The article establishes a positive trend in the dynamics sheep and goat population in peasant (farmer) households from 1990 to 2022, in contrast to agricultural organizations and household farms, which led to structural shifts in farm categories. In 2000, the share of sheep and goats in peasant (farmer) households accounted for only 6% of the total livestock in all categories of farms, but by 2022, it reached 40%, with the total number of sheep and goats in the Russian Federation increasing from 15 to 21 million during this period. The article presents a methodology for analyzing the state and development of sheep and goat farming in the Russian Federation, focusing on peasant (farmer) households. To analyze the dynamics of the sheep and goat population in peasant (farmer) households, sub-periods were identified and piecewise-linear functions were used to align the data. The highest slope (average annual absolute growth) was observed from 2000 to 2008, with an increase of 753 thousand head per year. From 2009 to 2016, it decreased to 468 thousand head per year, and the last period (2017–2022) is characterized by a declining trend, with an average annual decrease of 156 thousand head. The proposed approach to factor-based analytical grouping based on sheep and goat population data from Form № 1-KFH, provided by peasant (farmer) households and individual entrepreneurs receiving subsidies from the federal budget or regional budgets of the Russian Federation. The methodology was tested on a sample of almost three thousand households specializing in sheep and goat production. In contrast to publications on the data of All-Russian agricultural censuses and micro-censuses, the characterization of the identified groups is given by a system of performance indicators, as it is done in countries with developed economies in general and agriculture in particular. Based on the grouping, a positive correlation between the animal population and the overall production size and its efficiency was established, which can be used for developing targeted state support measures. The developed methodology can be used to analyze and forecast the development of the sheep and goat farming industry, taking into account the characteristics of small businesses in agriculture.