THOUSANDS of Upper Hunter residents have been forced to start buying water for drinking, bathing and washing, as dams, creeks, bores and tanks run dry.
Water carters are the busiest they have been since the last drought three years ago, which many believe was the worst in Upper Hunter history.
Bores in the village of Wingen, between Scone and Murrurundi, are dry for the first time in years.
Barry Daniel, who runs an antique store and has lived in the village for 21 years, estimated more than 80 per cent of his fellow residents would be relying on bought water.
Water carters are charging between $100 and $160 for residential loads.
The fear is that with soaring temperatures and little rain predicted for the summer, conditions can only get more grim.
Livestock Health and Pest Authority senior ranger Peter Fotheringham described conditions in the Upper Hunter as desperate and said water was "disappearing at a rate of knots".
Mr Fotheringham said the region had not had time to recover from the last drought and the outlook was "very bleak".
"People are shipping stock to agistment if they can find any," Mr Fotheringham said.
"Dams, rivers and creeks are all drying up and there is simply no water. It's being made worse all the time by hot days with really dry, hot winds."
Beef farmers have started weaning calves four months early due to the lack of water.
The Upper Hunter was officially declared back in drought on December 1, along with more than 80 per cent of NSW. Parts of the Lower Hunter are "marginal".
Scone-based ranger Ross Kemp said any remaining water levels were dropping between two and five centimetres on hot days.
Mr Kemp said lack of water was going to become a "massive problem" over the coming months.
"The way the weather is looking at the moment is a major worry," he said. "Things are getting worse each day and there doesn't appear to be any good news on the horizon."
Rob Scott manages Creswell Park, a beef cattle property at Murrurundi, and said he had no choice but to start weaning early this year to save his stock.
Mr Scott said the property had received only about half its average annual rainfall this year.
"We have had an excavator in, digging holes to try and get the cattle water. It's pretty tough at the moment," he said.
"We needed a wet winter to build up the underground supplies, but since 2000 there has been less and less rain and nothing has had a chance to replenish."
Department of Primary Industries Scone beef cattle officer Todd Andrews said there was no doubt land and producers had not recovered from the last drought.
"The El Nino is the dominating weather pattern and it is not predicted to weaken," Mr Andrews said.
"People have not had time to get back on their feet from the last major blow and things are just getting worse. A lot of people are very concerned due to the stark outlook."
Herald weather expert Don White said there was little hope of relief, with the Hunter expecting a very dry, hot summer.
Mr White said rainfall was predicted to be less than average, temperatures above average and evaporation levels increasing.
The Upper Hunter Shire Council implemented level one water restrictions in Scone and Murrurundi on Thursday.
Singleton and Muswellbrook do not have any restrictions, with water levels at Glenbawn Dam high, at about 74 per cent capacity.