The dairy industry's billion-dollar importance to Otago and Southland has been highlighted in a recently-released NZIER report commissioned by the Dairy Companies Association of New Zealand.

Dairy made up about 5 per cent of Otago's GDP and about 10 per cent of Southland's which, in real terms, meant Otago earned about $400million from dairy and Southland earned $700million, Fonterra's head of Farm Source for Otago and Southland, Mark Robinson, said.

The report was commissioned as part of DCANZ's input into the recent Ministry of Foreign Affairs and Trade's Trade for All Agenda consultation.

It showed the dairy sector - New Zealand's largest export sector - accounted for $8.2billion - or 3.1 per cent - of New Zealand's total GDP, as of March 2017.


That was shared between dairy farming ($6.3billion) and dairy processing ($1.9billion).

It was the fifth largest industry in New Zealand behind finance, construction, real estate and health.

The value of dairy exports had risen by nearly three times from $6.3 billion in 2001 to $17.1 billion in 2018.

Since 1990, dairy export value had increased nearly eight-fold.

The dairy sector remained New Zealand's largest goods export sector by some margin.

At $17.2 billion in the year to March 2018, it generated more than two and a-half times as much as the meat sector, more than three times as much as the wood sector and 10 times as much as the wine sector.

Waimate, Southland and Clutha districts were all territorial authorities in which it was among top 10 employers for both dairy farming and processing.

Dairy provided over one in four jobs in the Waimate district, over one in six in Southland and over one in 10 in Clutha.


Mr Robinson said a profitable dairy industry supported a productive economy.

The ''halo effect'' started on-farm and there was then a ripple effect from there.

It was important to acknowledge agriculture as a whole, not just dairy, and in smaller areas, such as Balclutha, the Silver Fern Farms plant at Finegand and Fonterra's cheese factory at Stirling were very critical parts of the local community, he said.

It was those sort of agricultural entities that helped smaller rural areas thrive.

The Stirling factory employed 100 people and produced about 50,000 tonnes of product a year, and the staff were ''incredibly proud'' of what they did, he said.

DCANZ executive director Kimberly Crewther said a 70 per cent increase in export revenue per cow had been achieved since 2001, and a 43 per cent increase in export revenues per kg of exports since 1990 reflected value addition from diversification of processing.

Dairy manufacturers had invested more than $3.1billion in processing facilities in recent years.