Mr Pacey, who runs his parents Mac and Lynda's 108ha dairy farm milking 300 cows, said they had culled six cows and would be pregnancy testing next week and culling those not in calf because they don't have enough grass to feed the herd on.
They are also supplement feeding with silage and palm kernel to ensure pregnant cows are in top condition.
"There isn't much we can do but soldier on," he said.
Lynda Pacey said November was also a record dry month.
"It's been horrific," she said. "This dry period has come early and we haven't even recovered from November."
Many farmers in the district had dropped to milking once daily and while they didn't normally start drying off before May, they might have to do so if it doesn't rain soon, Mrs Pacey said.
"We haven't yet lost production. We are plodding on but we may need to dry off early."
She said they desperately needed rain.
"I'd do a rain dance if I thought it would do any good ... If we had 15mm and a thunder storm that would be incredibly lovely but we need follow up rain.
"If we don't get rain soon a lot of people will be in a worrying situation."
Rerewhakaaitu farmer Peter Allen said he had culled about a dozen cows and put one herd on once daily milking in early December.
Production had dropped significantly in the past three months but he hoped he wouldn't be forced to dry off his herd too early.
"The main thing for a lot of people is to keep milking. You still have to feed them if you dry off."
Regional Federated Farmers dairy chairman Bryon Osborne warns this dry period is just the start of a drought.
Luckily, most farmers were prepared, Mr Osborne said.
"Most people have de-stocked ... they have had precautions in place."
Soil moisture levels on his property have reached as high as 20C which has resulted in loss of pastures and paddocks were not recovering once grazed, he said.
He estimates this will cost him about $15,000 just to re-sow his paddocks.
He says many other farmers will need to do the same.
"The whole farm will need to be re-sown."
It's already a difficult time for farming budgets with the predicted milk solid payout about $1 less than they were expecting, Mr Osborne said.
"Most farmers are now pro-active ... they are drying off or buying in feed.
"Drying off is a last resort. It's drastic times for many otherwise. Income stops and it affects everyone down the chain."
He holds out hope though.
"It is going to rain."
Springfield weatherman Brian Holden said only 12mm of rainfall had been recorded in Rotorua so far this January.
Normally in January around 100mm is recorded and more dry weather was predicted for the rest of the month, Mr Holden said.
"There is no rain on the horizon. It's a bit of a worry."
MetService forecaster Dan Corbett said right across the region there had been only between 10 and 20 per cent of the normal rainfall recorded for the month.
"We've had some nice days."
He said it would be dry and warm for the rest of the month with temperatures of around 23C and 24C expected to keep the days hot.
"It's going to be perfect for outdoor activities like the beach and barbecues but farmers will need their watering cans. It's going to be reasonably dry."
