The Ministry for Primary Industries says New Zealand farmers are using less land and less labour to produce 1kg of milk or meat than they were a decade ago.
In a report issued on Thursday, the ministry says sheep and beef farming continues to be the dominant agricultural land use, occupying four times the area used by dairying.
A strategy team has calculated that the average number of dairy cattle run per hectare increased by 5% in the eight years until 2009.
Dairying also increased production per hectare and per animal.
However, during the same period the average number of sheep run per hectare fell by 11% and beef cattle by 8%.
Between 2002 and 2009, the labour used per hectare and per unit of production decreased significantly on all types of pastoral farms which indicates efficiency gains in farm management, including increasing automation.
Debt levels have increased by about 140% for dairy and sheep and beef farms. While the approximate debt ratio is much higher in dairying, the debt ratio in sheep and beef is growing faster, reflecting low returns.