Regional and national supply models of the U.S. sheep industry are developed using economic and subjective factors determined from surveys of current producers. Breeding inventories are determined to be positively related to total returns per ewe and crop acreage harvested and negatively related to calf price and hay price. Breeding inventories are projected to decline through 1993 based on current information.

The sheep industry is found to be more prone to contraction than to expansion and elasticities indicate a relatively inelastic response by producer in the short-run. Subjective factors are found to be important determinants of flock size. The supply function of U.S. sheep inventories is hypothesized to operate under asset fixity in reverse. Implications for further research are discussed.