"That's the first thing. The second thing is that we're seeing falling shipping costs globally, and that's helping meat companies get their product to market much cheaper than it was earlier in the year.
"And the last thing is the New Zealand dollar is playing ball. It's weak, and that's supporting farmgate prices as well.
Listen to Jamie Mackay interview Nathan Penny on The Country below:
"So those things coming together, we think they're the key things over the next few months that should underpin, or even boost, farmgate prices."
Penny said despite higher farmgate prices, farmers were dealing with inflation and higher input costs.
Westpac had emphasised in its report that uncertainty was still a key theme of all these markets, including meat, he said.
Therefore, the market outlook wasn't as clear as it was about six months ago and there was a wider range of possibilities than there were back then as well, he said.
"What could happen and what could keep prices lower than we expect, well the drought in the United States, and the very high levels of destocking that's going on as farmers, essentially, aren't making much money, so they're having to slaughter their capital stock, or their breeding stock.
"But also, we don't know for sure that China is going to come out of its Covid lockdowns and we don't know for sure that Covid restrictions will ease and that China will rebound in the second half of this year.
"And lastly, we also don't know how bad the global economy is going to get. So there are uncertainties, which means there's a wider range around our forecasts than normal."
"But putting that all aside, we're still pretty bullish, and we think it's going to be a good season on the price side farmers."
Penny said red meat prices typically peaked in October.
- RNZ
