China's second-largest meat processor Kerchin Cattle has signed a multi-million dollar deal with two New Zealand companies.

The deal is the first agricultural contract to emerge from the free trade agreement with China and was confirmed during last month's Chinese delegation to New Zealand.

New Zealand companies FoodCap and Te Mania Livestock will sign a co-operation agreement with Kerchin today in Beijing. Prime Minister John Key and Chinese Premier Wen Jiabao are expected to attend.

FoodCap spokesman Alan Mayne said this was an important milestone for the New Zealand meat industry. He would not disclose how much the deal was worth, but said it was in the "millions".

"The deal is beyond the millions. We all know the size of China. The economic value [for New Zealand] is huge."

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Credit: Kelly Gregor, www.nzherald.co.nz