Farmers in South Canterbury and North Otago will soon be feeling the pinch of drier-than-normal weather and the situation has is expected to get serious if current conditions persist.
Conditions are also dry on the rest of east coast of the South Island, and in Hawkes Bay and the Wairarapa.
Westpac, in a report, said that without rain over the next couple of weeks "it seems inevitable" that large parts of the South Island will become drought zones.
The bank's head of agribusiness, Mark Steed, said it was preparing to assist its customers in the southern regions.
"We're hearing that some areas south of Timaru have had less than 100mm of rain since June," he said. "It is so dry that some stock is being fed grain on dirt with no feed in sight.
"The rivers are running very low, with some areas running out of stock water, and farmers are starting to feed-out supplementary feed which is hugely expensive at this time of year," he said.
Steed said that if significant rains don't come there would be a potential shortage of winter feed, with majority of dry-land crop yields around South Canterbury significantly reduced. It was "crucial" that farmers kept in contact with their bank and other professionals so they could plan for the coming months, he said.
Ryan O'Sullivan, Federated Farmers' South Canterbury dairy chairman, said drier-than-normal conditions had crept up over a several months.
By the end of last June, the region had experienced two thirds of its annual rainfall but rainfall from July through to December was below average. A hot January had brought conditions to a head, he said.
"If there was significant rain in the next fortnight there would not be a huge cost to it, but January and February are not known for being high rainfall months," O'Sullivan, who farms near Fairly, said.
O'Sullivan said the situation would get "extremely serious" if current conditions persisted over the next six weeks to two months.
As it stands, the Opua dam, which serves South Canterbury, is running low and is expected to run dry by February 10.
North Otago Federated Farmers president Richard Strowger said conditions were dry but that farmers were not pushing the panic button.
"It's definitely drier and it seems to have taken hold," he said. "Not a lot of supplementary feed has been made either," he said. But he said the Waitaki River, which feeds most of the region's irrigation systems, was still running high.
"Farmers have handled this period very well," he said. "It's just a matter now of getting stock through the winter, because we don't have a lot of supplementary feed," he said.
By Jamie Gray, NZME. News Service business reporter