KEY POINTS:
The rain snarling up traffic in the cities is dampening the dust on parched farms. But it's no drought-breaker. Forecasts suggest that kind of rain won't come until April.
With a farmer's understatement, Charlie Pedersen of Federated Farmers calls this season's exceptional climate conditions a "glitch".
"Every summer,
somewhere in New Zealand there's a drought, and somewhere there's a province that's having a marvellous summer. The unusual thing about this season is even those areas that aren't in drought are very dry."
Waikato, Wairarapa and North Canterbury are technically in drought - defined as 30 days or more of a farm not being able to meet its feed demands. The only green pastures are in Northland, Gisborne/Wairoa and the South Island's West Coast.
To stretch out supplementary grain feed, dairy farmers are drying off cows early - stopping milking them - because non-milking cows eat less. Already, daily milk production in Waikato is down 27 per cent on this time last year.
Giant dairy co-operative Fonterra has warned the drought could cost dairy farmers as much as $500 million in unspilled milk by the time the season ends in May.
Meanwhile, backlogs of beasts waiting for slaughter build at meat works as it becomes uneconomic to keep all stock alive.
There's nothing like a drought on top of soaring produce prices to highlight the gulf between townies and cockies.
When a struggling suburban mother reads about record dairy pay-outs, who can blame her for blanching at paying $16 for a kilogram of New Zealand cheddar?
When 1kg of Mainland Colby cheese costs the equivalent of $12.74 in Woolworths Australia, but $14.99 in a local Woolies, naturally townies are asking why.
And why shouldn't today's queues at the meatworks translate to cheaper lamb steaks in a month or two?
Because, sigh the economists, it doesn't work like that.
First and foremost, farming is an export industry, generating more than half of our export earnings.
Red-blooded Kiwis consume only 5 per cent of local milk products, 8 per cent of lamb and 20 per cent of beef. This means local prices are dictated by the world market.
Explains Rabobank rural banking general manager Ben Russell: "There's no logical case for New Zealand farmers, or food companies for that matter, to sell their products cheaper on the domestic market. That's how a free-market economy works. But New Zealanders do benefit from the extremely high quality and freshness of the food, which is the safest in the world. It's only fair that farmers and food processors are paid a reasonable return for that."
The big dry is but one misstep in the great, intricate dance of global supply and demand that determines the price we pay for food grown here.
The branch of giant dairy co-operative Fonterra, which produces Fonterra brands such as Mainland and Anchor/Fernleaf, pays the same price for its raw ingredients as overseas buyers. And a growing appetite for thick shakes and pizza in places such as China, India, Russia and Brazil is pushing up the demand and therefore international price for dairy at the rate of 3 per cent a year.
So, cautions Dairy New Zealand economist Matthew Newman: "Don't expect dairy prices in New Zealand to decline in the next couple of years."
Lowered local production and any drop in the dollar "could keep the price higher for longer".
Globally, supply of sheepmeat outpaced demand until recently, bloated by high kills from factors as disparate as Australia's long-standing drought and European Union policy.
Now the world price is picking up, but rising costs like transport and fertiliser, combined with the defiantly strong kiwi, are cancelling out any benefits to New Zealand farmers.
Meat and Wool New Zealand warns if the exchange rate stays around US75c, sheep and beef farmers' average profit will dip to $23,400 this year.
Drought-related costs are eating deeper into profits, and may be passed on to consumers.
Explains Russell, the extra stock being killed early because of the drought are not the plump young lambs and calves which end up on our plates. This supply spike will be absorbed by the export market rather than drive down local prices.
"If anything, we would expect to see those prices trending upwards because international prices remain quite strong as farmers' and processors' costs are going up."
Stressful times, but most farmers will come through, says Russell.
And dairy farmers' record payout of $6.90 per kilogram of milksolids will more than offset the predicted 8 per cent loss in milk supply from the drought, says Newman.
But, for now, the drought is gobbling up dairy farmers' discretionary spending, and starving meat farmers' profit margins.
Four months ago, car dealers were struggling to meet the demand for Toyota Hilux. Last week, a major Waikato dealer pulled the utes from his advertising - "we were wasting our money".
Farmers are telling them the new car will have to wait. "One guy spent $40,000, another $110,000 on feed, which is money they would have bought the ute with."
Quotable Value New Zealand says financial uncertainty in the dairy sector has exacerbated a slowing Waikato housing market.
There's a saying among farmers during a dry spell: "Every day is a day closer to rain".
But, even if the drought-breaking fall came tomorrow, it would be too late to reverse the chain reaction in motion. Russell says: "The regional economies are in for a reasonably tough 12 months."
Farming brothers refuse to panic over drought
Brothers Steven and Keith Stark aren't panicking as the cracks spread in their fields. They farm in a dry belt, so they're used to the conditions. But this dry is exceptional. Waikato is experiencing its driest January in more than a century, and the drought's predicted to stretch into April.
Steven and Seattle-born wife Theresa have 500 bulls, 1000 ewes and 1400 lambs on their 557ha farm near Huntly, Waikato. So far, they've spent $1600 on extra meal feed, and they're using up hay meant for winter.
Which means the woolshed renovation, and possibly the new ute, will have to wait.
They haven't been forced to sell stock yet, and it's standard practice for them to drip-feed stock to the meatworks over several months. Their buyer reports that meatworks' backlogs for lambs are now two weeks and three weeks for ewes.
Keith and wife Linda run 660 dairy cattle nearby on 210ha. Already, milk production for February is down 30 per cent on last year. They have enough farm-made grain feed for another two weeks. Should the drought continue into March as predicted, they face culling up to a third of their cows because they won't be able to justify the $30,000- a-month cost for extra feed.
Though the past few days have been wet, a little rain is almost worse than none, because it leads to rotten dead grass and flourishing fungal disease.
The brothers are phlegmatic. Keith: "It's just a bit of a pain that we get a high pay out and loss of production. If I stressed about it I probably wouldn't last very long."
Steven: "I'm not looking for a tree to hang myself on."
Theresa laughs. "Not yet. Come back in a month."
