Whatever you've heard about this subject, the Welsh and the Kiwis do not, on the whole, shag sheep. The Cow and Everything2 do not take any responsibility for you going up to a big beer swilling Welshman named Geraint and accusing him of buggering sheep, nor the costs of your hospital treatment and/or funeral expenses.
The Welsh and the Kiwis (New Zealanders) have a unjust reputation for indulging in a spot of bestiality. Why, some ask, would these two nations be accused of this vile act if it wasn't true? Maybe it's something to do with pent-up emotions that are only partially aired in rugby.
This simply isn't true, I'm afraid. The Welsh and the Kiwi's just have a lot of sheep (and not just for sexual purposes either). The problem is that it rains a lot in both Wales and New Zealand, which means that most profitable crops, like corn and wheat don't grow well, and it's hilly, making driving combine harvesters difficult. The soil isn't too fertile either... but sheep don't seem to mind this too much.
The Welsh typically aren't too impressed by jokes such as:
What's the definition of a Welsh leisure centre?
Four sheep chained to a lamp-post
or suggestions that you put the sheep's hind legs in your wellies to stop it getting away.
However, it does happen - see goatlove.com for the story of one Oxfordshire lad who was caught in the act.
It now turns out that goatlove.com is becoming a commercial site: fortunately, I copied the image and uploaded it to http://www.geocities.com/thecow96596/sheep.html .