Dry weather has forced many farmers to sell their stock much earlier than usual - and there are fears things will get worse.
Federated Farmers national president Bruce Wills said farmers were becoming concerned at the conditions in several areas, with many in the central North Island and parts of the south being forced to take action to cope.
"I've travelled a fair bit this last couple of weeks and I can say ... I'm seeing farmers doing what they should do in situations like this.
"They've been destocking now for some months - selling stock early, buying in feed. This is always an issue when we get dry. This year, many farmers are killing animals a lot sooner than they would otherwise, just because the feed's not there to keep so many animals going."
Farms were having to deal with dry paddocks and trying to find ways to deal with the water shortage.
Mr Wills, who runs a sheep and cattle farm in Hawkes Bay, said the dams he used were becoming increasingly low and he had been opening paddock gates to help distribute water to more parts of his farm.
Meanwhile, farmers around the Waikato will today learn if their region will be declared a drought zone for the third time in five years.
Representatives from the Ministry for Primary Industries, the Waikato Regional Council, Federated Farmers and other stakeholders will meet in Hamilton this afternoon to decide.
Extremely dry conditions over the past five years have twice seen the region declared in drought, in 2008 and again in 2010.
Waikato Regional Council chairman and sharemilker Peter Buckley said a number of water catchments around the region were lower than in 2008 and Lake Taupo had also fallen more this year than in 2008.
He said key indicators including weather, soil moisture, river and lake levels all pointed to another drought.
"I know of some farmers that have sent their culls off farm and dried off their herds quickly and they would normally dry off in May - so the impact is going to be huge for those farmers and their bottom line."
Waikato Federated Farmers president James Houghton said soil moisture deficits were 50mm to 70mm meaning the same amount in rain was needed for a return to normal.
"Really we need 100ml of rain over a period of, say, a week for things to be right again."
Ohinewai dairy farmer and chairman of Rural Support Trust Waikato Neil Bateup said conditions were probably not as bad as in 2008 when drought was officially declared in the first week of February.
He said the last decent rainfall was around Christmas, while at this time of year in 2008 the region had not seen any rain since November.
But Mr Bateup believes conditions have deteriorated more quickly this year as a combination of hot weather and consistent wind had rapidly dried soils. He said he had already had approaches from a small number of farmers possibly needing help.
If a drought is declared, farmers become eligible for two types of assistance including lowering tax obligations for dry stock farmers selling capital stock and emergency benefits for day-to-day living costs.
Meanwhile, Hamilton City Council and Waikato District Council are urging residents to continue to conserve water after 76 million litres were used in Hamilton on Wednesday. The city council warned of a possible total ban on domestic sprinklers.