, was that the dry weather came on far faster than previous periods.

This forced these producers to make early decisions and either exit sale cattle as weaners rather than feeders or seek agistment. Big numbers of stock left these regions.

As per Figure 2 below, the Q1 2026 Australian Bureau of Statistics (ABS) slaughter data, showed that NSW female slaughter hit its highest Q1 level since March 1979. Producers heavily liquidated, which has left the breeding herd depleted.

Why this matters?

Clearly, as seasonal conditions deteriorated over the six-month window highlighted above and early decisions were made, the NSW female kill was pushed to levels not seen in 45 years.

The situation the market is now presented with, is a general shortage of breeders or future breeders in these major cattle regions of the broader east.

Since the end of April, rains began falling and slowly but surely the season turned for central eastern Australia (including southern QLD). Figure 3 below illustrates this.

Despite transitioning into winter, the milder than usual temperatures and lack of genuine frosts has meant grass production has remained favourable well into the middle of the year.

What this has created, is heightened demand from producers to chase cattle in preparation for Spring. Conversations indicate a strong demand for stock but a nervousness to step into numbers at the current rates being transacted.

Figure 3. National Rainfall Deciles - two months May and June 2026.

Where to now?

The set up is behind the market, but what is in front of it, can significantly shape Spring 2026 cattle prices for restocker articles. Consider Figure 4 below, this is the quarterly price spreads between restocker steers and heifers in NSW, with steers as the premium.

The shaded areas show the past three occasions where dry conditions in these regions have encouraged a sharp uptick in turnoff. Now consider how these spreads perform, that is the discount of heifers to steers tightens substantially, following the periods of drought and turnoff.

The set up now suggests the market is about to go through the same cycle, driven by the liquidation of the breeding herd central eastern Australia experienced earlier this year.

When demand strengthens for breeding females, the discount for restocker heifers to steers narrows to near evens, we last saw this during the rebuild in 2021-22.

I hold the view that the same set up and market dynamic has the potential to play out in Spring 2026 as Spring storms begin to take shape from September onwards in central eastern Australia.

What comes with heightened restocker demand from a key region of price performance, is increased risk at a price level, and we’ve seen that play out in the market in recent years as grass driven demand overtakes fundamentals.

The Bottom Line

• Liquidation of the cow herd in NSW at levels not seen in 45 years, plus a seasonal recovery in conditions has primed the market for heightened restocker demand in Spring in central eastern Australia.

• Monitoring price spreads between restocker steers and heifers as we move toward the end of the year will be a key indicator to determine this progression.

• With heightened demand comes heightened risk, prices are now operating at Decile 9 levels for light cattle, and that is likely to persist if Spring rains develop.

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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