A huge fall in flock numbers may see New Zealand lamb imports cut down to size next year – spelling more profitable times for the British sheep sector.

The chairman of Meat and Wool New Zealand has admitted his sheep industry has experienced a sharp decline in livestock numbers in recent years and may face supply problems to its export markets in 2009.

While New Zealand has been concentrating on building up dairy herds, sheep numbers will have fallen by 42 per cent in the 20 years to 2010-2011, with a 45 per cent drop in breeding ewe numbers and a reduction in the lamb crop of nearly a third.

MWNZ chairman Mike Petersen told a conference in Wales last week: "We used to make jokes about sheep numbers in New Zealand. As you travelled through the country, they could be seen wherever you went. But since I have been here, I have seen many more in the UK than I do driving around New Zealand nowadays."

Current predictions are for export supplies to start running short in May – at a time when many British producers will be marketing new season's spring lamb.

New Zealand exports 91 per cent of its sheep meat products to more than 100 countries, a trade worth 13.5 billion NZ dollars. It accounts for six per cent of world sheep meat production, 55 per cent of world sheep meat trade and 75 per cent of world lamb meat trade.

About 44 per cent of its exports come to the EU with Britain the top destination for NZ lamb exports, receiving 26 per cent.

Meanwhile, all 11 Liberal Democrat MEPs have signed a declaration calling on the European Commission to make electronic identification for sheep voluntary and not mandatory.

The party's food and rural affairs spokesman Roger Williams said: "I hope that this will be seen as a sign of solidarity by the Liberal Democrats in support of the UK farming community.

"The policy of EID for sheep has not been thought through properly and could ruin the financial viability of the industry for many of those currently involved and I hope that the EU will look at this again."

However, at least 50 per cent of MEPs need to sign the declaration for it to progress and so far, out of a total of 785, only 64 have.