But that will not translate into a significant improvement in before-tax farm profitability which, according to the Meat and Wool New Zealand's Economic Service, was only expected to lift from last year's 50-year low of $16,700 for an average farm, to $45,600.
With dairy company Fonterra expected to announce a decrease in its forecast payout, total sheep and and beef earnings this year were expected to increase $500 million to $4.4 billion on the back of high lamb and beef prices.
The contribution from wool was expected to be lower.
Economic Service executive director Rob Davison said beef prices had over-corrected in recent months as prices fell sharply, but were still expected to be 11% higher than last year as United States consumers switched to lower-value meat products and dining at fast food restaurants.
The bulk of New Zealand beef exports was sold to the US as manufacturing beef for use in hamburgers.
Mr Davison said US cow numbers were shrinking and the number of finishing cows on feedlots was also low.
Low sheep numbers internationally were helping lamb prospects.
New Zealand's spring lamb drop was 23% lower in number which he said would translate to an 18% drop in tonnage.
"This year with fewer lambs around, it would be easier to take them through to heavier weights," he said.
The Australian lamb crop was 6% to 7% lower than last year while the European sheep flock was 2% lower.
"It does mean New Zealand can focus on the higher paying segment of markets, and a bigger proportion of meat will go as higher valued chilled," he said in an interview.
He said lambs that averaged $58 last year would average $80 this year.
Prices and demand for lamb were also helped by more people eating at home and an exchange rate more favourable to exporters.
Countering that optimism was the crash in pelt prices, the result of lower demand because of the credit crunch, but the expected greater demand for lower-value meat should help other by-products such as casings for sausages, while tallow was also enjoying strong demand.
Also working in farmers' favour was a more favourable growing season which allowed them to take lambs through to high-paying heavy weights.
Looking ahead, Mr Davison said prospects for lamb were harder to pick, given it was a luxury product, but he expected beef prospects to remain strong, driven by demand for manufacturing product.
Demand and prices could also be pushed should Russia, a developing market for beef, secure lines of credit and start importing again.
Poor prospects for wool were driven by a lack of consumer confidence for apparel products and the downturn in housing, commercial construction and building refurbishment.
Despite falling fuel and interest rates, Mr Davison said farm input costs were expected to be 6.9% higher than last year, with interest costs likely to be similar, as many farmers increased debt due to last year's low income.
The forecast
Meat and Wool NZ's forecast farmgate product price for 2008-09
Lamb: 38% higher than last year, average $80.
Beef: 11% higher.
Fine wool: 22% lower.
Mid micron: 4.4% lower.
Strong wool: 11.8% lower.
