Welsh rural affairs secretary Lesley Griffiths has raised the issue of 'cheaper imports' which could enter the market in post-Brexit trade deals in a Cardiff meeting with UK environment minister Andrea Leadsom.
Ms Griffiths said Welsh lamb exports to the EU were worth £122m a year - 93% of its business overseas.
Until now, 40% of all the Welsh lamb produced has been exported to customers within the EU.
She raised concerns that the industry here could lose out in talks and be 'flooded with much cheaper imports from New Zealand' in a future free trade deal.
"It's up to the UK government to fight in those negotiations for all four countries," she told BBC Wales.
"I'm visiting other countries to get trade agreements and the first minister is over in America next month and we want them to start taking our lamb again, but that has been seven years in progressing that," she said.
During the meeting in Cardiff, Mrs Leadsom said she was 'very aware' of the concerns of farmers and the UK government would seek the best possible deal, working closely with the Welsh Government.
No capacity
But last year, Welsh Conservative leader Andrew RT Davies said Wales does not have the capacity to form its agriculture policy after the UK leaves the EU.
"There is a real issue around capacity in Welsh Government to reach for the challenge ahead and actually look at the opportunities that are opening up before us," he said.
"At the moment I don't think that capacity exists and I don't think there was any pre-planning for the outcome of the referendum.
"We've heard on the show field today the lacklustre response to Bovine TB. As we can all look at the headlines about Brexit, there are the day to day challenges that the rural economy and agriculture faces.
"I see no impetus coming from government at the moment to address those day to day issues, leave alone the big headline issue of Brexit.
"I think it's deeply concerning that we had a priorities for government statement five days before the Royal Welsh and not one mention of agriculture or the rural economy."
'Catastrophic effect'
The NSA said the UK needed to be keen to see an outcome to Brexit whereby tighter controls on New Zealand lamb were put in place.
They said a situation allowing new Australian products to be imported into UK retailers would make matters worse.
"Recent figures from Meat and Livestock Australia show the country produced 516,366 tonnes of lamb and 196,040 tonnes of mutton in 2015/16, exporting 56% of total lamb production (worth $1.78 billion) and 91% of mutton production ($700 million). The main destinations were the Middle East, USA and China.
"The UK is currently an importer and exporter of lamb, which helps balance supply and demand through the year and exploits ideal sheep producing conditions in the UK.
"We currently export around 36% of UK lamb, with France and the rest of the EU taking the majority of this. A priority for our sector is negotiating a trade deal with the EU post-Brexit.
"A free trade deal with Australia or New Zealand may be beneficial for some UK industries but could have a catastrophic effect on UK sheep farmers and we cannot sit back and be sacrificed for the benefit of others."
