The stubborn skies turned pastures into dustbowls and farmers had a choice of paying thousands of dollars a week for feed or months of searching for food along roadsides in the "long paddock."

But with the return of the rains, slumping cattle prices are on the rise again and grain prices are falling, making feed cheaper.

"It'll be great to see those animals returning home," said Oscar Pearse, policy officer for the cattleman's organisation Cattle Council of Australia.

Australia is the biggest beef and sheep meat exporter in the world from a cattle herd of 27 million and a sheep flock of 104 million.

Many worried that the drought that gripped Australia in 2005 would lead to a repeat of a crop decimation and mass slaughter of cattle that occurred in the 2002-03 drought.

But rains, record levels in some parts, have returned in the past few weeks to the parched eastern and southern farm lands.

"Fantastic falls will improve things immensely," Pearse said. "All around extremely positive."

Last week, rising cattle prices took the eastern young cattle index up by a further 9 Australian cents to 372.25 cents a kg, its highest level since early March.

This followed gains of 17.5 cents and 22.75 cents in the two weeks before that, when rains started to fall, for a 7.6 percent rise over three weeks.

RESTOCKING AND REJOICING

Because of the rain, farmers again are looking to build up their stocks and sales of livestock for slaughter are falling, according to Meat & Livestock Australia, the industry marketing body.

"Three weeks ago, large parts of eastern Australia were bone dry and in desperate need of rain. Now many producers are rejoicing as steady rains have brought some relief from the record dry conditions," it said.

"Overall there is a significant improvement in the outlook for the season in the eastern states. The rains have increased optimism in livestock markets, drawing restockers into the market and causing significant jumps in both cattle and lamb prices over the last three weeks."

Cooler temperatures in more southern areas of eastern Australia would restrict pasture recovery, but much of the moisture would be stored, allowing growth to begin in spring, Pearse said. Elsewhere pasture recovery would be quicker.

Before the rains, shortages of cereal crops loomed, which would have adversely affected feedlot markets, creating a double-negative for cattle prices, he said.