Despite the economic slowdown and recession in the United States, Japan and Europe, he said the fall in the Australian dollar would have a larger impact on markets.

"There will be a 15pc to 17pc rise in livestock prices," Mr Weeks said.

"The $A has already assisted Australian export prices to Japan."

While national herd numbers declined by 1pc to 27.8 million head in 2008, MLA economist Tim McRae said he expected numbers to rise by 2.8pc to 28.6m this year.

"This will be driven by northern Australia as the drought continues in the south," he said.

The drought was also expected to affect producer incomes in southern Australia, through herd size, variations in turnoff rates and drought-related expenditures.

MLA says that while southern beef farm incomes are expected to improve in 2008-09, they will be well below those forecast for northern Australia.

Mr McRae said that while cattle turnoff in 2009 would be back slightly, as producers looked to rebuild herds, from 2010 onwards this should increase.

Australian saleyard prices this year are forecast to average higher across all categories, according to Mr McRae.

The largest price increases are expected in young cattle and cows.

But despite higher cattle prices, hide prices are predicted to remain low, with Mr Weeks saying that it may be mid-year before any price rises are seen.

"This market is ultimately dependent on economies recovering as most go towards the making of luxury items," he said.

"It relies a lot on Europe and Russia and a lot of these importers stopped buying altogether last year as they knew the price of future products would be cheaper.

"Hides have generally gone down two thirds to 75pc for green hides in the past 12-months and they might rebound a third of the loss probably midway through this year."