Much has been discussed in industry circles and events in recent months, around the big question of whether the herd will rebuild in 2026.
I have written on this subject via APlus News for the best part of 12 months, with my most recent column, identifying that the herd would liquidate in 2026, coming in the H1 2026 StoneX Australian cattle market outlook published in February.
There are several factors which point towards the liquidation, namely northern NSW cattle yardings, which accounted for over 30% of the national total for the month of March, plus multiple records broken across key selling centres within these regions. In March for northern NSW, over 125,000 head were sold through these saleyards, the highest figure on record.
On top of this, NLRS has recorded multi-year highs in weekly slaughter numbers nationally as cattle move far and wide to be processed,
A lack of intention to rebuild numbers – across several key categories and locations is an additional factor, this article identifies those themes:
Sustained herd liquidation in the key cattle region of northern NSW / southern QLD
Buyers on AuctionsPlus preferencing steers to trade over heifers to rebuild
The current cattle cycle – above average herd size and seasonality
In my last column, the role of Northern NSW supply was discussed against the backdrop of challenging seasonal conditions. This was further supported by an article last week written by Natasha Lobban about listings of cattle on AuctionsPlus, with supply from these regions exceeding drought benchmarks.
Drought through these regions has driven an intense sell-off of stock, via saleyards, online platforms and direct channels. This is creating herd liquidation and ultimately in future a tight contraction in availability of cattle supply.
The seasonal challenges in these regions, coupled with historically strong cattle prices, has encouraged producers to adopt a sell down mindset rather than 2019, where feeding through was preferred.
Data on price spreads from AuctionsPlus, identifying buyer preferences for weaner steers over heifers, further reinforces the notion that herd rebuilding is a long way from eventuating.
The data analysed by StoneX, examines the price spreads between weaner steers and heifers in percentage terms and actual value terms. As Figure 1 below shows, the rebuilding period of 2020-2023 signifies the period where intense demand for future breeding females saw spreads tighten as heifer prices narrowed to near evens with steers.
Compare that relationship to today, and on actual values, steer premiums over heifers is at its widest level since AuctionsPlus data recording began in 2016, which includes two herd cycles, the lows and highs.
So far with one third of Quarter 2 2026 complete, actual spreads for steers over heifers is averaging A$1.03/kg liveweight, and percentage spreads is sitting at 26%, the third highest quarter on record.
This data demonstrates that buyers are preferencing steers and as such, demand for steers is increasing price premiums over heifers. This data solidifies anecdotal evidence, that buyers, particularly in the south, are chasing steers for a short-term trade to drive cash flows to rebuild balance sheets post drought.
Producers are not looking for long-term investments in females to rebuild the herd. If they were, the premiums for steers over heifers would be narrowing on a trajectory towards the 2020-22 levels, we’re a long way from that.
Where the current cattle cycle is positioned indicates that the rebuild may still be at least 12 months from commencing. By that, I mean, we are seeing record slaughter volumes, record beef production and record exports, and have done for the past 12 months.
Figure 2 below, which shows quarterly slaughter and production volumes, suggests that in 2026 we’re likely to see the peak of the cycle. This data, combined with the cyclical nature of the herd, indicates that we’re likely to see declining slaughter and production numbers late in 2026 and into 2027, whereby the herd rebuild, dependent on seasonal conditions improving for key regions to support rebuild intentions may eventuate.
It's likely, that northern NSW will rebuild faster than the south, because producers have sold down sooner and not fed cattle through, meaning balance sheets and financials should be in a healthier position than at the end of the 2019 drought, allowing a more confident step into breeding females. But currently, the key region of central eastern Australia is experiencing drought, and subsequently a large number of breeding females have been killed – which is further evidence of the possibility of liquidation continuing, not rebuild.
Understanding market fundamentals and the cycle of the herd ensures producers remain in touch with key drivers and themes which can influence pricing performance.
Drivers outside of the herd cycle are currently influencing market pricing, namely underlying fundamentals of solid domestic buying demand from feedlots and processors, supported by the global protein deficit which is aiding Australia’s position from a global perspective for beef demand.
Drivers of herd rebuilding are not influencing market pricing at present because it isn’t happening and as such are unlikely to drive price performance in the medium term until it does.
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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Ripley Atkinson: May 6, 2026
Much has been discussed in industry circles and events in recent months, around the big question of whether the herd will rebuild in 2026.
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Ripley Atkinson