Murder accused Ewen Macdonald jumped on a bike and "shot up" to the farm when he heard his brother-in-law Scott Guy was dead.
Macdonald, 32, is accused of shooting dead Mr Guy, 31, in his driveway in July 2010 because of tensions over the future of the family dairy farm.
The high-profile trial is in its second week in the High Court at Wellington, and on Thursday Senior Constable Terry Moore read the transcript of an interview Macdonald gave to police the day after Mr Guy was killed.
In the interview, Macdonald said a neighbour, Bruce Johnstone, called him with the news that Mr Guy was dead.
"I could tell from Bruce's voice that something was majorly wrong."
Macdonald told police he jumped on a bike and "shot up there", the New Zealand Herald reports.
"I could see Scotty lying in the driveway in front of his ute," Macdonald told police.
He also said he thought he might have been the killer's intended target.
Earlier on Thursday, the court heard police ruled out Mr Guy being killed over drugs or during a botched robbery of labrador puppies.
Detective Sergeant David Thompson said police had received information Mr Guy may have been murdered because he found cannabis growing on the farm, 3News reports.
However, police only found two small seedlings in a farm cottage and some plants on a riverbank near the farm boundary.
Those responsible were ruled out as murder suspects, he said.
Det Sgt Thompson said police also discounted the theory Mr Guy was shot during an attempt to steal chocolate labrador puppies, which were being kept in a shed on the farm.
Three went missing in the period Mr Guy was murdered.
Det Sgt Thompson also revealed that there were 60 people on a "persons of interest" list.
The trial, which is expected to take six weeks, is continuing.