The "unprecedented" reduction in the US cattle herd, will playing into the hands of rival producers by allowing them to take America's share of export markets, a leading analyst said - even as US officials lifted their estimate for Australia's beef exports.

Don Close, Rabobank's Texas-based vice-president for animal proteins, warned that US beef producers "have painted ourselves into a tight corner" by reducing the domestic cattle herd to 89.3m head as of the start of the year, the lowest since 1952.

The decline from highs in the 1970s reflects in part improved productivity, with genetic improvements allowing ranchers to produce more beef from fewer cattle, but of late by drought which has prompted ranchers to cull animals rather than bear the elevated cost of feeding them.

Assuming rain returns this year, "we will see out producers holding onto their cattle, particularly heifers", so reducing the animals available for beef production.

'Non-viable source of cattle'

But even if rains do not appear, US beef supplies could suffer, as the supplies of domestic cattle available for fattening dwindle, and without supplement with animals from neighbouring countries.

In Mexico - whose own drought prompted a surge in supplies of feeder cattle for placement on US feedlots – numbers of animals now appear "extremely tight", limiting available supplies, especially if pasture renewal encourages herd rebuilding there too.

Rabobank estimates that, as of the end of last year, 10% of cattle on US feedlots were of Mexican origin.

Meanwhile, Canada looks an unlikely source of animals, with producers there "trying to stabilise" cattle numbers after a decline, fuelled by an outbreak of bovine spongiform encephalopathy (BSA, or mad cow disease) from a 2005 peak of nearly 15m head.

The country "is a non-viable source of cattle or beef", despite a recovery in its cattle numbers of 0.5% to 12.275m head last year, Mr Close said.

'Tighten like we've never seen before'

"No matter what happens with our season this year, there will be a shortage in [US] beef supply going into 2014," Mr Close said, painting a particularly bright picture for the boost this will provide to Australian exports.

"As soon as we see any signs of recovery, our lean beef market will tighten up like we've never seen before, providing the real opportunity for Australian producers," he said.

The comments came as the US Department of Agriculture's Canberra bureau raised by 55,000 tonnes, to 1.47m tonnes, its forecast for Australia's beef exports this year – ironically, in part because of dryness there too putting the brakes on herd rebuilding.

"A return to drier seasonal conditions, rising input costs and rising rural debt levels are expected to increase slaughtering and reduce herd build-up sooner than previously expected," the bureau said.

'Fill gaps'

The rise in Australian beef exports, of 3.5% year on year, will be led by shipments to the US - which is the world's biggest importer of the meat, besides being the fourth-ranked exporter, in part reflecting the impact of having a largely grain-fed domestic herd.

"Exports to the US which are expected to increase 14% year-on-year to fill gaps left by the smallest US cattle herd in many years," the bureau said.

At 1.47m tonnes, Australia would overtaken Brazil to claim second place among world beef exporters, behind India, according to official USDA estimates.