Partly connected to this column I wrote last week, the cattle market in Australia in absolute terms has experienced significant levels of price volatility, more so than the corresponding period in 2025.
Figure 1 below indicates the differential in volatility comparing January 1 to week ending Friday, July 16 2026 against the corresponding period in 2025.
As figure 1 clearly shows, across all NLRS indicators, prices have been substantially more volatile this year than they have for the same period last year. The largest movers have been restocker cattle (driven by the shifts in seasonal conditions and producer confidence) and also feeder heifers.
To explain this dynamic and the drivers behind the price volatility we’ve seen, the article I wrote last week, goes part of the way to articulating those drivers.
Importantly, the sharp adjustment in seasonal conditions throughout the central eastern regions of Australia is very much a major factor here. Whereby the drought conditions those regions faced in the final quarter of 2025 which carried into the first four months of 2026, encouraged a mass sell down of the breeding herd. That translated into higher supply forcing a sharp fall in processor cow prices.
When seasonal conditions then began to improve in late April, this aligned with southern Australia experiencing its best autumn break in at least two years and a gradual recovery in seasonal conditions, which stoked restocker demand. Additionally, producers chose to retain stock on farm and subsequently, buyers (feedlots and processors) had to compete harder to secure supply, placing upward pressure on market prices.
Ultimately, the real underlying driver of this volatility has been the weather and changes in seasonal conditions. The flow-on factors from that, such as wildly swinging producer confidence, and supply of cattle to market from an oversupply to an undersupply are products of the underlying driver of weather.
The destination that 2026’s price volatility has currently brought the beef industry to, is prices at Decile 9 and 10 levels, meaning they are at or near their highest levels on record.
While this is most certainly an outcome to be celebrated for producers – it is a reminder that with prices where they are, the risk sellers now carry is much larger for prices to fall back from these levels than it is to go higher.
With a higher price benefitting the seller (naturally), but a lower price or the risk of lower prices creates market uncertainty and challenges.
In relation to the above discussion surrounding market volatility – trading activity on the Australian Feeder Cattle forward contract has subsided recently. Selling interest and volume remains very strong, although matching counterparties has been difficult, as buy side clients (feedlots and vertically integrated businesses) are willing to participate in the market to a price and no higher – creating a standoff on rates.
That ceiling, where buy side clients are willing to lock contracts in at, seems to be $5/kg liveweight on flatback feeder steers delivered to a Darling Downs feedlot for Q4 2026. When accounting for the premium attached to Angus feeder steers later this year, plus three months from today, that premium or basis as its known is +10-20c/kg lwt on Angus feeders.
These market conditions and bids suggest the buy side of the market thinks Angus feeder prices are likely to ease out to the end of 2026, a similar outcome for crossbred cattle.
Managing price risk via a tool like a forward contract, may provide a potential solution to hedge against downside price risk and protect profit.
Cattle prices across all key indicators have been far more volatile this year than last
With prices now operating at Decile 9 and 10 levels this heightens market risk for producers on the downside.
The StoneX Feeder Cattle Forward Contract is seeing some interest from producers looking to forward contract at fixed prices.
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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