The most were in the Waikato region (23%), followed by North Canterbury (13.8%), Southland (11.6%) and Taranaki (9.7%).
Otago had 439 herds comprising 256,497 cows, making up 5.3% of the national herd, while Southland had 989 herds comprising 563,017 cows.
Despite the decline in cow numbers, dairy companies processed very similar milk quantities - 20.7 billion litres of milk containing 1.85 billion kgMS in 2016-17. The previous season was 20.9 billion litres of milk (1.86 billion kgMS).
DairyNZ senior economist Matthew Newman said the trend for increasing per-cow milk production showed farmers were opting for animals that were year-on-year more efficient at converting grass into milk.
''We are producing similar milk quantities from fewer cows, partly because we are breeding better animals and feeding them well,'' he said.
The average herd was now 414 cows, down from 419 in 2015-16. It was the lowest level of cows
milked since 2012. North Island cow numbers declined 90,000 to 2.89 million, while South Island numbers fell 46,000 to 1.97 million.
LIC general manager New Zealand markets Malcolm Ellis said the statistics reflected a shift in the industry.
''Farmers are acknowledging that, as an industry, if they are not going to be milking more cows then they need to be milking better ones,'' he said.
Changes in dairy breeds continued. Holstein-Friesian/Jersey cross-breeds now comprised 48% of cows, up from 40% in 2010-11. Holstein-Friesians made up 33.5% of the national herd and Jerseys comprised 9.3%.
Farm ownership structures had changed over the past couple of seasons with 27.3% of New Zealand dairy herds operating under a sharemilking agreement in 2016-17, compared with 32.4% in 2014-15.
Owner-operator herds increased 188 to 8503 herds in 2016-17, reflecting variable order sharemilkers moving to contract milking after financial challenges with low milk prices.
