"The big problem that we are going to have in the next 12 to 18 months is that progeny that would have been born today won't be there," said Brad James, Rabobank's manager for the Northern Territory and the key beef producing state of Queensland, which is home to around half of the country's 28 million head of cattle.

Queensland has recorded less than half of the normal rainfall in the last three months, draining water reserves and stunting grass growth in pastures double the size of France. It is the second consecutive year that the state has suffered insufficient rainfall.

Although heavy rains from Cyclone Dylan provided a brief respite last week, the Australian Bureau of Meteorology forecasts a resumption of dry weather for Queensland, with less than 10 millimetres of rain expected this week.

The shortfall for a country, which accounts for almost a fifth of the global trade in beef, could mean rising prices at a time of surging demand in many emerging countries. Over there, increasingly affluent middle classes are developing a taste for high-protein western diets and hamburgers.

In the mean time, analysts see Australian cattle prices climbing by up to about 50% in 2014. If so, that would further fuel Chicago live cattle futures which have already reached record highs.

For the week ending January 24, 2014, cattle slaughter in Australia rose 40% on year to reach a record high of 161,712 head, according to industry data firm, National Livestock Reporting Service.

In January 2014, industry body, Meat and Livestock Australia (MLA), projected cattle numbers would fall to 27.25 million head by July, the end of the 2013/14 marketing year, but warned that fall could be steeper if the drought persists.

"We need weeks and weeks of good rains if we are to turn things around in Australia," said Simon Quilty, meat and cattle analyst at FCStone Australia.

Distress sales by ranchers dragged prices to their lowest in more than three years, with Australia's benchmark Eastern Young Cattle Indicator (EYCI) falling to US$2.47 per 1/2 kg on January 22.

However, analysts expect prices to rebound once concerns over the future dearth of cows registers with the market, especially as some will look to restock their herds, with the cessation of the drought. Luke Mathews, commodities strategist at Commonwealth Bank of Australia, said that the EYCI could rise "well above" US$3.56/kg by the end of 2014.

The latest development has sparked grave concerns of a global beef shortage in the coming years. In addition, the US records herd numbers at its lowest in six decades as the global livestock industry copes with declining feed grain production which pushed prices for corn and soybean to all-time highs in 2012.

To worsen the situation, the recent severe cold across the US Midwest has hampered cattle weight gains and delayed movement of livestock, pushing prices to record levels in January 2014. Even so, ranchers in California have been selling more cattle due to dry weather.

Higher beef prices are likely to prompt some consumers to switch to other meats.

"We could see higher demand for chicken and pork," said a Hong Kong-based livestock analyst.

Beef importing nations will also seek to diversify sources of supply.

China's beef imports increased in 2013 to 400,000 tonnes, according to the USDA, with the MLA reporting that around 150,000 tonnes was supplied by Australia.

After Japan and the US, China is Australia's third largest customer. However, China is also seeking other suppliers to meet its rising demand.

"It's very likely that China will open the market to the US and Brazil this year," said Pan Chenjun, senior analyst at Rabobank in Beijing. Both countries had been barred from exporting beef to China in 2003 and 2012, respectively, after the discovery of mad cow disease in animals from those regions.