The growth - a rise of 4.5 per cent on last year - has been forecast as part of the latest Cattle Industry Projections update from Meat & Livestock Australia (MLA).

MLA says this year will be a year of transition and maturity for Australia's cattle herd, with any increases in numbers now beyond rebuild status, with all key production metrics forecast to improve this year.

Continued rainfall and favourable seasonal conditions seen last year will ensure that there will be solid supply of both young and slaughter weight cattle over the next two years, regardless of seasonal outcomes, according to MLA.

Southern Australia will continue to drive increases in cattle numbers, particularly New South Wales, with supply improvements also expected from southern Western Australia, South Australia and Victoria to different extents.

MLA's senior market information analyst, Ripley Atkinson, said the growth is underpinned by a few key factors.

"The record retention of females for 15 consecutive months, coupled with above-average marking rates has delivered larger calf drops. This bodes well for supply to increase substantially in 2023 for both young and slaughter-weight cattle," Atkinson said.

"Both of these metrics suggest that the lowest or most significant retention of stock on record occurred for the year. This underpins the positive growth in numbers forecast for the next three years."

By 2025, the national herd is expected to reach its highest level since the 1970s at 29.6m head, before a steady decline. This continued growth is due to strong female reproductive performance, genetic improvements across the herd and sound on farm management.

Input prices and cost of production will be major factors affecting the ability of the sector to remain productive and efficient.

In addition, the availability of skilled and unskilled workers to manage the increased supply of cattle in 2023 will be the major issue affecting the red meat industry. The processing sector's ability to process cattle will determine production levels and therefore exports in 2023.

"If labour concerns are not addressed within the processing sector, slaughter is forecast to reach 6m head," Atkinson said.

"Based on actual supply of cattle this year, the forecasts indicate an uptick in numbers to 6.625m head.

"The overall outlook for Australia's beef industry both domestically and internationally is one of optimism and positivity, whilst it continues to deliver high quality beef in larger volumes, this is expected to be a major feature in 2023."

The complete Industry Projection report can be viewed here: https://bit.ly/3wY9Nwl