The El Nino generally increases winds from the west and southwest, leading to dry conditions in the east and more rain in the west.
As it gathers momentum, concerns have been raised about how much it could affect the country's gross domestic product (GDP). Primary Industries Minister Nathan Guy remains concerned about low rainfall in many southern areas, soil moisture deficits and winter feed availability, noting the South Island's entire east coast is in a ''medium scale adverse event''.
The Otago Chamber of Commerce raised concerns last week the declining dairy payout could coincide with an El Nino drought, creating a double whammy for dairy and livestock farmers alike.
BNZ senior economist Doug Steel said the drought declaration that remains in force on the South Island's east coast was testament to the El Nino like indicators that had persisted for much of the past year.
''The impact of El Nino on New Zealand agriculture has tended to be negative in the past,'' Mr Steel said.
He stressed it was difficult to accurately assess the effect of weather on agricultural performance and the economy as a whole, citing poor quality data as the first hurdle.
''[However], the brewing El Nino risk is well worth monitoring to see how this one pans out.''
He said annual growth in milk production averaged 1.4% during El Nino years, compared with overall average growth of 4%, since the late 1970s.
''So in general, El Nino conditions have tended to restrict New Zealand milk production growth rather than turn it seriously negative.''
Similarly, changes in livestock kill numbers corresponded to changes in the climate. Data during the past 30 plus years showed that livestock kill numbers tended to increase during El Nino years.
''This likely reflects an undesirable situation, as farmers run lower stocking rates when dry conditions put pressure on feed supply,'' he said.
The El Nino conditions and associated low Southern Oscillation Index tended to be negative for New Zealand's agriculture and recent average SOI levels indicated the clear risk that agriculture GDP would decline over coming quarters.
''We say risk because there is not always a one for one relationship - but a decline seems more likely than not,'' Mr Steel said.
Last Wednesday, Mr Guy announced an extra $20,000 in support for the North Canterbury Rural Support Trust, after meeting drought affected farmers in Cheviot and North Canterbury.
''North Canterbury, and the Cheviot area in particular, has missed most of the recent rainfall and continues to face severe drought conditions,'' he said.
In February, the drought from Marlborough to Otago was classified as a medium scale adverse event, triggering additional government support. North Canterbury now has the highest soil moisture deficit in the country and has recorded the lowest rainfall for January to March since 1972.
''Despite recent rainfall, farmers and growers are still feeling the impacts of these prolonged dry conditions,'' Mr Guy said.
After meeting farmers and community leaders, he said the major concern was feeding livestock through the coming winter. It was important farmers revised their feed budgets now, he said.
It was likely the medium scale adverse event classification would remain in place until August or September this year, depending on autumn conditions.
He said the Government had funded $120 million within two Budgets for Crown Irrigation Ltd to invest in major projects, plus the Irrigation Acceleration Fund, which was investing $28million in 18 projects around the country.
