Exports of sheep and beef products in the year ended June increased 9% to $5.8 billion, despite lower volumes.
Beef and Lamb New Zealand's annual stock number survey showed sheep numbers were down 2.1%, to 31.9 million, while the beef herd stayed almost static at 3.9 million (-0.2%).
The decrease in sheep numbers flowed on from the tough spring last year, which resulted in a low supply of lambs this year.
That in turn had cut the supply of lambs that could be held over as future breeding flock replacements.
Tight global supplies of lamb and sheep meat saw world market prices lift significantly, Beef and Lamb's economic service executive director, Rob Davison, said.
In the year ending June 30, lamb generated $2.7 billion, 3.4% ahead of last year but from reduced export volumes (-15%).
Lamb meat at $9300 per tonne was up 17% and receipts from co-products, such as lamb skins and offal, were also up 17% on the previous year.
The decline in the ewe flock ensured mutton exports receipts were the "stand-out story" - up 35% to $580 million, with the volume shipped up 15%.
Strong prices and favourable conditions, particularly from autumn, had boosted confidence on sheep and beef farms, Mr Davison said.
Early expectations were for this spring's total lamb crop to be up 1.4 million on last year's poor result, to 26.2 million, which would still be the second smallest lamb crop in 50 years, he said.
With sheep numbers expected to have bottomed out, a higher retention of lambs for flock replacements was needed for next year to start a small recovery in sheep numbers.
While North Island sheep numbers decreased an estimated 3.8%, South Island numbers remained almost static.
Breeding ewes in Otago and Southland declined 1% and 2.8% respectively because of the higher than usual ewe losses during last spring and more wet-dry ewes were slaughtered than usual, also because of the storms.
Otago saw the largest increase in beef cattle numbers in the South Island, up 9.2%. Good feed covers and strong prospects for beef led to more animals being retained on-farm.