The latest March trade surplus shows New Zealand exports topping  $4 billion for only the second time on record, much of it thanks to the dairy industry.

NZ exports were up more than 10%, with dairy exports up nearly 30% despite lower volumes.

Milk powder, butter and cheese marked the largest increase, jumping 19% to $969 million.

Dairy contributed 23% of New Zealand's $39.55 billion worth of annual exports.

Federated Farmers economics spokesperson Philip York says the numbers could be even better if the Government put more money into water storage.

ASB rural economist James Shortall says dairy exports helped slash the annual deficit from $4.7 billion this time last year, to only $194 million this year.