Alan Sloane said he was within his rights to shoot the hounds on his land near Rathfriland.
He said one of them was closing in on a group of 15 pregnant sheep in the corner of a field when he shot it.
The other two were in an adjacent field with pregnant mares and Mr Sloane's Â£1,200 ram when they were shot.
They were among a pack of 10 hounds which Mr Sloane said came onto his land.
The hunt was chasing a stag in the area when the incident happened.
Mr Sloane said he had exchanged words with members of the hunt who were angry that he had killed the hounds.
Two ewes which were involved subsequently aborted four lambs.
Mr Sloane said he fears he may suffer further financial loss as more of the ewes give birth.
He believes the cost could run to a four-figure sum and he is planning legal action.
He said he had not given permission for the hunt to be on his land.
He called the police and a council dog warden.
The warden was able to identify the dogs which were chipped.
The Countryside Alliance said it was investigating the incident.
A spokesman said he could not comment on it until he had received the report.
He said the alliance had signed a memorandum of understanding with the Ulster Farmers' Union four years ago about access to farm land.
The spokesman said this was the first incident since that agreement.
A County Down farmer has described how he shot dead three dogs belonging to a hunt when they threatened his pregnant ewes.