Cycle highs, liquidation and global competition – StoneX H1 2026 Cattle Market Outlook

Last week, StoneX released its H1 2026 Australian Cattle & Beef Market Outlook report, which covers all key production forecasts for the beef industry, as well as commentary and insights on price and supply outlooks and key challenges and opportunities for the sector.

On the outlook, there are three key headline forecasts to note;

1. The cattle herd will liquidate in 2026, falling1.5% to 40.5 million head
2. Slaughter numbers are forecast to reach their 3^rd highest level on record at 9.4 million head – surpassing 2025’s 48-year highs.
3. Beef production & exports to remain in line with 2025’s record breaking performance.

The numbers

As Figure 1 below depicts, all key production forecasts are either in line or set to break 2025’s records – which demonstrates that the cattle cycle will reach cyclical highs this year, before entering the new cycle of a reduction in production from 2027 onwards.

Figure 1.

Continued expansion of feedlots, coupled with a reduction of days on feed (due to feedlots implanting mid and long fed cattle & cycling into shorter programs) means grain fed turnoff will also rise to new highs this year. That growth of grain fed turn off will offset declines in grass fed carcass weights and higher female slaughter due to drought conditions throughout central & northern NSW & southern QLD, ultimately boosting beef production.

Growth in live exports of 7% year on year to 850,000 head, underpinned by strong northern cattle supply suggests an optimistic outlook for the critical northern trade in 2026. With both tailwinds and some cost of living headwinds challenging the sector the trade is well placed to see 2026 be a successful year.

For boxed exports, headwinds globally are more prominent than they have been for some time, namely Brazilian competition in key markets (USA / North Asia), trade disruptions, tariffs and geopolitics. Fundamentally though, the global protein shortage remains soundly intact which supports underlying demand for Aussie beef. Exports forecast to remain in line with 2025 levels at 1.54 million metric tonnes.

Price and supply outlook

With the cattle cycle peaking this year and key cattle regions in the broader eastern seaboard experiencing drought conditions, supply is expected to remain very strong throughout 2026.

Large numbers of older cull cows can be expected to be marketed, alongside big volumes of lighter weight feeder cattle as producers choose to sell early due to a lack of grass and water.

With a favourable autumn break forecast for the south, cattle supply is likely to shorten into winter, exacerbating upward pressure on feeder and slaughter cattle prices in the middle of the year.

At a price level, continued and enhanced price volatility can be expected throughout 2026, particularly as producers & the market becomes more sensitive to weather forecasts and rain due to dry conditions for the key central region of the east.

Cattle prices look set to track 5-year averages through the first half of the year with a winter uptick in prices likely due to weak southern supply and strong demand from buyers (feedlots & processors) competing in northern markets to secure stock.

Two to watch

There are two key factors that stand out as dynamics to watch in 2026; 

1. Processing plants exceed capacity due to high supply.
2. US market begins buying larger volumes ofAustralian grain fed beef.

With dry weather firmly embedded throughout parts of the east’s major cattle regions, heavy supply of cattle is on track to increase pressure on processor capacity in2026. In 2026, the three major processing states (VIC, NSW, QLD) were all operating at capacity compared to 10-year performance, yet the east wasn’t in drought included turnoff.

The concern now, is that with drought embedded in some of these regions, encouraging a faster selldown of stock, that processors become overwhelmed with supply and use price asa lever to deter producers from selling because they are unable to process stock fast enough.

As US feeder cattle placements continue to fall, future grain fed beef production will tighten significantly, creating an exciting opportunity for Australian grain fed beef to fill this shortfall. Two matters stand out, Australia is likely to be recognised as the only major supplier who can offer like for like product to the US market for grain fed beef and secondly, this increasing demand may assist in offsetting the tariff situation locking larger volumes out of China due to the economics of the trade.

What does this mean?

The fundamentals for the Australian beef industry in 2026 remain sound which places the industry in a solid position for the year ahead, to weather and adapt to challenges. Though headwinds at both a domestic and global level remain which will temper the capacity of the market to continue its upward trajectory in 2026 at a price level like it did last year.

To read the full report, click here.

To listen to thepodcast which discusses the report, click here.

The Bottom Line

• Australia’s cattle herd will reach cyclical highs in 2026, meaning large supply of stock being presented.

• Processing plants exceeding capacity due to heavier drought induced turnoff remains a key risk for the beef industry this year.

• US consumer demand for Australian grain fed beef remains a key opportunity to monitor in H2 2026.

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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