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A smattering of rain across the North Island and upper South Island was allowing farmers there to consider holding on to stock for further fattening.
But in Otago and Southland meat processors are working to capacity as stock is sold off, according to Federated Farmers Otago province president Phill Hunt of Wanaka.
``The pasture has taken a hiding, dying in places. That will have to be replaced over the next two years, at a significant cost,'' he said when contacted yesterday.
It was ``pretty prevalent'' around the district that many recently sown crops had not germinated or struck.
He said the cold front forecast to cross Central Otago tomorrow and Thursday looked like ``intense rainfall'', but he was concerned the ground was too dry to absorb moisture and it would run off.
``There's not the vegetation on the ground to hold the moisture. It could potentially cause surface flooding,'' he said.
Farm irrigation was having to be scaled back because of low water levels, he said.
The National Institute of Water and Atmospheric Research (Niwa) soil moisture deficit data yesterday showed large swathes of Otago and Southland at its severest levels, many times drier than historical averages.
``The only hotspot in the South Island continues to be a sizeable one which covers much of southern and interior Otago and nearly all of Southland,'' Niwa said yesterday.
In response to the dry conditions, Mr Hunt had destocked 20% of his older capital ewes, which would have ramifications for the next two years as he built up the flock again.
Mr Hunt understood all the southern meat processing plants were running at capacity, with day and night shifts and weekend overtime.
He was unaware of any killing backlogs, with one exception where a plant did not have enough water to maintain full capacity.
``People are either delivering stock to the works or to other farmers who do have grass,'' he said.
Federated Farmers website has feed for drought-affected farmers, with offerings from 13 North Island properties but just three in the South Island.
A growing concern is stock feed for winter and spring, with anecdotes some farmers had already dipped into winter stores prepared in recent months.
On Mr Hunt's property, he had planted about 30ha of swedes for winter feed, but less than 1% had germinated.
He expected other farmers would, like him, be considering whether to shortly replant the failed crops with faster growing crops as a replacement, all of which became an added cost.
``The key message is to make decisions as early as possible, based on lessons from the past; be proactive, not reactive,'' Mr Hunt said.
While farmers were generally ``coping'', he acknowledged instances of stresses were beginning to show and counselled farmers to seek assistance from the Rural Support Trust, which has just started running meeting around many districts.
In AgriHQ's Monthly Sheep & Beef report for January, its analyst Reece Brick noted the disparity between the lower South Island and the rest of the country.
``Many areas of New Zealand that were struggling through an extended dry period received a significant volume of rain after Christmas and are now well poised for the coming weeks,'' Mr Reece told BusinessDesk.
However, in Mr Brick's weekly South Island livestock report, he noted Southland and Otago continued to be hurt by dry weather.
``The pressure has mounted on those through Southland and Otago, where thoughts of getting rid of stock have turned into action,'' he said.
``A little relief came in the form of a few showers that mainly swept over western Otago late last week/early this week, but it's all too little, too late.
``The two halves of the South Island couldn't be in more of a contrast,'' Mr Brick said.
The upper South Island farmers were ``just taking the season at their own pace,'' often opting to put a bit more weight on their lambs while they had the feed to do so.
However, in the lower South Island ``the offload button has been hit with a vengeance''.
It was only a lack of pasture growth during the past month which was preventing backlogs at the works ``from bloating to ridiculous levels.''
The impact of the rain in the northern areas was already being felt at the farm gate, with supplies shrinking and demand lifting, pushing up some prices, he said.
The situation in January contrasted with December, when there was a backlog of cattle and sheep at processing plants extending beyond two weeks as farmers sought to offload stock due to dry weather, which had caused prices to fall, he said.
``Supply dynamics are changing. More and more farmers are opting to hold on to stock for further weight gain, and the large backlogs are shrinking week by week.
``This has already impacted on North Island mutton prices, which lifted 10c a kg since the New Year.''
The lack of lambs at North Island saleyards had prompted some buyers to consider buying stock from the South Island, although transport costs meant there was ``zero price advantage``, Mr Brick said.
Overall, he noted the strength of the New Zealand dollar was constraining price gains, although he said procurement competition might stabilise slaughter prices.
``International markets have proven resilient in the face of heavy supplies out of New Zealand.''
Of particular note is US beef market, which had managed to absorb New Zealand production without any further down side. - Additional reporting BusinessDesk