Wool-producing farms can be roughly (and conveniently) divided into three groups: (i) High hill country (ii) Hill country (iii) Lowland.

1. High hill-country farms are mainly in the South Island. They are well up in the mountains, have low fertility, and therefore tend to be large. Nearly all run fine-wool sheep. Merinos are the only sheep which can stand up to the rigorous conditions in the higher parts. Lambing percentages are low, mortality can be very high in bad snowstorms, and almost the only source of income is wool. These farmers therefore pay much attention to the selection of their rams, as they have almost no scope for culling their flocks, and they take good care that their wool is well prepared for market. This is a highly specialised type of farming not closely related to the next two groups.

2. Hill-country farms are important because of their large total area and the surplus stock they supply to the lowland farms. Although conditions vary widely, farms of this sort would carry, on the average, between one and two sheep an acre. General fertility on these farms had for a long time been steadily declining until aerial topdressing halted or reversed the trend. Romneys and a small proportion of Romney-Cheviot cross are generally carried in the North Island, and mainly Corriedales, half-breds, and a few Merinos in the South. Rams are usually the only stock bought in. The products are wool (still the main income), some store lambs, a few fat wethers and store cattle, and an annual draft of cast-for-age ewes.

3. Lowland farms, also referred to as fattening farms, are a ready market for these old ewes which are mated with suitable rams for another season or two to produce fat lambs. Such farms are highly fertile and of high carrying capacity. The farmers usually buy in almost all their stock. They sell to the freezing works fat lambs (mostly milk fed off their mothers), fat ewes, and possibly some cattle. Wool used to be regarded as a by-product and received scant attention; but at present, with the price of lambs down by comparison, wool plays a bigger part in the returns.