Both beef and lamb exports are expected to break the $3 billion mark for the first time, bumping up this season's forecast profit for farmers.
Beef + Lamb New Zealand has released its mid-season update, which shows the milestone for lamb exports was predicted to be reached on the back of a forecast 14% increase in average export value.
Total beef exports, which passed the $3 billion mark in 2014-15, were expected to be $3.2 billion in 2017-18, down 1.1%.
Forecast farm profit before tax had also been revised up to $126,300 for the all-classes sheep and beef farm this season, up 39% on the previous season, B+LNZ chief economist Andrew Burtt said in a statement.
Sheep and beef prices had stayed strong despite increases in the number of sheep and cattle processed so far this season, demonstrating that international meat markets had been strong, Mr Burtt said.
Improved pasture availability and tighter remaining livestock availability would support prices for the remainder of the season. Strong wool continued to perform poorly while fine wool had improved. The average auction price for fine wool was expected to increase by 25%, but a 20% decrease in the average price for strong wool would bring the overall average wool price down by 1%.
The number of lambs, sheep and cattle processed for the December 2017 quarter were all up, leaving fewer to be available for January to September, compared to the 2016-17 season.
The report showed farmgate prices for lambs were expected to average $122 per head or $6.61kg, which was up 15% from the previous season. The mutton price was estimated at $100 per head or $3.94kg. The average estimated cattle price at $5.29kg was 6.9% up on the $4.95 for 2016-17.
Global demand for sheepmeat remained strong due to tight availability from Australia and New Zealand.
Growth in Chinese consumer demand continued to outpace their domestic production, driving import demand.
The weak GBP after the UK voted to leave the EU in June 2016 had benefited UK sheepmeat exports. Those were mostly destined for other EU countries.
Returns for New Zealand sheepmeat exports to the US continued to grow, and demand from the EU was expected to stabilise, but there was strong competition from other meat types.
Gross farm revenue in Otago-Southland was forecast to increase 7.8% to $465,300 per farm for 2017-18, the most significant drivers being dry climatic conditions and strong prices.