New Zealand sheep flocks are still shrinking in spite of the price of wool reaching heights unheard of for twenty years. And they are likely to stay that way says Federated Farmers Meat and Fibre chairman Bruce Wills.

“There are a couple of reasons, firstly with the current firm and favourable prices a number of farmers are taking the opportunity to clear out some ewes that they may not be entirely happy with.

“Also there's still a real over hang from those bad years. Many farmers have got a lot of debt and are under a lot of pressure from bankers, so it is a good opportunity to free up some cash flow.”

Bruce Wills says farmers are still downsizing and are unlikely to invest in larger ewe flocks when the average lamb is selling for $100 plus.

“My long term hope is that when we see this decade's long decline in ewe numbers finally halt and then hopefully start to climb, at that stage we will know that there is some profitability back with sheep and cattle farming.

“These things always take a delay to turn around and i would expect if we can sustain the current prices where they are for a good number of years, then it will lead to an increase in ewe numbers.”

Bruce Wills says farmers are concentrating on reducing debt and are unlikely to increase stock flock sizes until wool prices stabilise at their current level.

“For this industry to be profitable and successful we need these prices to continue for a good long while. “Sadly we've been through this long term pattern of boom and bust before, so there is nervousness that these prices may not last. I guess that's the job of industry leaders and others, to try and bring some long term sustainability to these current prices.”