US cattle numbers are at their lowest in more than 60 years.
And Australian cattle producers stand to benefit.
Figures released by the US Department of Agriculture last week showed cattle and calf numbers had fallen to 89.3 million - the fewest head since 1952.
Last year's herd comprised 90.8 million head.
Cows and calved heifers were at their lowest numbers since 1941.
Australian Agriculture Company managing director David Farley said the smaller US herd was good news for local exporters.
Mr Farley said a large number of US cattle were being hand fed.
"Australia is very well positioned to take advantage of the situation," Mr Farley said.
US Farm Bureau deputy executive director Dale Moore said high prices for fed cattle and the drought were contributing to the depletion of the US herd.
"The high prices put the cow-calf rancher on a tough decision tree," Mr Moore said.
"Do they hold back heifers to build the herd or send them to market for the feeders to finish and secure the market income? It's always a tough decision in times of high prices."
Mr Moore said the cow slaughter market was "fairly robust", so farmers had to decide whether to keep or cull their stock.
The drought in Texas, Oklahoma, and on the western high plains had forced some farmers to send their herd replacements and cows to market, particularly when "the forage options literally dry up".
Mr Moore said the short-term outlook appeared more positive and farmers might choose to move some or all of their stock to better pastures.
"Economics is a huge factor - the cost of hauling cows to pastures elsewhere or hauling sufficient forage to the herd can be justified within limits," he said.
"The price of grass hay or alfalfa will easily be double or triple normal prices (due to fuel costs)."
When the drought expanded across the US many farmers believed their only options were to sell their cattle or downsize significantly.
"The net result is fewer calves produced for the feeding market, and obviously fewer finished cattle for slaughter," Mr Moore said.
"Cargill shut down one of its plants in Texas that processed 4500 cattle a day, but could not consistently procure sufficient head," Mr Moore said, adding that "this is in Texas, our largest beef state".
Mr Moore said it wasn't clear whether the shrinking herd in the US would have an impact on imports of Australian hamburger meat.
Meanwhile, rain in eastern NSW and across Queensland was positive for the cattle market, with the benchmark Eastern Young Cattle Indicator kicking up more than 20c a kilogram last week to finish at 333.50c/kg.