The country's biggest farmer, Landcorp, is predicting the drought will shave more than $12 million off its expected livestock revenue for the year.
Updating the economic impact of the drought on its operations, the state owned farming enterprise says milk production from its dairy farms is running 6% below budget and it expects to have to dry off 45% of its 50,000 cows by the end of April, which is much higher than usual.
Landcorp has also shipped about 10,000 lambs from its drought-afflicted North Island farms to farms in Canterbury and Otago.
It says the reduction in livestock and milk earnings, combined with fewer land sales than budgeted, means it won't be paying the Government the level of dividend it had expected to this year.
