MARKET analysts and processing giants have forecast the year ahead as a tough one for beef producers and processors alike.

Meat and Livestock Australia chief market analyst Peter Weeks said MLA expected the first half of next year and possibly all of 2010 to be marked by a high Australian dollar that would keep export prices low.

In saleyards monitored by the National Livestock Reporting Service, the Japan ox price finished the year at 153c/kg (down from 175c/kg last year) and the US cow price at 108c/kg (down from 131c/kg).

In domestic markets, the Eastern Young Cattle Indicator finished the year at 283c/kg, which was almost 50c/kg below where it was this time last year.

The price represents the lowest level in several years, after the EYCI fell to its lowest point in two years in December.

Cattle through-put was 5 per cent lower than 2008, according to MLA data, with cow yardings accounting for the largest fall.

Yearling steers numbers slipped 6 per cent and grown steers dropped 5 per cent while grown heifer and cow numbers both contracted by 7 per cent. The only area that numbers increased was in young stock where vealer steer and heifer numbers rose 4 and 5 per cent respectively.

Mr Weeks said losses incurred by some export buyers in currency movements of up to 10 per cent had wiped out profits and forced them to operate week-to-week since the onset of the global financial crisis.

Consumer confidence is already showing the early signs of a revival in Korea and demand from Japan and the US is expected to pick up in the second half of 2010, he said.

"The main positive for next year is the prospect of a normal season with good monsoon rains in the north and tighter supplies."

But while tight supplies will prevent prices from falling any further, processors will struggle for throughput and may be forced to drop more kill-days.

This will effectively restrict any price response to widespread rain, he said.

Swift Australia director John Berry agreed.

"It will be a challenging year ... for all animal proteins," Mr Berry said.

"We are facing challenges from other cheaper animal proteins; for a viable processing sector we need to re-build the cattle and sheep numbers."