A senior climate scientist says the West Coast of the South Island is the driest it has been in nearly 80 years.
Farmers there want the region declared a drought zone and although rain is forecast this weekend, they say that will not bring quick relief.
Climatologist Jim Salinger says the conditions on the coast are probably not as harsh as in the North Island - all of which was declared in a state of drought yesterday - but that is is likely that a formal declaration of a drought status for Westland will be made.
Farmers in the Tararua district on the east coast of the North Island are having to dry off dairy herds two months earlier than normal, something unheard of for many farmers there.
It is the latest sign of how drought conditions are affecting the North Island. The entire island was officially declared on Friday to be affected by drought.
After nearly two months without a drop of rain in Tararua, the region's Federated Farmers president Richard Murfitt says in places such as Eketahuna, farmers are drying off dairy herds earlier than they ever have.
He says farmers there are normally safe in the summer, with winter their difficult period, but this year the summer conditions are totally abnormal.
Fonterra says it cannot comment on the effect drying off herds will have on the price of milk because the Fonterra Shareholders Fund is listed on the sharemarket. There are NZX rules around the release of potentially market-moving data.
But at the end of last month, Fonterra chief executive Theo Spierings said while it had a strong start to the season and milk collection volumes were running 6% ahead of last year, the dry conditions meant it was forecasting total milk collection volumes to finish only about 1% ahead for the full season.
Rain no drought-breaker
In the South Island, West Coast farmers say they will not get quick relief from rain expected to fall this weekend.
Farmers want the region to join the North Island in being officially declared as being affected by drought so they can get financial help from the Government.
But the North Island arm of Federated farmers says it would make sense to declare a drought on West Coast of the South Island rather than wait for the inevitable to happen.
Federated Farmers Manawatu dairy chair, James Stewart, says farmers throughout the island have for some time been batling drought conditions, so the formal declaration was no surprise.
He says it's obvious there's a drought on the West Coast and declaring it won't bring rain, at least farmers will get recognition their region is in trouble.
West Coast farmers say they will not get quick relief from the rain expected to fall this weekend.
Rain is forecast tomorrow for parts of the South Island , with Metservice warning of heavy falls in some places.
Buller and Malborough will get rain while Westland, south of Otira, and the Bryant and Richmond Ranges will experience the heaviest falls.
Metservice is advising people in these areas to keep an eye on rivers and streams as they could rise rapidly, causing surface flooding and slips.
Nelson, where there's been rain for only two days in the past 30, can also expect some relief on Sunday.
But West Coast Federated Farmers president Katie Milne says even if the rain does come, things will not improve quickly.
She says the production of crops is down and feed for stock is much more expensive.
Ms Milne is encouraging farmers to check their budgets and look after each other.
Banks say they are already seeing stressed farmers and are trying to help by deferring loan payments.
Rural lender Rabobank's chief executive Ben Russel says as the drought continues, banks are seeing more worried farmers.
"Progressively farmers see the amount of grass they've got for their livestock worsens in condition and then runs out and then they become concerned about the welfare of their animals."
"Finally they have to confront the financial impact of the drought," he says.
ANZ's Agribusiness manager Graham Turley says bank staff are talking to farmers and in some cases putting payments off.
The Government is likely to decide during the next fortnight on the West Coast's request for a formal drought declaration.