New Zealand wool prices surged to a 14-year high amid renewed demand for the fibre in the Middle East and Europe.

Farmers' economic confidence improved in the first months of 2010, boosted by sheep and beef prices.

Cavalier says it is seeing a gradual improvement in sales after the global economic slowdown.

Sheep numbers have continued to fall, dairy cow numbers are rising and grain crops increased markedly, latest agricultural production figures show.

AgResearch says it has several international companies interested in commercially producing its stab and flame-resistant wool fabric.