The smallest lamb crop since 1953 has been recorded this year, with an estimated 23.9 million lambs tailed this year, according to Beef + Lamb New Zealand.
Beef + Lamb chief economist Andrew Burtt said breeding ewe numbers were down 4.5 percent on last year, due to the carryover effects of drought in previous years.
Lambing percentages across most of the country were also down because of tight feed supplies leading into winter.
Mr Burtt said fewer hoggets were also mated.
"But also there's been a slight swing towards increasing beef cattle, at the expense of sheep. On the positive side of the ledger, better-than-average climatic conditions during lambing this spring meant lamb survival was good, the exception being isolated weather events in the North Island. Over the country, there was a 6.7 percent drop - or 1.7 million fewer lambs than last year."
Mr Burtt said the average carcass weight was expected to increase slightly - by 0.9 percent - to 18.3kg, as a result of lower stocking rates per hectare.
"However, this is not sufficient to offset the reduced number of lambs available and we expect total export lamb production to drop by 7.2 percent. Lamb export receipts for 2015/16 are estimated at $2.8 billion, down 4.2 percent on 2014/15."