Federated Farmers is warning against any action to boycott Australian products after two major supermarkets across the Tasman decided to remove New Zealand products from their house brands.
Coles and Woolworths Australia are refusing to renew contracts as part of a buy local campaign, using products for their home brands only from Australian sources.
Australia is this country's second largest export market, behind China.
Federated Farmers national president Bruce Wills says this country is Australia's sixth largest export destination and any retaliation by snubbing their imports would be unwise.
"Any tit-for-tat, I think we would be on the losing end." he said.
Mr Wills said more than 90 percent of New Zealand products are bought by overseas consumers and this country should continue to focus on producing high-quality food at a good price.