It is the first time in its 40-year history that it has been cancelled.
"This decision was not made lightly," the statement said.
"We felt that running a large event with visitors from around New Zealand would bring too much risk to our community and that it would be difficult to comply with Government regulations under the traffic light system if there were a sudden change in circumstances.
"We wanted to make this decision early to allow our community, exhibitors, volunteer groups and local businesses, who are a huge part of our event, to be able to plan ahead for other opportunities," the statement said.
Event organiser-secretary Jude McNab said organisers were now working through the ramifications of the "unprecedented situation".
Cancelling the event had been the toughest decision the voluntary committee had had to make.
"The committee felt that the decision to cancel now is fairer on our exhibitors, volunteers, contractors, suppliers, supporters, visitors and our local community.
"This enables them to work towards new opportunities along with us being committed to do our part to help protect everyone," she said.
Gore Mayor Tracy Hicks said last year it was a massive event for the Gore district, not only in terms of the number of people it drew and the economic benefits and spin-offs from that but also just the buzz it generated in the community.
Organising committee chairman Warren Ross said the cancellation was disappointing and would have a "huge effect" on Gore and the wider community.
Sites were sold out and there was a waiting list, although there had already been several North Island exhibitors pull out because of Covid-19.
Accommodation had been booked as far away as Te Anau and Mosgiel.
Last year's event, held a week after severe flooding in Gore, attracted more than 750 exhibitors, and took place just weeks before the first Covid-19 Alert Level 4 lockdown.
The organising committee hopefully would regroup and regather in about six to eight months' time and look forward to the 2024 event, on February 14, 15 and 16, Ross said.