One in every four dollars earned from exports last year was generated by Fonterra.
Statistics released by the dairy giant reveal it was responsible for 25% of all export earnings and the dairy sector 27%, but it could have been higher, except for last summer's drought which reduced by 4% the volume of milk collected by Fonterra.
Fonterra last year received and processed 1192 million kg of milk solids, down slightly on the 1246 million kg processed a year earlier.
The Statistics New Zealand data graphically showed the impact of the continued high exchange rate on other exports, but also the speed with which international dairy prices have risen.
Rob Davison, the executive director of Meat and Wool New Zealand's Economic Service, said between the year ended March 2007 and March 2008, export earnings from meat and wool fell from 20% to 16% while dairy rose from 22% to 27%.
Mr Davison said the export earning contributions showed how international dairy prices rose faster than the New Zealand-United States exchange rate appreciated, but also how it impacted on sheep, beef and wool prices where any gains and then some, were eroded by the export-unfriendly exchange rate.
Fonterra chairman Henry van der Heyden said in an interview that the statistics were good news for the economy.
"Dairying is the backbone of the economy and Fonterra keeps on growing."
Mr van der Heyden said the sector's gains as a percentage of export earnings was driven by higher prices and not increased volume.
He has just returned from overseas and said that while it was too early to assess changes in price, the market funda-mentals remained strong and supply and demand remained "finely balanced".
Given more favourable growing conditions and continued strong prices, Mr van der Heyden said the dairy industry could increase its contribution to the economy this financial year.
Chief executive of the New Zealand Manufacturers and Exporters Association John Walley said in an interview that a diverse export sector was desirable, but the reality was that sophisticated manufacturers, such as Fisher and Paykel, were moving overseas.
"We do need increased diversification of the export sector to protect from the slings and arrows that happen in the world. But, we are seeing our export base simplify."
That export base had been savaged in recent years by monetary policy which he said had unsuccessfully tried to tackle inflation but instead had driven up the exchange rate, reducing income for exporters and encouraging manufacturers such as Fisher and Paykel to move offshore.
