Farmers say they are "deeply disappointed" no space in managed isolation and quarantine (MIQ) facilities will be given to skilled dairy workers.
On Monday the Government announced it would be allocating around 500 MIQ spaces per fortnight over the next 10 months to skilled workers in a number of industries.
The move means around 300 recognised seasonal employer (RSE) workers will be allowed into the country from June, with a total of 2400 arriving by March next year.
Forty more shearers and 125 rural mobile plant machinery operators will also be allowed in, subject to sector workforce plans, a model to upskill New Zealanders and agreed wage rates.
Federated Farmers said while it was pleased to see spaces made available for shearers and agricultural contractors it was "disheartening" to have a request to bring in 500 "desperately needed skilled dairy employees" turned down.
"Farmers have been telling us for well over a year there is a real shortage of suitable dairy staff," said Federated Farmers employment and immigration spokesperson Chris Lewis.
"I am getting daily calls about the labour situation and many farmers don’t know what to do for the coming season.
"I'm a farmer, not a social worker and I don’t know what to tell these people. As every dairy farmer knows the cows will always get milked, the question is, at what cost?"
The lack of workers means pressure is growing on farmers and small rural communities, which is taking a toll on stress levels, wellbeing and mental health, he said.
"We tried to highlight the extent of the problem to Government in our border exception application.
"Now to have the application turned down in its entirety is really disheartening for our farmers. We hoped that MPI [the Ministry for Primary Industries] and Immigration would have seen the impact that a shortage of people has had during harvest for our horticulture colleagues and try and avoid the same problems through the peak dairy calving period," Lewis said.
DairyNZ said the dairy industry feels "let down" by the decision.
"We have real concerns for this season, including animal welfare, farmers working longer hours, increased stress and mental wellbeing issues," said Dr Tim Mackle, the organisation's chief executive.
"DairyNZ continues to work hard to resolve long-term workforce issues. However, we have an immediate workforce crisis this season, due to COVID border closures. This decision is a blow to the sector."
He said a number of skilled dairy workers already in the country were currently waiting for their resident applications to be processed and urged the Government to fast-track the process for them.
"Our migrant staff are extremely valued by the sector. We are concerned that the delays are forcing them to look to other countries who can offer a more certain future."
The move to let in more RSE workers was welcomed by the horticulture industry, however the sector said the cost to employers, who have to foot the bill for workers' quarantine, was "too high".
