Six regions in the North Island are officially in drought and the Ministry for Primary Industries says rainfall in the next two months will be critical as farmers prepare for winter.
Primary Industries Minister Nathan Guy declared a drought in five North Island regions on Wednesday.
South Auckland, Waikato including Taupo, Bay of Plenty, Coromandel and Hawke's Bay have been added to the drought declared in Northland last week.
Manawatu and Rangitikei on Wednesday afternoon became the latest to ask the Government to declare a drought in their regions.
Andrew Hoggard, Federated Farmers' provincial president for Manawatu and Rangitikei, said in many areas, conditions are now at least as bad as they were five years ago when the region was last officially in drought.
"Especially the Rangitikei. I'm hearing that things have got to the stage where they're as bad as they were in 2008 or worse in many cases.
"There's a similar situation in the northern Manawatu, the southern part of the province and also the Horowhenua just slightly better off - but still, it's not ideal."
Mr Hoggard said the next step is to bring rural communities together to support each other and a drought declaration would reassure farmers that it is not their lack of abilities, but a widespread problem.
Wairarapa representatives will hold a drought meeting next week.
Stuart Anderson, a resource policy manager with the Ministry for Primary Industries, said the amount of rain in autumn would have a big impact on farmers.
"What's really critical in terms of how this drought situation unfolds is how much rain is actually received during March and April, being quite critical autumn months for growth to set farmers up for the winter."
Mr Anderson said the ministry is also closely watching other parts of the East Coast, as well as Wairarapa, Manawatu and Taranaki, which are also extremely dry.
Federated Farmers said the moisture deficit is so high in many places that even if it started raining on Wednesday night, it could be about four weeks before grass recovers enough for stock to graze on.
The National Institute for Water and Atmospheric Research is predicting very little rainfall in March.
Extra funding available
Primary Industries Minister Nathan Guy said on Wednesday the drought has been declared a medium-scale event and extra government funding will be available to Rural Support Trusts.
Rural assistance payments equivalent to the unemployment benefit are available from the Ministry of Social Development for those in extreme hardship as well as standard hardship payments.
Mr Guy said farmers should contact Inland Revenue if they need help with tax payments.
Milk prices up
Federated Farmers says a sharp rise in international milk prices will not offset the cost of dry conditions for dairy farmers.
The drought in parts of New Zealand caused a spike in global dairy prices, which rose 10% in an auction overnight on Tuesday.
But Federated Farmers Waikato president Peter Buckley does not expect the rise to translate into profits.
"A lot of the farmers will make losses. Previously before the drought, there were roughly 25 percent of the farmers as I understand that had some concerns over their finances, and with this drought I would say it would have at least doubled that."
Mr Buckley said any extra money would be swallowed up by the increasing cost of feed, while milk production would drop off sharply if there isn't significant rain in the next fortnight.