One of New Zealand's leading sheep breeders, Derek Daniell, has just returned from the Rabobank Southern Australia Sheep and Wool Tour. He spoke to The Country's Jamie Mackay about his experience.

Daniell says New South Wales is a "disaster area," due to drought, but farmers in Southern Australia are used to these kinds of conditions.

Read more: Derek Daniell: NZ agriculture makes a convenient scapegoat

Daniell recounts his first time selling rams where a farmer near Bendigo had sold all 5000 of his ewes to combat a drought.

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"I was gobsmacked," says Daniell, who asked the farmer how he would bounce back from the sale, "'I've done it before, I'll just go and buy border merinos and start again ... otherwise I'd have to feed them for 11 months,"' was the reply.

"That's the way you've got to play the game over there," says Daniell.

Listen below:

Farming in Australia's dry regions isn't for the faint-hearted but wool still does well and Danielle says the fine wool growers he visited are, "really full of enthusiasm."

Also in today's interview: Derek Daniell talks about the global scarcity of water and the possible implications for New Zealand.