THE beef market has taken a hit this year.
And if the seasonal conditions in eastern states don't improve, the market is set to continue on a similar path next year.
The benchmark Eastern Young Cattle Indicator last week closed at 328c/kg, almost 100c/kg below last year's closing figure of 426.75c/kg.
According to the latest Rabobank beef report, the EYCI is 16 per cent below the same time last year and at the lowest level since February 2010.
However, many producers and restockers believe they are still able to make a profit.
Meat and Livestock Australia's chief economist Tim McRae said the difference in the EYCI last year, was due to the return of dry conditions.
"We have seen a lot of cattle come onto the market during October and November as producers prepare for a hot, dry summer," Mr McRae said.
He said producers were also being cautious with how much they de-stocked because many of them had been rebuilding their herds for the past two years and didn't want to go backwards.
"The big thing to watch for the next few months is how the northern wet season shapes up and how far south the rain comes," Mr Rae said.
"If we get some good falls, we should see some good competition from northern buyers just in time for the Victorian weaner sale season."
The lower cattle prices mean export volumes have increased. October was a record month of exports, with sales to China reaching 7524 tonnes - almost equal to the entire volume shipped last year.
Last month, this volume increased again, with total exports reaching 7955 tonnes.
Exports to both Korea and Japan remain below last year's levels, with Japan down 7.5 per cent and Korea down 20 per cent, because of strong competition from the US in both markets.
Mr McRae said prices had also been strongly affected by the weaker demand.
This decreased demand is expected to continue but will depend on competition from the US.
"The US beef market is facing supply issues which could prove positive for the Australian market," he said.
While this year has been another volatile one for beef producers, Mr McRae said decent levels of rain will see confidence increase significantly.