The production conditions of sheep and goat farming in Hungary have basically changed in the last 6-8 years. There were changes not only in the property structure but also within the production system. The number of small ruminant farmers has significantly increased while the animal stock of Hungary has been broken down into small flocks. This new situation has influenced the use, the breeding, the keeping and the feeding of animals. For this reason and due to the market, the costs and yields have also changed and this might lead to a change in the production systems. In this paper we analyse the main characteristics of production systems and their effects on sheep and goat farming at present in Hungary.