The decline has been put down to dry conditions in the North Island, as well as the continued change in land use in the South Island towards dairy and activities to support the dairy industry.
Cattle numbers were more positive however – up 1.6% to 3.76m – seeing their first increase since the 2006-2007 season.
Andrew Burtt, chief economist at B+LNZ Economic Service, said strong mutton prices driven by rising demand from North Asia encouraged a high level of cull ewe processing for the second year in a row. Breeding ewe numbers were down 1.4% to 19.96m compared to the same period last year.
Burtt added the given the favourable climatic conditions and overall adequate feed supplies, the national average ewe lambing percentage is forecast to lift by around 1.5 percentage points, from 120.9 in 2013.
"With 20 million breeding ewes, each one percentage point change in lambing percentage equates to 200,000 lambs. However, spring lambing conditions will be a key factor determining the final lamb crop," he explained.
"Breeding cows were in good condition at mating. With favourable feed supplies over the winter, and assuming good feed supplies continue into spring, the calving percentage is expected to be similar to last year. The only exceptions are Northland and northern parts of the Waikato, where tight feed conditions in spring 2014 might impact on calf survival at calving."
In related news B+LNZ has just announced it is to join forces with the Federation of Maori Authorities (FoMA) in order increase the support given to Maori sheep and beef farmers.
Two new positions have been created – Anaru Smiler and William McMillan have been appointed Kaiarahi Ahuwhenua Sheep & Beef, operating jointly for FoMA and B+LNZ.
Dr Scott Champion, chief executive, B+LNZ, said: "Maori ownership of the pastoral sector is large, with nearly 20% of New Zealand land in Maori ownership – and a large proportion of this is running sheep and beef. We are looking to support Maori-owned sheep and beef farming businesses more effectively than we have done in the past."