Heavy rain offsets drought fears, relieves pressure on national grid

Heavy rain in the South Island has alleviated farmers' fears of drought and has taken the pressure off a stretched national power grid.

Canterbury farmers have been able to switch off their irrigators thanks to high rainfall over much of November, which contrasted with a very dry October.

ASB senior rural economist Nathan Penny said rain across the country had lessened the likelihood of drought and that it was looking like strong dairy production would continue through into the new year.

Milk production is already shaping up to be the highest on record, thanks to favourable conditions over spring, which has put downward pressure on whole milk powder prices.

"It's more of an opposite problem - there could be an issue of too much milk," Penny said.

Chris Allen, who has a sheep and beef farm in Mid-Canterbury, said this month had been the wettest in his 25 years on the property with 200 mm of rain so far compared with just 8 mm in November last year.

Allen, who is Federated Farmers' spokesman for water and the environment, said improved rainfall had allowed crops in Canterbury to become established.

"There is good soil moisture levels and the aquifers are up," Allen said.

Irrigation dam levels were also high and the main rivers, Rangitata, Rakaia and Waimakariri, were all running strongly.

"All the stars are lining up at the moment, but in Canterbury things happen pretty quickly," he said.

Further south, too much rain was causing problems for livestock farmers in Otago and Southland through pasture damage, he said.

Rabobank dairy analyst Emma Higgins said most of the country faced favourable growing conditions, particularly for dairy.

"Going forward, it is looking like production conditions are fairly good, supporting the strong foundation that we have seen for the season so far," she said.

"It's great conditions for farms but the double edged sword is the pressure that it puts on commodity prices," she said.

MetService meteorologist Georgina Griffiths said the first half of the year had been quite wet nationally. October and early November had been dry.

"But I'm pretty sure that in a week's time there will not be any more regions wanting more rain," she said.

South Island power generator Meridian - the country's biggest - said southern lake levels were healthy.

Lake Pūkaki is currently 62 per cent full and 127 per cent of average for this time of year, a spokesperson said.

"It has lifted over the last few weeks and continues to rise as we are using water from the Ōhau and Ahuriri catchments," she said.

The Waiau lakes are in the upper part of their main ranges – Te Anau is 84 per cent full and Manapōuri is 75 per cent full, she said.

Greg Sise, managing director of Dunedin-based Energy Link, said improved South Island lake levels had alleviated pressure on the power grid, which has been disrupted by temporary disruption of gas supply from the Pohukura field.

Even so, spot prices remained about 50 to 100 per cent higher than normal due to Pohukura and the planned maintenance shutdown of Genesis Energy's high-ouput gas turbine at Huntly.

In the North Island, Lake Taupo was running low for this time of year, he said.