China's vast appetite for New Zealand's dairy and meat products is set to boost returns to the nation's farmers.
The Ministry for Primary Industries is forecasting the primary sector will earn $36.4 billion in the year to June - $5 billion more than estimated six months ago.
The ministry has lifted its annual forecasts for primary export earnings by 15 percent, thanks to stronger-than-expected demand from China for dairy and meat products and logs, and supply constraints globally for dairy and meat products.
It forecasts agriculture, forestry, and fishing exports will grow by $4.9 billion in the 12 months.
Dairy returns are predicted to rise by $2.7 billion in the June 2014 year, and meat exports by $1.2 billion.
The ministry says world demand for sheep meat has risen as China, now New Zealand's biggest market, is consuming more and demand is recovering in the United Kingdom.
Log prices also increased by 30 percent in the second half of last year and forestry firms are expected to take advantage of higher international prices by increasing harvest volumes.
Production constraints also played a part in the revised forecast, with drought and higher grain prices in Europe and the United States limiting supply globally.
Total earnings are forecast to ease slightly in the 2015 financial year, to $35.7 billion.
Primary Industries Minister Nathan Guy says it's good news for the economy and another step in the government's goal of doubling primary sector exports by 2025.
Some commentators argue New Zealand should focus on producing more value-added exports rather than send unprocessed commodities overseas, which are vulnerable to volatile prices.
