Forest returns should have risen 6.7 per cent by June.

Despite trying weather, export returns from farms, orchards, forests and fishing are tipped to hit a new record of $42.2 billion by the end of June.

The Ministry for Primary Industries said this would represent a 10.8 per cent annual increase in revenue, the largest since 2014 when dairy prices were at their height.

Every sector is predicted to showed a hike in export receipts in the latest Situation and Outlook for Primary Industries (SOPI) report.

Dairy at $16.7b heads the list of sectors, followed by meat and wool ($9.1b), forestry ($6b), horticulture ($5.3b) and seafood ($1.8b). In 2014 dairy hit $17.7b until prices tumbled.

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* Dairy, forestry and horticulture predicted to lift export returns this year

MPI said its forecast reflected a recovery in dairy prices over the past 12-18 months, rising red meat prices, and high log prices driving record forestry harvest volumes.

Top export destinations for New Zealand goods.

Although dairy cow numbers have fallen by 220,000 since 2016, increasing efficiency and higher value products such as infant formula had lifted export figures.

The report said tougher environmental policies were likely to constrain cow numbers and the land area used for dairy farming, with growth becoming even more reliant on productivity increases and rising proportions of value-add products.

High horticulture returns were driving investments in productivity and competition for suitable land. The kiwifruit growing area alone will have to expand by 7000 hectares by 2025 to meet industry growth targets.

DAVID WHITE/STUFF Buoyant red meat prices will see export returns lift by 9.2 per cent.

The Government's one billion trees programme would also create change in primary sector land use, primarily through increased replanting rates and new production forest area.

Policy and Trade acting deputy-director general Jarred Mair said further gains in 2019 were forecast to be more modest. Some commodity prices were likely to return toward historical trends, and opportunities for further production growth were likely to be constrained in most sector.

Log exports have grown by 30 per cent since 2015, driven by Chinese demand, with no sign of slowing down any time soon. The report noted it had been rare for demand to remain so strong for an extended time.

At the same time, domestic construction has seen a rise in consumption of forest products.

In horticulture, apples and pears, kiwifruit, avocados and wine are all increasing in production. The wine industry is expecting a larger than anticipated harvest following favourable summer weather.

Mussels are New Zealand's most valuable seafood export, expected to fetch over $300 million a year by June.

Mussels are predicted to overtake rock lobsters as the most valuable seafood export by June, followed by hoki, squid and salmon.

Overall arable yields are expected to rise, although high transport costs make it difficult for grain suppliers to compete in the North Island market. It is cheaper to land Australian and North American grain at Auckland and Tauranga ports than send it from the South Island, where the bulk is grown.

RACHAEL KELLY/STUFF Higher value foods such as infant formula are driving dairy exports. The Mataura Valley Milk infant formula processing plant near Gore will start exporting in August.

The report said drought this summer contributed to a record volume of palm kernel expeller (PKE) being imported in the 2017 calendar year. Demand for PKE was likely to fall this year when Fonterra introduces a testing and pricing system designed to discourage its use, because it alters the fat composition of milk.

The honey harvest should be better this year than last year's. The top export market for honey has changed every year, from the UK (2015), to Australia (2016), and China (2017). High world demand for mānuka honey continues to drive this pattern. The United States is currently on track to be New Zealand's leading destination for honey for the year ended June.