But prospects for lamb remain brighter, with European Union lamb cut prices 30% higher than a year ago and prices for racks and forequaters from Asia and the United States up 28% and expected to remain firm.
This has translated to farmgate returns for lamb 25% to 40% higher than a year ago.
"The sentiment gives us a level of confidence, particularly with less lamb production out of New Zealand," Silver Fern Farms chief executive Keith Cooper said yesterday.
Mr Cooper said prices from all lamb markets showed improvement, although the US was not as positive as Europe and the United Kingdom.
But the same cannot be said for wool, with prices at last Thursday's sale of 22,000 bales in Napier and Christchurch as measured by the weighted currency indicator, strengthening just 1% compared with the last sale on December 18.
Prices which had been in falling, appear to have been arrested, and there was a noticeable increase in competition from buyers.
The strong wool market indicator has fallen from 364c a kg at the start of the season in August, to 294c a kg on Thursday, and earlier last week the ANZ Commodity Price Index showed wool had led the decline in commodity export returns, with prices plummeting to just 2% above the lowest level ever recorded by the index since it started in 1986.
In contrast, meat exporters remained quietly confident, with beef prices, which have tumbled in recent weeks, also showing some improvement as supplies from Australia and the US fell.
Prices were 25% to 30% up on last year.
New Zealand Wool Service International deputy managing director, John Dawson, said he was encouraged by the tone of last week's wool sale, given the large offering.
"There are tentative signs the market could be flattening out," he said in an interview.
There was noticeably more competition, and buyers and industry sources told exporters they believed the key US market, which took the bulk of the world's production of carpets, rugs and clothing, would recover from the middle of this year.
"If that happens it will be felt by the wool industry because the US is the biggest end-product market for wool."
At last week's sale, prices for mid-micron wool increased between 4% and 7% but coarser types eased by up to 3%.
Lamb's wool continued to meet strong demand, mostly from China where the fibre was used domestically for knitting yarns and clothing.
Mr Dawson said 27.5 micron lamb's wool and finer rose in price by between 7% and 9% and 28 to 29 micron rose 1.5% to 2%.
The bulk of the offering was hogget and coarse carpet wool which generally strengthened in price during the sale, ending the day up between 2% and 4%, while good-style coarse fleece eased 1.5%.
This week's sale would offer 12,000 bales of NZ wool.
