Australian Cattle & Beef Market Report

1st of 2026 - China springs tariff surprise as market opens strongly 

China Tarriff announcement

• Nearly 10 years to the week that the ChAFTA came into force (20 December 2015), On New Years day, the Chinese Ministry of Commerce announced that a tariff rate of 55% would be applied to all beef imports from countries, when volumes reached out of quota levels. For Australia, under the China Australia Free Trade Agreement (ChAFTA) our total quota limit for 2026 is 204,000 metric tonnes.
• Other nations and supply regions such as South America have also been impacted, but evidently to a lower extent than Australia.
• It is extremely likely that we’ll exceed the existing ChAFTA quota of 204,000 mt midway through 2026 – another 275,000 mt + year of exports to China was on the cards prior to this announcement.
• I see this affecting a few things;

1. Domestically it could impact the willingness of feedlots to actively seek China specific cattle at the ongoing weaner sales – heifers are a good examples, traditionally well suited to an HGP free short to midfed program for the China market.
   1. As these cattle finish backgrounding and reach feeder weights, by the time they are fed, processed and shipped, beef exports may have reached the quota limit and the tariff could be imposed.
2. There’ll be renewed interest in the EU Free Trade Agreement from the beef industry on the back of this announcement in terms of timing and if and when a deal can be signed – the Australian beef industry is aware of its export market diversity and will be wanting to maintain that to protect itself against these trade shocks – the EU is the logical next place to look towards.
   1. In addition to this – the type of product we export to China will also be well suited to an EU type customer – a lot of high end chilled grain and grassfed.
3. The redistribution of beef exports when the quota is hit – a lot of water to go under the bridge between now and then – but it wouldn’t be surprising to see exporters look to other markets to shield themselves against this –the US situation in 2025 is a good example where we gained market share in other markets whilst the tariff merry go round was unfolding – namely south east Asia and parts of the Middle East.
4. I think the exporters and processors will be cautious to leave their book too exposed to this type of trade shock and if calls need to be made to reduce throughput of that China product in order to shield their business’, they will.
   1. Particularly those processor / exporters affected by having their plants locked out of China access in 2020/21.

North Queensland Floods

• Thoughts go out to those in the gulf who have been impacted by major flooding since Christmas, the trough that has sat over Julia Creek, south to Middleton and east to Hughenden has looked somewhat similar to March 2019 floods in the same regions. It is less widespread than 2019 though.
  • We’re wishing you a genuine recovery ,and the hope that you are are coping ok mentally and livestock losses have been limited or avoided.
• Another similar, slow moving low is due for the far north in late January that leads into Feb which could have similar implications – one to monitor closely 
• I don’t see this system having a major bearing on weaner sales that are ongoing in the south – the southern cattle aren’t suited to these affected northern regions so I doubt it’ll play a role in buying behaviour or overall demand.
• Some clients of StoneX are located not far from these affected regions but have received very timely and valuable rainfall, this should set them up (with further follow up rain due over the next week) for another fantastic year – a great sign.

2026 Weaner Sales

Supply

• Despite the difficulty faced by many suppliers in the south in 2025, supply at the sales has been very good with big numbers presented right across the most centres.
• Weight in the cattle has been down generally which was to be expected considering the season – though some have commented on how well the weaners finished on the back of the 2025 spring despite a difficult start earlier in 2025.

Demand

• As seasons shift across the country, so does the buying demand and purchases at these sales – in 2025, northern regions dominated whereas the 2026 edition we’ve already seen that shift significantly, with the strong return of local and southern buyers.
• Northerners continue to operate this week but not at the same level of dominance they did last year -  a reflection of a few things;
  • #1 is the average to below average summer rainfall received so far by most cattle regions in the north – reducing the demand for stock
  • #2 of course if the improvement in seasonal conditions in the south following drought, particularly the spring of 2025 which addressed water table deficiencies and grew a significant body of feed in a short space of time.
• As is standard (generally) – unweaned cattle continue to be discounted heavily – this is even more pronounced when buyers are seeking stock which they know will perform immediately – particularly if there is any concern around the seasonal outlook – and there is that concern for some buyers at present.
• The lack of demand for heifers, purchased by producers to enter the breeding herd is an interesting dynamic & I think supports my view that we’ll see a lot of southern producers look to “trade their way out” via an initial restock rather than immediately rebuild, with trading providing an injection of cash flow and the ability, through turnover to assist with rebuilding the balance sheet post drought.
• I suspect as these sales move into the western districts of VIC – the demand from local buyers will intensify.

Price

• Prices across the board are generally all above year ago rates – in line with how all markets ended 2025.
  • I would suggest that with the addition of an improved season for northern regions, prices likely would have been higher – though the money paid is very solid & a fair representation of how I thought these sales would start the year.
• Feeder weight cattle prices are down slightly on final sales of 2025.
• Restocker steer to heifer premiums are remaining large, particularly on the really light cattle with $1/kg lwt common in most sales – the heavier weights, spreads narrow but again are operating at similar levels to how spreads were in saleyard markets throughout 2025.
  • What this tells you is a lack of confidence to rebuild, underpinned by a shaky outlook seasonally – if there was a true rebuild attitude or mindset from anyone in the marketplace, then these spreads would be at a lot closer than where they are.
• My big takeaway from these sales is the lack of clear discount for coloured cattle relative to Angus – I’m of the view that we should take this price performance as a market signal from feedlots – feeders are looking to Winter 2026 and their buying behaviour to me indicates they’re worried about Angus feeder supply and in turn heavy Angus feeder prices during the traditional winter peak in Angus feeder prices.
  • In order to combat that – feedlots are actively cycling out of Angus at these sales, getting cattle supply around them to hit feedlot entry weights in winter to replace the traditional Angus numbers they’d be buying at these sales.
  • This is an evolving situation and one to watch – we saw some Angus feeders reduce angus exposure in 2025 as a result of that price rally and this development at these weaner sales looks to me like a continuation of that trend.

Weather

• Rainfall focus for Northern Australia continues over the next week with good model alignment for this current rain event due over the next week with the focus area across the northern QLD coast, the peninsula and the gulf – that’s the focus of rainfall whilst in the south fires underpinned by the low in the bight continue to bring significant fire danger.
  • The falls if they eventuate into Central Queensland will be very much appreciated by these producers and should begin to set them up for another solid season.

• • ICON Model used for events with significant rainfall periods.

• Another system developing for late January in the Gulf again in QLD is a major one to watch – particularly with a soaked water table on the back of the recent flooding.