A farmer group campaigning for meat industry reform is concerned that reports about improving prospects for sheep and beef farmers are creating a false impression of the state of the industry and the need to restructure it.
Beef and Lamb New Zealand is forecasting an eight percent lift in the average sheep and beef farm pre-tax profit, to more than $110,000.
It will be due to a combination of higher lamb and beef prices, better climatic conditions and an easier exchange rate, Beef and Lamb's Rob Davison said.
Mr Davison said while that profit level still isn't great, it's a lot better than it was.
"It's well up from where it was around $80,000 a couple of years ago with the big drought and low overseas prices," he said
"So, what we've seen is that even though we've got a strong dollar, international prices have come up, and that's helped us and with our production levels, we're expecting reasonably good weights on our stock too, which will cumulatively add up to this better outlook."
But Meat Industry Excellence group chairman John McCarthy said a small increase in lamb prices should not distract farmers from the need to sort out deeper issues in the meat industry.
"My message to farmers is, don't be duped by this, the increases are not huge, and the fundamentals remain the same."
He said there was still a massive overcapacity in the processing sector, that had been growing and costing "huge" amounts.
"And we've got an insane emphasis around the procurement platform, whereby we have competition for procurement on a shrinking pie, but basically to keep chains open, and that's not a market focus."
"We should be looking at what's the best price in the world that people are receiving for lamb, and that should be where we're aiming.
"And we can't do that under the current model with all the players competing and driving the price to the bottom."
Mr McCarthy said the Meat Industry Excellence group expects to release it's business analysis of the red meat sector in a few weeks.
Meanwhile, the deer industry is seeing signs of a lift in venison prices.
Deer Industry New Zealand said prices for chilled New Zealand venison in the main European market are reported to be up by about 5 percent on last year, and exporters are hoping for reduced competition from European game meat supplies.
But it said prices to farmers are currently being held back by a stronger New Zealand dollar, which is trimming seven percent off average farmgate prices.
