Breeding pairs of the endangered birds at many sites on the Otago coast and on Codfish Island have nearly halved this year after another late start to egg-laying. Mystery diseases and starvation resulted in illness and death for many penguins in the past two years.
Recent Department of Conservation searches found 232 active nests, including 76 at monitoring sites on Otago Peninsula, down from 111, and only 94 at sites in the Catlins, down from 165.
''It's disappointing, as we were hoping for a good start to the season, after several challenging ones,'' Doc ranger Mel Young said last week.
Modelling by University of Otago scientists last year showed under the best-case scenario the Otago Peninsula population is in slow decline but under the worst, it is in steep decline.
Ms Young said many birds delayed their moult earlier in the year and it was likely some birds did not survive or had not regained enough condition to breed.
An exception to the steep decline was North Otago, where 62 nests had been counted at monitoring sites compared with 70 last season.
At Yellow-eyed Penguin Trust reserves searched last month for nests only about half the number of nests seen the previous year were found on Okia and Otaphai reserves on Otago Peninsula.
''While the Long Point reserve in the Catlins was holding up until this season, nest numbers have plunged to 28 nests down from 48 in 2013-14.''
Doc figures also showed a decline in breeding pairs at Te Rere Scientific Reserve, in the South Catlins, from the 20 to 25 usually found to only seven last month.
Trust general manager Sue Murray said more concerning was the long-term trend on Codfish Island (Whenua Hou), west of Stewart Island. On the island the number of breeding pairs had virtually halved from 61 in 2001 to 32 this year.
''On Codfish, no juveniles were seen at all. This is a predator-free island, so no terrestrial threats. We believe the poor numbers must be linked directly to something in the marine environment.''
It highlighted the need for further research in the marine environment to see what changes were affecting the penguins, Mrs Murray said.
''Penguins are indicators of marine conditions, making yellow-eyed penguin a sentinel of change in New Zealand's southern waters.''
They were unsure of the reason for the drop in the Catlins but it might be an effect of the poor foraging last year, poor fledging success and the effect of late moulting on adults.
''Yellow-eyed penguin populations have historically been characterised by extreme population fluctuations and it is hoped the Otago coast birds will bounce back with recruitment and the return of non-breeding adults.''
The next stage of the breeding season was egg-hatching, which had already started at some sites.
Boulder Beach Conservation Area on Otago Peninsula will be closed to the public from December 1 to February 28 during the breeding season.