Cattle owners are in for good news as the drought forecast to hit U.S. beef exports will give Australia's cattle industry the opportunity to increase output and take advantage of near-record prices.

Notwithstanding obstacles like the heightening Australian dollar, a dent in U.S. drought-induced herd slaughter tariffs and global economic uncertainty, cattle prices will hit record highs later in 2012, according to Rabobank's latest quarterly beef outlook.

"Towards the end of the year we see them improving slowly, as supply around the globe, and particularly in the U.S., gets hit, and potentially reaching record levels in the second half of 2012," Wendy Voss, Rabobank report's co-author said.

The U.S., particularly the states of Texas, Oklahoma and New Mexico, is experiencing a severe drought that has forced cattle owners to slaughter their herds early while still healthy and strong. The three states account for 25 per cent of the country's beef herd.

Since U.S. cattle owners will take a long time to rebuild, U.S. beef export will eventually dry up, opening doors for the Australian cattle sector.

"When the largest producer in the world sees a 600,000-tonne reduction - that's a quarter of Australian output - coming, that presents an opportunity," Ms Voss said.

Current strong prices of beef at $395 a kilogramme for trade steers will slowly improve.

"Declining U.S. beef production is likely to be a support for higher farm gate prices," Ms Voss said.

The Rabobank report also predicted prices for cattle in the live export market to Indonesia may hit a record. According to Agriculture federal authorities, about 110,000 Australian cattle have been exported to Indonesia in the three months since live exports resumed.

Another 10,000 animals are due to be exported by end of the week, making total number of exports reach over six digits.

"The fact the number of cattle exported to Indonesia looks set to exceed 100,000 since the lifting of the temporary suspension is a testament to the hard work of industry and of government," Agriculture Minister Joe Ludwig said in a statement on Tuesday.

"This is an important, legitimate and valuable industry for Australia and one the government is committed to supporting."

Australia's cattle exports to Indonesia reached 456,000 head a year ago, representing 62 per cent of total export figure. However, live export numbers are forecast to plunge 2011-12, estimated at 450,000.

Live exports to Indonesia are about more than $300 million a year.