Lamb yardings at major saleyards have tumbled after the big sell-off and sharp price falls of recent weeks.
The pace of post-coronavirus recovery in China, the biggest consumer of Australian lamb and mutton, will be the biggest factor in the sheepmeat industry's short-term future.
RaboResearch's head of Food and Agribusiness in Asia, Ping Chew, said China's entire food and agriculture supply chain would need at least four months to return to full operations.
Rabobank believed the virus outbreak in China can be contained within the second quarter of 2020, he said.
Managing director of Mecardo, Robert Hermann, said the recent panic to sell lambs overs fears about coronavirus would worsen an expected supply squeeze this winter.
"Processors will need to have deep pockets," he said
Speaking this week on an online Lambs Alive Bootcamp, Mr Hermann said nobody could confidently predict what long-term impact Covid-19 would have on Australia's major sheepmeat export markets.
He said the world was heading into an economic recession but nobody knew how deep it would be.
Australia had a diverse range of export markets, underlying demand was strong and plenty of people overseas wanted to eat Australian lamb and mutton, he said.
Saleyard numbers dried up at start of this week on the back of more good rains which are aiding flock rebuilding.
Eastern states lamb slaughterings came off the boil last week, dropping 9 per cent to 308,200.
The biggest slide was in Victoria with a 15pc dive to 163,364. NSW processed 97,052 lambs, down 4pc.
South Australia's lamb slaughter bucked the trend, rising 1pc to 42,511.
It was much the same story for mutton with a 12pc drop in Victoria to 31,101, a 1pc fall in NSW to 34,206 and a 23pc decline in SA to 6417.
Tuesday's lamb yarding at Ballarat dived by 11,185 to 17,600.
Few store buyers were present and some processors were absent but the market was generally firm.
Light trade lambs were firm for the better finished lambs while medium and heavy trade lambs were firm to $5 softer in places.
Heavy export lambs were firm to $5 dearer, topping at $295.
Sheep numbers dropped to 8700 with light sheep firm, medium sheep firm to $5 dearer and heavy sheep $5 to $10 dearer with wethers topping at $274.
Bendigo's lamb yarding dropped in half on Monday to 13,500 with Meat and Livestock Australia reporting a generally firm market.
Top trade weight lambs in short skins were $10 to $15 a head dearer.
The sale was conducted under tight Covid-19 restrictions with paint dots on walkways to ensure buyers adhered to social distancing rules.
Heavy export lambs dressing an estimated 34 kilograms sold to a top of $280.
Sale data showed most sales to major export processors were from $220 to $265. The average quote for heavy lambs was 770c to 790c a kg.
Competition from the major domestic processors was solid with plenty of sales of good trade weight lambs, around 22-26kg carcase weight, from $185 to $210.
A yarding of 8000 mutton sheep included some high-quality heavy Merino wethers which topped at $280 for an estimated 40kg carcase.
Mutton prices started around 660c and rose to more than 700c for the main runs of good processing sheep.
Numbers tumbled by 7500 head at the South Australian Livestock Exchange, Dublin, on Tuesday to 4000.
Heavy trade weights in the 2500-head lamb yarding made from $190 to $230 or an estimated 750 to 820c a kg carcase weight.
Mutton prices were generally cheaper in a yarding of 1500 with heavy ewes selling to $200 while woolly Merino wethers made to $210.
Dubbo's lamb yarding on Monday rose by 820 to 6050 despite 20mm of rain overnight.
Lightweight lambs to the processors were firm with the 12kg to 18kg 2 scores selling from $131 to $168.
Trade lambs were $3 to $5 cheaper with the 18kg to 23kg 3 scores selling from $160 to $200.
Heavy lambs were firm to $4 dearer, with the over 24kg 4 scores selling from $204 to $240.
Restocker lambs were dearer selling from $109 to $188.