The Ministry of Agriculture and Forestry is upbeat about the the prospect of growth for New Zealand's primary industry, with dairy, lamb and beef export earnings expected to rise.
The ministry has released its annual Situation and Outlook report, containing forecasts for the primary sectors.
The report says the strong performance of the dairy sector has contributed strongly to overall agricultural performance.
The ministry's director general, Murray Sherwin, says dairy export earnings are projected to peak next year at just over $12 billion, is 40% higher than last year's export returns.
However, he says growth in the dairy sector will not experience the surge in prices that were seen over the last year.
In the lamb and beef market, Mr Sherwin says prices are improving and the outlook is brighter for both sectors than it has been for some time. Beef export earnings are projected to increase by more than 40% over five years.
In the forestry sector, Asian log prices have lifted recently and demand is growing in China and India, although export volumes remain flat.
Mr Sherwin says the cautionary note is that farmers' costs are increasing strongly, including the cost of fertiliser and transport, and they are paying higher interest rates.
Although traditional Western markets are slowing, the report says there is continued growth in fast-developing Asian economies such as China and India.