Prime Minister John Key says New Zealand-run dairy farming and processing operations in Chile have the potential to grow a lot more.
Mr Key has visited a 150-hectare demonstration farm in Chile as part of his 10-day trip to Latin America.
The demonstration farm is one of two run by dairy processing and marketing company Soprole, which is 99% owned by Fonterra.
Mr Key said Soprole is the biggest dairy company in Chile, supplying about one fifth of the milk in the country.
He said it has the capacity to get much bigger, using New Zealand farming techniques that produce yields of the same level as on New Zealand farms, and to feed the products into the global supply chain.
The farm's manager, Albert Cussen, says there are differences between New Zealand operations in the country and the traditional Chilean dairy farm. These include using grass species with higher growth potential.