New Zealand's primary industry exports are forecast to rise nearly 11 per cent in the year ending June 2018 to $42.2 billion - the largest annual increase since 2014 - the Ministry for Primary Industries (MPI) said in its latest quarterly update.

The ministry's latest Situation and Outlook for Primary Industries report shows export revenue across all of the sectors has been strong over the past year, particularly for dairy, meat and forestry.

"Dairy export revenue is expected to increase by more than 14 per cent in 2018 due to a recovery in prices over the past 12 to 18 months," Jarred Mair, MPI's policy and trade acting deputy director general, said.

"It is also the result of more milk being processed into higher value products such as infant formula," he said.

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At the same time, the latest numbers show that dairy cow numbers have fallen since 2016.

Global red meat prices are expected to increase export revenue in the meat and wool sector by nearly 10 per cent in 2018.

"Forestry exports are also forecast to grow by more than 11 per cent in 2018, supported by record harvest levels and ongoing demand for New Zealand logs from China," the report said.

High returns and new policies are likely to create investment opportunities across the primary industries, it said.

For example, high horticulture returns are driving investments in productivity and competition for suitable land.

The Government's One Billion Trees Programme is another catalyst for investment and changing land use, primarily through increased replanting rates and new production forest area, the report said.