The long, hot summer has cost southern farmers more than $100 million in lost income and, nationally, the cost has been calculated at $1.24 billion.
The Ministry of Agriculture and Forestry said the $1.24 billion national cost was the result of lower production and unexpected costs such as buying supplementary feed.
Maf's drought co-ordinator Phil Journeaux said a study of income from representative farms in Otago and Southland showed income from an Otago dry hill country farm this year would be about $25,200 lower than last year, an Otago-Southland hill country farm $22,000 less and an intensive Southland and South Otago farm $14,600 lower.
Dairy farmers were hardest hit. Income from a Southland dairy farm would be $166,000 lower than budgeted.
Calculated over all farms south of the Waitaki River, that equates to well over $100 million.
Income on Meat and Wool New Zealand's South Otago monitor farm at Te Houka this year would be $48,000 lower than budgeted after lambs were sold at lower store prices instead of prime, and what lambs were sold as prime were lighter than last year.
Federated Farmers Otago Meat and Fibre producer's chairman David Botting said cattle on the monitor farm were also sold to the meat works at lighter weights and stock had to be sent to grazing.
Supplies of hay and silage on the farm were half of what they would normally have, but winter feed crops were better, with yields about 20% ahead of normal.
‘‘Farmers will get through with careful management,'' Mr Botting said.
Recent rain has seen some grass growth but he said farmers were hoping for more during autumn.
The federation's Otago chairman, Richard Burdon, said northwest winds had cancelled out any benefit from recent rain on his Wanaka farm.
North Otago Federated Farmers president Robert Borst said what had been a traditionally dry summer was now bordering on something more serious and rain was needed to boost winter crops and grass.
‘‘The closer we get to winter the less likely we are to get as much grass to grow.''
Agriculture Minister Jim Anderton said in a statement that, nationally, the drought had cost the dairy industry $894 million and sheep and beef $345 million.
It could not have come at a worse time for sheep and beef farmers.
‘‘Sheep and beef farmers are in a very weak financial position following two years for poor profitability. The drought couldn't have come at a worse time in the commodity price cycle for our dry stock farmers.''
Mr Journeaux said the higher milk payout for dairy farmers would almost be wiped out by the lower production and unplanned costs.