The New Zealand government declared a drought in key farming areas of the North Island on Wednesday.

The affected areas include the major dairy producing region Waikato, and the horticultural regions of Hawkes Bay and the Bay of Plenty.

The dry weather stretched through the summer months. Crops that were planted in the spring, which are needed to feed cattle late in the summer, have withered away. This has forced farmers to buy expensive supplementary food. To avoid this cost, farmers have been forced to reduce their milk production, and some have even had to cull animals.

The last significant drought in New Zealand occurred in 2007- 2008, and was one of the reasons that the economy dipped into a year-long recession. Agriculture accounts for around a half of the country's USD 38 billion annual export earnings, and the current drought is threatening to cost the economy USD 830 million.

An area of high pressure has dominated the weather for much of the summer, which has brought fine settled weather to the region. Some locations have received only around a third of their average rainfall this year.

The official declaration of drought gives farmers access to financial and social support, but the impact could be long lasting. Often agricultural production does not recover to pre-drought levels for at least 24 months.

The drought isn’t showing any sign of ending any time soon, and high pressure will continue to keep the North Island fine and settled over the next week or so.

Fortunately the South Island, which also has significant dairy and meat raising regions, is not affected by the current drought, and more rain is expected here in the coming days.