A reduction in the number of sheep and lower lamb numbers which will lead to higher prices, have helped improve dry-stock farmer confidence in the latest Rabobank Rural Confidence Survey.
More than half of sheep and beef farmers surveyed expect the agricultural economy to improve in the next 12-months and 95% of them expect to increase or maintain the level of investment in their business.
Hayley Moynihan from Rabobank says it's possible the sector could improve even more.
She says at this point sheep and beef farmers are likely to be relatively cautious knowing that the peak processing part of the season doesn't really come through until early in the new year.
Ms Moynihan says farmers will also be cautious about what prices will be through that part of the season.
But she says having half of the farmers expecting the agriculture economy to improve and nearly half expecting their own farm businesses to improve is still a good level compared to where they were six months ago.
Federated Farmers president Bruce Wills says the improved outlook for dry stock farming is particularly pleasing following on from a fairly difficult period in the last few years.
He says wool, sheep meat and beef are up on last year but the strong New Zealand currency is still a concern.
Mr Wills says prices are well up, but it's coming off a low base.
Ms Moynihan says the high level of rural confidence comes off the back of continuing high dairy prices.
She says other factors boosting confidence include improving commodity prices, relatively low interest rates and good weather through this spring.
"We don't often get those three things occurring at the same time and really should make the most of it."