A modest 2% increase in primary production that will support growth in export volumes over the coming year is predicted by the BNZ.
In this month's rural wrap, economist Doug Steel said current season primary production growth would be supported by a bounce-back in pastoral production, especially sheep, from last season's weather-induced troubles.
The anticipated lower horticulture production was largely driven by an expected sharp drop in kiwifruit as a result of the bacterial disease Psa-V.
There was also downward pressure on production given last year's very high yields, on average, of kiwifruit, apples and grapes.
But it was the outlook for kiwifruit that was most concerning, as the disease continued to destroy vines.
The severity of the situation could not be overstated, while an intense search for solutions continued, Mr Steel said.
Previous fears that spring was going to reveal a marked rise in Psa positive results were being realised.
As of early November, Kiwifruit Vine Health noted 689 orchards had returned positive Psa-V results - about 21% of all orchards and a figure that continued to climb.
Those orchards accounted for 28% of the nation's kiwifruit hectares, but not all vines on those orchards had been affected. Gold kiwifruit were more affected than green.
The magnitude of the impact on the 2012 harvest was impossible to know with any certainty, but it would be a substantial drop, especially compared with last season's bumper crop, when a very high yield resulted in about 115 million trays being exported.
Dairy was positive and the new season was "already off to a flyer". It was anticipated milk production in 2011-12 would be up about 5% on the previous season, fundamentally driven by more cows through ongoing land conversions and recovery from previous drought helping productivity.
The outlook for sheep and beef was better than last year, which was not difficult given the significant stock losses experienced during last spring's storms.
A decent bounce-back in lambing percentages should result in more lambs, despite a 2.5% reduction in the ewe breeding flock.
Wool production was tipped to be little changed as extra production induced by the best prices farmers have seen in a while would be largely offset by fewer sheep, while beef production in 2011-12 was expected to be up about 3% on the previous season.
