That would follow a 3% rise next year to take 2018 dairy returns to $17 billion.
Prospects were also good for horticulture, forestry, wine and arable farmers but less so for the sheep and beef sector.
The outlook across the primary sector is stable for the current year as the dairy industry began to rebound and growth continued for the horticulture and forestry sectors.
But it forecast declines in meat and wool.
Total export revenue was forecast to be $36.7b for the year to June 2017, down $0.3b from the previous year.
MPI sector policy director Jarred Mair said the report showed over the next few years, New Zealand’s primary sector export earnings were forecast to increase by an average of 5.4% a year, reaching $47.9b by the year ended June 2021.
“This highlights again the strength of our primary industries and the benefits of our diversified primary sector.
“However, lower economic growth in trade partners creates headwinds for NZ primary industry export growth”, he said.
Dairy export revenue was forecast to rise 3% in 2017 but was expected to increase 24% to $17b in 2018 as milk production was forecast to return to previous levels after two years of decline.
In addition, recent increases in global dairy prices were forecast to be sustained into 2018.
“It’s very pleasing to see the global dairy market rebounding after a difficult few years.
“The average payout for dairy farmers is now expected to be above break-even for most and there is also continued strong growth for sectors like horticulture, forestry and arable”, Mair said.
Meat and wool export revenue was forecast to fall 10.8% in 2017 as beef production volume fell back from peak levels and prices declined as United States and Australian production recovered.
Demand from China and an increase in wood available for harvest were expected to help forestry exports reach $5.3b in 2017 and exceed $6b by 2020.
“Expanded plantings are expected to increase future export volumes for wine and apples while additional Gold3 kiwifruit licences will help drive horticulture export revenue past $6b by 2020,” Mair said.
