Carl Terrey has spent most of his life breeding a rare Tasmanian carpet wool sheep, but he fears his beloved Elliottdale may be extinct within the next decade.

Key points: Elliottdales were developed in Tasmania in the 1970s

Elliottdales were developed in Tasmania in the 1970s Predominantly a wool breed, they are also useful for meat

Predominantly a wool breed, they are also useful for meat Market forces mean demand for carpet wool has declined, threatening the breed's viability

There are only 200 Elliottdale sheep left in the world and about half roam the hills at the 77-year-olds' Oldina property in Tasmania's north-west.

It was bred using genes from Romney breed in the 1970s at the nearby Elliott Research Station.

The Elliottdale can be used for meat but was predominantly created for carpet wool and is the only carpet wool sheep of its kind developed in Australia.

"They grow the wool very quickly and it's a coarse wool — in excess of 40 odd microns, " Mr Terrey said.

"They grow wool so quickly in fact that we should be shearing them three times a year, but we don't, we shear them twice a year because the cost is too great."

Three other speciality carpet wool breeds grown in Australia originated in New Zealand.

"As it turns out we found a better gene, because the breed that they had in New Zealand [the Drysdale] had horns, which shearers find fairly uncomfortable," Mr Terrey said.

"We were doing very well, but then with globalisation and a few other problems like the 2011 earthquake in New Zealand, the carpet wool industry fell to pieces."

Carl and Jann Terrey with dog Ali at their farm in Tasmania. ( ABC News: Manika Dadson )

Initially buyers paid $6 per kilogram for Elliottdale wool, but after the collapse, that price plunged to around $1.20 per kilogram.

Mr Terrey, who was a member of the Elliott research team, bought several sheep when the Elliottdale Project terminated in 1993 and he has continued to breed them at his farm ever since.

His Elliottdale wool is still blended with other wools today, and exported mainly to China for carpets and clothing.

Mr Terrey said due to his health and decreasing demand for wool, he doesn't think he'll be able to breed the sheep for much longer.

"We're still okay, but we really need a much bigger gene pool and we haven't got that, and I can't see me taking on the job to fix it," Mr Terrey said.

"The gene pool is getting too small, so we're getting a few problems [with inbreeding] like black stops in some sheep's fleeces that we're having trouble controlling.

"I've put a lot of time and effort into it and I'm very sad that it hasn't worked out, but it's an economic thing. All the manufacturing is now done in China."

Can the Elliottdale still be saved?

The short answer is yes, but it will take work and persistence.

"What we've actually done is we've had semen taken and it's been frozen so that if somebody needs carpet wool in the foreseeable future it can be resurrected quite quickly," Mr Terrey said.

"But otherwise, I think the sheep will be finished quite soon."

The Terreys recently sold two flocks of their sheep — one to Tasmanian farmer Jenny Eddington and the other to a Victorian couple with a hobby farm.

The Elliottdale wool is a course fibre bred for carpet production. ( ABC News: Manika Dadson )

Ms Eddington, from Selbourne, said her sheep recently had 20 lambs, and she discussed switching rams with the Victorian couple to grow the population.

The Terreys are trying to find buyers for the rest of their flock, who have the expertise to keep the breed going and can potentially develop new genes to ensure the sheep are not inbred in the future.

Mr Terrey's wife Jann said consumer behaviour may also need to change to save the Elliottdale.

"I think people have got to start using woollen products again, wool carpets ... and things like that, rather than just buying the cheap things that come out of China," she said.

"That's the biggest problem, people are always looking for the bottom dollar and not prepared to pay for the quality that's available."

She said the breed could be gone within the next decade if no-one takes over increasing the gene pool.

"I'm just sad for Carl because he's put so much of himself into it," Mrs Terrey said.

"Once they're lost, it's going to be very hard to redevelop them."