Soil moisture levels in the Bay of Plenty are set to drop with Niwa's climate outlook for autumn predicting below average rainfall.
The news comes after favourable weather conditions this summer helped the region record the highest percentage increase of milk production in the country.
Niwa predicted the region would have a 55 per cent chance of below average rainfall levels from now until May with a 30 per cent chance it would be near average.
Climate principal scientist Brett Mullan said coastal Bay of Plenty had escaped the worst of the dry conditions over summer but deficits would become more extreme towards the southwest.
"The autumn outlook is for below normal or near normal rainfall being likely for the season as a whole. This is not the best of news for farmers and growers.
"However, we expect generally less windy conditions than usual and near average temperatures, so this will reduce high evapotranspiration rates."
Bay of Plenty Rural Support Trust chairman Derek Spratt said moisture levels and water tables were down but fractionally ahead of last year.
"There is more grass cover on at the moment which is good but if we get an Indian summer that could be quite devastating."
Grass growth and germination was dependant on rain, he said, and the weather would play a crucial part in setting up the season for next year.
However, overall farmers were happy, he said. "Milk product is increasing on a daily basis and the higher payout is good."
Dairy NZ chief executive Tim Mackle said rural communities would be celebrating record milk production as well as an increase in Fonterra's forecast Farmgate Milk Price for the 2013/14 season by 35 cents to a record level of $8.65 per kilogram of milksolids.
"Milk production across the country is looking great for most areas, with Bay of Plenty in particular up 9 per cent on the drought-reduced production in 2012-13.
"This increase in the milk price announced last week will give a well-needed boost to community confidence ... Farmers will be feeling confident and able to invest in infrastructure on their farms, may also retire debt but others may be forced to use the extra cash to manage their way through the dry conditions."