Milk production fell 3% in MY 2008 due to a drought that engulfed most of New Zealand during the summer months. Production is forecast to rebound by 8% in MY 2009, due largely to an increase of approximately 200,000 cows over the past two years. The drought and resulting downturn in production led to a 13% drop in dairy product exports in MY 2008. However, exports are forecast to rebound in MY 2009 with cheese and nonfat dry milk expanding by 15% and whole milk powder by 13%.