The Yellow-Eyed Penguin Trust says 2013 was bad and has shown its protection work will have to move from land to the sea.
The number of chicks born this breeding season is well down after at least 68 adult yellow-eyed penguins on Otago Peninsula died in February from a mystery illness thought to be from a marine toxin.
Already, about half of those chicks have died this summer of starvation because of foraging problems for their parents.
The trust's field manager, David McFarlane, says it was probably the worst year since 1991 and new approaches are needed.
Mr McFarlane says conservationists can handle most of the bird's land-based threats, but toxins in the water and fishing industry issues are much harder to deal with.