Beef + Lamb New Zealand is expecting higher returns for lamb exports in the coming year to offset a drop in lamb numbers.
From its annual stock number survey, Beef + Lamb NZ has calculated that 2 million fewer lambs will be born this spring, due to the summer drought reducing ewe numbers and lambing percentages in the North island.
It is forecasting an 8.5% drop in the export lamb slaughter from 2013-14.
However, its chief economist Andrew Burtt says improved marketing conditions will outweigh that by lifting the average value of lamb exports by 10%.
He says New Zealand exports more than 90% of its lamb and the markets are improving in a number of the countries it exports to, such as Europe and North America, and China has also been a large growth market over the last few years.
Mr Burtt says the economic fortunes of those countries will help determine what returns are received in New Zealand as well as the New Zealand dollar exchange rate.
"Overall we're estimating that in 2013 -14 New Zealand will earn about 3% more for lamb despite a lower volume," he says.
Mr Burtt says beef cattle numbers are also down because of the drought, with the biggest falls in the East Coast, Taranaki and Manawatu regions.