It has been mooted as a potential hurdle for weeks and actions at saleyards suggest some key processors have wound back production of lamb and sheep kills, because of issues with profitability or are conducting winter maintenance.
Information implies JBS Swift and Thomas Foods International, for example, have kept production at lower levels with processors looking closely at supplies at saleyards, and cost of production despite the lower Australian dollar.
This was evident at the prime lamb and sheep sale last Thursday at Wagga Wagga, NSW, with bidding for heavy lambs patchy.
Lambs weighing above 30 kilograms carcase weight attracted the strongest bidding, while lambs less than 30kg found competition faded and prices dipped up to $39 a head.
The one bright spot last week was domestic lambs, with a major processor lamenting there was not enough new season lambs in the system yet which helped stabilise well-shaped, shorn, old lamb values, while longer wool types were severely discounted.
Niche new season lambs at Wagga suiting supermarkets fell $18 regularly selling for 890 cents a kilogram cwt, while shorter skinned old lambs were not far behind averaging 870c/kg cwt.
Once again price variations are starting to sneak into markets with NSW posting cheaper trends and Victoria unchanged to dearer at opening markets on Monday.
At Bendigo on Monday, numbers were down with fewer than 7000 lambs on offer, along with 2000 sheep.
Quality new season lambs were rewarded with price gains of $9.
New season lambs, weighing 20-24kg, made from $200-$224.
The National Livestock Reporting Service said buyers were working on skin values of $4-$5 ahead for these lambs which gave them a carcase weight price of 880-900c/kg.
In the old lamb section, trade rates jumped $7-$13 to average 918c/kg.
Quality was reportedly very mixed with the best presented old lambs paid premium rates due to lack of numbers.
Heavy old lambs were unchanged, making between $234-$259 to average 859c/kg cwt.
The big drop in numbers did not put the fire back into NSW markets where the trend continued cheaper at Corowa and Dubbo.
Lamb supplies at Corowa fell again and agents could only muster 6502 lambs and 1987 sheep.
Despite limited supplies, the best supermarket lambs dipped $13-$17 to average 734-863c/kg cwt.
Heavy lambs softened $5, averaging 870c/kg.
At Ballarat, lamb numbers dwindled to just over 10,336 and 4012 sheep.
In the trade lambs, prices were generally $20-$30 cheaper, while in the heavy lambs, rates fell $14-$32 to average 890c/kg cwt.