Federated Farmers say the flow on effects of increasing live sheep exports to 250,000 a year would have to be carefully considered before it was given the go ahead.
A livestock dealer who organised the sale of 45,000 sheep to Mexico for breeding, said the Mexican Government would like it to increase to 250,000 sheep a year.
Federated Farmers meat and fibre chair Rick Powdrell said the 45,000 sheep were sold by farmers struggling due to drought, and were likely to have been killed anyway.
He said sending a quarter of a million sheep a year would be a completely different situation.
"That's possibly 200,000 animals that wouldn't be going through our processing system," said Mr Powdrell.
"We need to weigh up all the consequences of what that trade might mean. Our meat processors are under a bit of pressure already with through-put and the number of available animals."
Mr Powdrell said the Government would need to consider the ramifications for the whole sheep industry.
The animal advocacy group, Save Animals from Exploitation, said a suggestion that exports could be increased to up to 250,000 live sheep was appalling.
SAFE executive director Hans Kriek said they were shocked the Government allowed the 45,000 sheep to be exported.
He said he could not understand how it could be considered a success, when 444 sheep died either on board or before the sheep set sail.
Mr Kriek said that did not include the animals that would have died in Mexico being transported to the farms there.
"We believe that the death and suffering of those animals alone should preclude any new exports and we will be making that message quite strongly to the Government."