Silver Fern Farms says prices for lamb have begun to stabilise which is bringing confidence back into its European market.
The meat processor and marketer says New Zealand lamb prices spiked over the last 18 months, which meant many customers stopped buying.
Silver Fern Farms chief executive Keith Cooper says the high price drove down demand and led to high levels of stock being stored, creating a buyers' market.
He says it has been a long recovery process to get the product back in the supply chain and the challenge is to improve the value it gets from the product.
Mr Cooper is expecting the average farm gate lamb price to bottom out to $4.80 a kilo at the season's peak after Christmas, but increase to $5.80 this time next year.
He says Silver Fern is also forecasting beef prices to lift from $3.60 to $4.20 a kilo and venison to rise from a low of $6.70 to $8 by October next year.