Beef + Lamb New Zealand is forecasting a further lift in sheep and beef farm profits this year, driven by the strong prices they are still getting for their meat and wool.
In a mid-season update, Beef + Lamb's economic service estimates the average pre-tax farm profit will be almost $134,000, up 17% on last year.
Director Rob Davison says it will be the second year of good profitability on sheep and beef farms.
He says the increase is coming from much stronger prices and there was an appalling run of low profit years on sheep and beef farms from around 2005 until 2010.
Mr Davison says at that time there was a strong exchange rate of around 79 or 80 cents US, but there were weak international prices.
He says the current exchange rate is 83 cents US, but international prices are stronger which is where the improved profitability is coming from.
Mr Davison says lamb prices for the season are expected to average $115 a head, slightly down last year's record high.
The economic service is expecting export beef prices and average wool auction prices to be similar to last year.
Overall, it's forecasting export returns of $6.6 billion for the sheep and beef sector, which is also holding at last year's level, when export receipts rose by 15%.