The British lamb flock is expected to be bigger this year than it was in 2011, but lamb prices are still likely to remain high, according to Eblex.
The UK was forecast to produce 290,000 tonnes of sheepmeat in 2012 - the highest since 2009, when 307,000 tonnes were produced, Eblex said in its Outlook 2012 lamb briefing.
New Zealand lamb production was also likely to be up, but shipments to the UK and Europe would remain below historic levels, keeping supplies tight and prices firm, it predicted.
Producers were monitoring the Schmallenberg virus, but it was too early to tell what the impact would be, it said. As of 5 March, 121 UK farms had tested positive for it.