Northland Regional Council says sheep rustlers may be dumping animal remains into the region's waterways.
The council has received two separate reports of sheep skins and heads in a stream near Quarry Rd in Kaikohe.
It says locals believe rustlers may be stealing sheep for food, butchering them in secret and disposing of the evidence in waterways.
The council says it has spent hundreds of dollars clearing the stream and warns it may prosecute those responsible.
Kaikohe police say they have not received any reports of stock thefts but have asked farmers to contact them if they suspect they have been robbed.