The dairy downturn is having an impact on bobby calf processing, which is now underway at meat plants around the country.
Newborn calves, mainly bull calves, that farmers do not want to raise for dairy or beef production are sent to the works to be processed for veal.
Alliance Group livestock general manager Murray Behrent said there were indications that more calves were being kept to rear for beef this year.
"Numbers coming forward are slightly back generally over the whole country, mainly due to a higher retention of Holstein-Friesian bobby calves or bull calves being reared, which is good for the long term of the beef industry."
He said the high beef prices had a bearing on that.
"But there's also going to be a number of dairy support farmers looking for some alternative income, given that they're losing some of the dairy heifers that are being taken back to the dairy farms, so they're looking for something else to graze their properties."
Mr Behrent said the bobby calf price was up on average by $2 to $5 on last year.
He said as a result of the low milk prices, dairy farmers were also sending poor performing in-calf cows to the works, and some have indicated they would also be culling poor performing cows from their herds earlier than usual, about November to December.
AFFCO, the biggest North Island processor of bobby calves, was reporting similar trends.
National livestock manager Tom Young said the calves were fetching an average price of about $35 each.
"Probably farmers are choosing to keep the better bull calves, so the price of milk being what it is, we think a few of them are going to rear a few bull calves and try and sell them to improve cash flow.
The kill started off probably slower than we thought it would, but it's catching up on itself now."
He said the demand for veal had probably come back slightly, but the US market was still strong.
"Quota issues have impacted on volumes into the US, so most companies have diversified into different markets, Asia, Middle East, Eastern Europe.
"We've been helped along by the exchange rate, which has helped us to keep the price reasonably firm to the farmer.
"From a pricing perspective it's come back a few cents, but it's not marked.
"Things have softened a wee bit offshore, the skin values have come back a wee bit, but what's been lost in the meat and skin revenue has been made up by the currency working in our favour."