DESPITE the recent softer pricing in the sheep market, analysts predict the longer term picture remains robust.
"It is unseasonal to see price declines in winter," Thomas Elder Markets' commodity market insights manager Matt Dalgleish said.
"New Zealand continue to favour beef and dairy over sheep and, as our main international competitor, it means more market opportunity and access for Australia.
"The prospect of United Kingdom trade increasing and the opening of India bodes well for global demand for sheepmeat."
Last year Beef and Lamb NZ expected the lamb crop to grow during the 2021-22 season, despite the ongoing decline in breeding ewe numbers.
"However, the BLNZ mid-season update for the 2021-22 season, released in March 2022, shows that the forecast Kiwi lamb crop has been revised down," Mr Dalgleish said.
Instead of a 0.9 per cent gain to 22.8 million head of lamb, BLNZ is forecasting a 2.2pc decline to its lamb crop of 22.6m head.
This will be the fourth consecutive season of lower lamb numbers for NZ.
Meanwhile, NZ breeding ewe numbers have been in a steady decline since 2006.
The total sheep flock in New Zealand is forecast to have declined by 0.2pc during the 2021-22 season.
BLNZ noted the beef and dairy herd continued to experience growth (3.7pc and 1.3pc, respectively) and some traditional sheep regions in NZ have added competition for acreage from the forestry sector.
"The United States market continues to grow too and many opportunities there to expand our footprint remain," Mr Dalgliesh said.
"So long as foot and mouth disease stays out we're in good shape for continued strong pricing into next year I think."
According to the Department of Agriculture, Fisheries and Forestry, greater fleece weights and a larger flock have pushed up estimated shorn wool production by 8pc to 317,000 tonnes in 2021-22.
A higher sheep shorn ratio is forecast to further increase shorn wool production by 5pc to 333,000t in 2022-23.
The sheep shorn ratio is expected to increase with the increase of international mobility, especially between Australia and NZ, increasing Australia's shearing labour supply and reducing shearing intervals.
Sign up for our newsletter to stay up to date.