Beef and Lamb New Zealand's Economic Service is forecasting a small drop in sheep and beef farm profits this year, after last season's dramatic income lift.
In its outlook for the new season the service says pre-tax farm profit rose by 75% last year thanks to a significant lift in international prices for meat and wool.
This year, however, it's predicting a 7% fall in pre-tax profit, mainly because it expects the New Zealand dollar to appreciate further against other trading currencies.
It says that will offset the gains made from the larger volumes of lamb and beef that will be exported this year.
The service expects wool supply to be trimmed back a little this year because of fewer sheep numbers, but it's picking wool export earnings to be similar to those of the previous year at $718 million.