Primary sector export revenue forecasts are up for all sectors, except dairy, in the year ended June 2016, the Situation and Outlook for Primary Industries' December update shows.
Overall, sector revenue was expected to increase $37.6billion, up $1.9billion from the year ended June 2015, while dairy exports were forecast to fall 4% to $13.5billion as volumes fell and prices remained low.
But growth in the meat and wool, horticulture and forestry sectors would "more than offset'' the fall in dairy exports, the report said.
Lower stock levels and less favourable growing conditions were expected to drive a 7% fall in milk-solids production.
Dairy revenue was expected to recover in 2016-17.
The meat and wool sector was expected to continue strong growth, with a forecast revenue increase of $910million, a 10.1% increase on the previous year, driven by strong demand for beef exports from the United States.
New Zealand will meet its allowable beef export quota to the US this season for the first time since 2004.
Chinese demand for wool also remained strong.
While it had been a challenging year for lamb, both beef and wool were performing strongly and that was reflected in the strong forecasts for the industry, Federated Farmers meat and fibre chairman Rick Powdrell said.
"Our sheep and beef farmers continue to perform strongly, with significant increases in average weights, and this is enabling us to capitalise on strong market conditions such as those we are currently seeing for beef exports to the US.''
Federated Farmers was also pleased to see forecast growth in export earnings for the arable sector, up 20%, or $36million, to $213million.
Forestry was forecast to grow $613million, despite reduced Chinese demand for logs.
The Ministry for Primary Industries expected an increase in exported timber volumes to help offset that reduction.
Pipfruit and wine revenues continued to grow as kiwifruit yields reach record levels and wine suppliers utilise past season vintages to support increasing consumer demand for New Zealand products.
The horticulture sector outlook was strong, with an expected $700million export revenue increase forecast in the June 2016 year.
Meanwhile, the number of dairy cattle has dropped for the first time since 2005, with 300,000 fewer dairy cattle than in 2014.
Both the national dairy milking herd and the replacement herd had declined, Statistics New Zealand said yesterday.
During the same period, sheep, beef and deer numbers also fell.
Sheep declined by 300,000 to a total of 29.5million as at June.
