Matthews said the damage could have been done by just two dogs, perhaps returning more than once.
He said some of the meat was eaten, but most of the lambs were left injured and uneaten.
Once bitten they are likely to die of shock, or infection.
"It's just been a game to [the dogs]," Matthews said.
Matthews said it was the fourth time in a year stock in that paddock had been attacked by dogs.
A week ago there was another attack, leaving six dead and eight to be treated for injuries.
This time a year ago 18 were killed in two incidents.
"That time the rangers picked the dogs up in the paddock, but they weren't attacking sheep then and they couldn't do anything about it," Matthews said.
On Monday when farm manager Taylor found the latest attack she called her brother Reece and they went to Whanganui Police - where they were told it was not a criminal matter.
Matthews then rang Whanganui District Council and two dog rangers went to the paddock that afternoon, but by the time they arrived the dogs suspected of the attacks were not there.
Matthews had planned to fatten and sell the 350 lambs and was still calculating the financial loss of the massacre.
He paid $100 for each lamb, $4.40 for each to be shorn and $900 to transport them.
Matthews said he expected to make $40 to $50 once each lamb was sold.
He said he would also have to spend time treating the injured and burying the dead on a day he had other work planned.
Matthews said he was insured but he is now looking at installing CCTV cameras and pointing them on the paddock.
It wouldn't stop dogs killing sheep, but might be helpful in other ways, he said.
On Tuesday council animal management staff were collecting and collating evidence from the scene, interviewing witnesses and investigating the circumstances in an effort to locate the dog or dogs responsible and their owner.
Under Section 57 of the Dog Control Act 1996, the owner or person in control of a dog that kills another animal may be convicted in a court, destruction of the dog may be ordered and the dog owner may be disqualified from owning a dog.
As in any investigation, council animal management officers need to be confident of the identity of the offending dog or dogs to enable a prosecution to take place.
Dog attacks of this magnitude and severity are extremely rare in Whanganui, a council spokesperson said.
It was disturbing and very distressing for those who came upon the scene, a council spokesperson said.
Animal management staff are keen to hear from anyone who has any information or has heard anything about sheep being attacked in the Pauri Road/State Highway 4 area over Waitangi weekend. Please call the Whanganui District Council on 06 349 0001.