Beef and Lamb New Zealand is forecasting a good season for farmers off the back of steady prices and production.
The new season outlook is forecasting sheep and beef farm profits to rise on average by 6.6 percent before tax to $90,200 for 2017-2018.
Chief economist with Beef and Lamb, Andrew Burtt said this year's outlook was a steady improvement.
"It really ties into a whole lot of things over many years that farmers have done to reduce their expenditure and costs.
"On the other side there's continuing stable strength in the markets."
He said much of the outlook for this season depended on the value of the New Zealand dollar, which was expected to ease as major trading economies strengthen.
Mr Burtt said last spring many farmers held onto their lambs to rebuild their stocking numbers, and this year there could be more lambs for processing.
He said Beef and Lamb New Zealand was picking the lamb crop to be down slightly.
"Overall indications are that despite those good climatic conditions the pregnancy scanning results have been mixed.
"We've got the lamb crop expected to be back a little bit across the whole country. We'll produce a final estimate once we complete our lamb crop survey in November."