The latest GAIN Report produced by the USDA’s Foreign Agricultural Service forecasts the 19% increase in milk production made in 2012 will be eroded somewhat in 2013. However the reduced milk production volumes are not expected to impact export volumes to such a great degree. This is due to the assumption that some of the additional dairy products manufactured in 2012 were held over for sale in 2013. Production of whole milk powder (WMP) is expected to expand as it is the most efficient commodity for New Zealand to produce. New milk powder drying facilities coming on-line in 2013 should mean WMP production will be slightly ahead of 2012 at close to 1.3 million metric tonnes. Skim milk powder (SMP) volumes are expected to be similar to 2012, while fat and cheese production is expected to fall.