Figures released by Stats NZ yesterday showed numbers increased 2% nationally, although not back to the 2014 level of 6.7million.
The North Island dairy herd increased by nearly 250,000 cows, led by a 5% increase in Waikato.
In contrast, the number of dairy cattle in the South Island fell more than 100,000 in the year to June 30. Otago's herd fell by 73,000, or 19%.
The increase in the national herd came at a time of subdued international milk prices and lower milk solid payouts.
In the year ended December 2016, exports of dairy products were worth $12.8billion.
This was more than 26% of all exports and a value of almost $2500 for every milking cow.
Even though there were four times as many sheep as dairy cattle in New Zealand, sheep-related exports were valued at $3.6billion, just over one-quarter of dairy's total.
The results showed continuing declines for sheep and deer numbers, with beef cattle being relatively unchanged.
There were 27.6million sheep in 2016, a 5% decrease from 2015. Sheep numbers in the South Island dropped by 719,000 (5%) and by 818,000 (6%) in the North Island.
Dry conditions in the South Island and facial eczema in the North Island both contributed to the decreases, the report said.
Regions with the most significant decreases were Manawatu-Whanganui, with 479,000 fewer sheep and Southland, down 361,000.
Deer numbers continued to decrease to 835,000 at June 30 last year.
Numbers have been falling since 2004 when they peaked at 1.8million.
Otago had the second largest decrease in numbers, down 14,000 (11%), behind Manawatu-Whanganui at 15,000, or 24%.