There are three species of lung worm that affect our NZ ruminants.
They live in the airways of the lungs. If in large numbers they are easily seen as white, long (several cm) and thin worms. They will have quite a lot of froth around them.
Lungworm causes irritation and inflammation which then induces coughing by the affected animal. If the infection is really bad they can have difficulty breathing and may have mucus coming from the nose.
You will not get an indication of the presence of lung worm from a regular FEC (faecal egg count), as they have a different life cycle. They are passed in the faeces as larvae and to identify them the lab uses a different technique to isolate the lungworm larvae.
Generally monthly preventative drenching with combination products will take care of lungworm in young stock.
If you notice your lambs coughing, it could be lungworm but it could also be caused by pleurisy or pneumonia. Prevention of these diseases are your best line of attack - prevent lambs inhaling dust by avoiding dusty areas in hot/dry weather (moving after morning dews is best), moving stock slowly and reducing dust in yards by hosing if possible.