The designation as a primary natural disaster area, made by U.S. Secretary of Agriculture Tom Vilsack on Wednesday, allows an extended deadline for farmers and ranchers to apply for emergency federal loans.
"It basically will give farmers and ranchers more time to apply for emergency loan assistance," said Andrew Stoddard, spokesman for Rep. Ben Ray Luján, D-Nambé.
All counties in northwest New Mexico are eligible for Farm Service Agency aid.
Farmington received 5.06 inches of precipitation in 2012, as measured at Four Corners Regional Airport. About 11 inches is normal, according to the National Weather Service.
"Last year was the hottest year ever in the United States, leaving farmers and ranchers across New Mexico struggling in the face of devastating drought conditions," Luján said in a prepared statement.
"We have also been impacted by a lack of rain and snowfall during the monsoon and winter months," he said. "The disaster declarations by the secretary of agriculture will make important resources available to help farmers make ends meet during this difficult time."
Vilsack first designated San Juan County as being in drought in August. This week's announcement extends the deadline for loan applications up to eight months from Wednesday.
Luján said Congress should make it easier for farmers and ranchers to make it through drought.
"It is also vital that Congress work toward a new farm bill, which reforms drought and crop insurance and helps farmers and ranchers better endure severe drought conditions," he said.
The drought has left New Mexico and much of the West in a severe hay shortage. Prices for alfalfa hay have soared to $220-$285 per ton, and $8-$9 per bale, according to a November report from the U.S. Department of Agriculture.
There have been reports across the West of hay thefts.
Ranchers have been culling their herds as a result of the drought. New Mexico ranchers have culled 60,000 mother cows, said Dalene Hodnett, spokeswoman for the New Mexico Farm and Livestock Bureau.
"That's a significant loss, not just of cattle in the state, but their genetics," she said.
Cotton farmers are reacting to the drought by concentrating their water on fewer acres. They're also having to pump more water, which adds costs.
"All of those cumulative effects just continue on," Hodnett said.