ASB chief economist Nick Tuffley said the terms of trade had climbed to "giddy heights", reaching their highest level since March 1974.
"Strong increases in dairy and meat prices have been key contributors to the rise in terms of trade over the past year. While dairy prices have probably peaked for now, we expect returns to remain high by historical standards over the coming years."
Export prices lifted 1.8% in the quarter with dairy prices up 4.5% and meat prices up 2.9%.
Meat prices lifted strongly due to higher lamb prices. Lamb prices were up 30% on a year ago, he said.
Wool prices also surged, rising 12% in the quarter and a "whopping" 58% over the year.
High cotton prices, as a result of a poor global harvest, had driven stronger wool prices in the past year, Mr Tuffley said.
Import prices fell 0.5% in the June quarter, following the previous quarter's 5.4% rise. Petrol prices rose strongly over the quarter, up 4.3%.
Excluding petrol prices, import prices fell 1.4%, mostly due to the appreciating New Zealand dollar.
Statistics New Zealand figures showed manufactured exports surged in the quarter, with non-food manufactured exports back at their highest level since the series began in June 1990.
Australia was a key destination for New Zealand manufactured exports and the relatively low New Zealand dollar against the Australian currency improved competitiveness in the sector this year.
Mr Tuffley said the fall in dairy exports followed strong growth in the previous two quarters. Volumes were expected to continue to grow in the year ahead, weather permitting.
Forestry exports grew strongly in the previous two quarters but the fall in June reflected a slowing demand from China, due to competition from other supplier countries.
Westpac chief economist Dominick Stephens said strong terms of trade affected the New Zealand economy in two key ways: boosting exporters' incomes directly and strengthening the New Zealand dollar exchange rate.
That improved the purchasing power of New Zealanders overseas but also provided a headwind for non-com- modity exporters and import-competing businesses.
"We think that today's figures will mark the peak in the terms of trade for the near future. We expect a drop of about 6% over the year ahead."
Export commodity prices were starting to head lower as the global economy cooled but Westpac expected that to be partly buffered by an easing in the exchange rate in the next 12 months, Mr Stephens said.
The result appeared to be much in line with the Reserve Bank's projections and had no implications for this month's monetary policy statement.
That conversation would be around whether the renewed turmoil in global markets outweighed the clear signs of activity and inflation pressures building in the domestic economy, he said.
Terms of trade figures measure changes in the levels of prices and volumes of imports and exports of merchandise trade to and from New Zealand.
At a glance
June quarter
• Terms of trade rose 2.3%
• Export prices rose 1.8%
• Import prices fell 0.5%
• Export volumes rose 0.5%
• Import volumes fell 2.4%
