The decrease in cow numbers was small at 0.36 per cent, but continued a trend of "more milk from fewer cows" as the industry focused on milking better cows and farming more sustainably, DairyNZ chief executive Dr Tim Mackle said.
Farmers were intent on developing more productive and efficient cows and farming systems with a lighter environmental footprint, he said.
Favourable weather conditions made grass grow well, and robust milk prices meant many farmers extended their 2020-2021 milking season.
The sector employs 50,000 Kiwis and was estimated to contribute $37b to the economy in 2020-2021, DairyNZ said.
Other key statistics from the new report:
• Average milk production per cow was 397kg milksolids, a 3.1 per cent increase from 385kg last season and the highest on record.
• A total of 3.735 million cows were herd tested (76.2 per cent of cows) – the highest on record.
• 3.497 million cows were mated to AB. The percentage of cows mated to AB was 71.3 per cent, which was higher than the previous season (70.8 per cent).
• 49.6 per cent of cows are Holstein-Friesian/Jersey crossbreed, a 0.5 per cent increase; 32.5 per cent are Holstein-Friesian; 8.2 per cent are Jersey; 0.4 per cent are Ayrshire; 9.3 per cent are other breeds.
• The average dairy cooperative payout of $7.75kg/milksolids was higher than the previous season ($7.20) and the second-highest average payout in the past 10 seasons.