The drought gripping many parts of New Zealand is expected to cost the country's farmers 1.24 billion dollars (one billion US) in the year to June, the government said Wednesday.
Little rain has fallen through many parts of the country during the southern hemisphere summer, cutting output in the key export industries of dairy, beef and sheep farming, Agriculture Minister Jim Anderton said. "There can be no question that the impacts of this drought on farming families, rural communities and the rest of New Zealand are severe and will be felt for several years to come," Anderton said.
A boom in world dairy prices is cushioning the impact on dairy farmers, despite production being cut by 894 million dollars in the current financial year to June, according to Ministry of Agriculture figures. Sheep and beef farmers are expected to lose 345 million dollars and the drought could not have come at a worse time for them because they had been receiving relatively poor returns, Anderton said. "Sheep and beef farmers are in a very weak financial position, following two years of poor profitability," he said.
The cost of the drought on the overall economy in the current financial year has not yet been calculated but the effects are expected to linger into the new year. Many areas of the country, except for the far north and central east coast of the South Island, have received lower than average rainfall and high temperatures through the summer, the National Climate Centre said. The drought also means hydro-electric lakes are well down on normal levels, which makes up about 65 percent of the country's total power generation.