Sheep and beef farmers will be spending more on their farms this year as a result of a lift in their incomes.
Beef + Lamb New Zealand's mid-season forecast is predicting a 35 percent lift in the average profit for those farms, to $113,700 before tax.
It says the strong demand for both sheepmeat and beef is pushing up returns from overseas markets, with lamb prices expected to lift by 18 percent. Revenue from cattle is also forecast to lift by 7 percent.
Chief economist for Beef + lamb's economic service, Andrew Burrt, says as a result farmers will have more to spend on their farms.
"We've got expenditure up 3 percent. Most of that is going to be driven by some of the more discretionary items such as repairs and maintenance and fertiliser applications which, when incomes are down and in drought years they have the ability to limit what they're doing and can cut back on those sorts of items."
Mr Burtt says some farmers may also use some of the extra income to repay debt hanging over from last year's drought.