Record venison and velvet prices has led to more deer being farmed, reversing a 20-year slide.
Despite the rise, Deer Industry New Zealand chief executive Dan Coup said a big influx into deer farming was not expected.
The trend was a strong indication of growing farmer confidence in the viability of deer in hill country, Coup said.
Hind numbers in the year to June 30, 2018 recovered to 413,400 from a low of 392,300 in 2017, according to provisional agriculture census figures from Statistics New Zealand. This followed a small recovery in stag numbers in the 2017 census.
Coup said this was the first firm indication that the long-term decline in deer numbers that began in the late 1990s had ended and that a recovery was underway.
Venison had diversified from the traditional European game meat market, with high-value United States consumers now New Zealand's top venison export earner.
Combined with a 30 per cent fall in venison production in the previous three years, this allowed exporters to be more selective where it was sold, leading to record prices, Coup said.
From a record farmgate high of $11.50 a kilogram last spring, a 60kg stag carcass was now returning $9.80 a kg, about $1 a kg less than at the same time last year.
The 2018 increase in hind numbers of around 5 per cent was regarded as sustainable, Coup said.
"If this growth rate continues, it's one that our venison markets should be able to handle. By and large it is coming from the expansion of herd numbers on existing deer farms and to a lesser extent from newcomers to the industry.
"There are a lot of farmers that have had deer fences with no deer behind them." Coup said.
"Modern deer farming is a specialist business. To successfully farm deer you need to make a significant investment in fencing, facilities and skilled staff. Velvet harvesting facilities need to meet the high standards of world markets."
Hind productivity had also improved, with farmers reporting that 84 per cent of hinds weaned a fawn in 2018, compared with fewer than 73 per cent in 2008.
"This increase probably reflects the efforts farmers have been putting into improving hind nutrition and management," Coup said.
PGG Wrightson national velvet manager and Deer Industry New Zealand director Tony Cochrane said despite a steady increase in volumes to more than 700 tonnes, deer velvet prices had lifted another $5 to $7 a kg this season to an average of $133 a kg across all grades, net to the farmer.
"The season started early for both sales and production."
This compared with $60 a kg in 2009 when volumes were about 450 tonnes.
While there was some concern about how much velvet New Zealand could produce without putting pressure on the export market, new markets were emerging in main buyer South Korea and opportunities opening in the giant Chinese market.
Mainly sold as a traditional oriental medicine, velvet was increasingly being used in healthy food products, attracting a new wave of consumers.
"It is the existing deer farmers that are getting bigger and better at what they do," Cochrane said.
"It is now not uncommon for a three-year-old red stag to cut 7kg of velvet, compared with 5kg five years ago."
"It's a good time to be in the deer industry," Cochrane said.