Farmers are restoring their bank balances after experiencing a lift in profitability, according to a recent report.

The Ministry of Agriculture and Forestry, released its 2011 pastoral farm analyses, part of the annual Farming Monitoring Report which provides an overview of the financial performance of typical dairy, sheep & beef, and deer farms.

The report says dairy incomes lifted significantly in 2010/11 despite a year of difficult weather.

The report also shows an increase in dairy production and gross dairy incomes have lifted by 23 percent since the low of 2008/09.

Sheep and Beef farm product prices increased to record levels in 2010/11.

While lambing was down from 129% to 119%, better prices for lamb, wool and beef more than offset this.

Deer farmers have also been able to achieve a good financial result in 2010/11 with venison returns at above five year average levels, MAF reports.

The report says farmers are now able to concentrate more on debt reduction and boosting productivity.

Farmers have taken advantage of the situation, and invested in capital equipment such as tractors and vehicles. But they are conscious that returns could go down as quickly as they went up.