 In South America , especially in Patagonia , there is an active modern sheep industry . Sheep keeping was largely introduced through immigration to the continent by Spanish and British peoples , for whom sheep were a major industry during the period . South America has a large number of sheep , but the highest @-@ producing nation ( Brazil ) kept only just over 15 million head in 2004 , far fewer than most centers of sheep husbandry . The primary challenges to the sheep industry in South America are the phenomenal drop in wool prices in the late 20th century and the loss of habitat through logging and overgrazing . The most influential region internationally is that of Patagonia , which has been the first to rebound from the fall in wool prices . With few predators and almost no grazing competition ( the only large native grazing mammal is the guanaco ) , the region is prime land for sheep raising . The most exceptional area of production is surrounding the La Plata river in the Pampas region . Sheep production in Patagonia peaked in 1952 at more than 21 million head , but has steadily fallen to fewer than ten today . Most operations focus on wool production for export from Merino and Corriedale sheep ; the economic sustainability of wool flocks has fallen with the drop in prices , while the cattle industry continues to grow . 
