Hunter school prawns stocks are at record lows due to the impact of the drought in the region's seafood nurseries.
Vast areas of salt marsh and wetlands surrounding the Hunter River, Tuggerah Lakes and the Myall Lakes that are home to millions of juvenile prawns have dried up over the past 12 months.
In addition, the few prawns that are in the area have not been flushed into the ocean due to a lack of rainfall.
"It's an alarming situation to be honest; It's about 50 per cent down on a good year," Commercial Fishermen's Co-operative general manager Robert Gauta said.
"No one can remember this sort of downturn before."
The drought is another blow for Hunter River fishermen who have had to deal with the impact of per-and poly-fluoroalkyl pollution on their industry in recent years.
But the environmental catastrophe is not going affect or availability of prawns for Christmas.
Mr Gauta said farmed prawns from Queensland and South Australia will be brought in to supplement local supplies.
"We normally produce enough prawns in the Hunter to send some to Sydney but that's not happening this year. We will be hanging on to what we have got," he said.
Sydney Fishmarkets said earlier this week that fire and drought would impact on the supply of seafood this year.
In addition to prawns, other impacted species include mud crabs, pipi, octopus and estuary fish such as tailor.
Research from the Marine Stewardship Council conducted in October found 65 per cent of Australians plan to buy or eat prawns this summer or for Christmas.
Prawns come third on the list of favourite Aussie Christmas foods.
While 42 per cent said prawns were their favourite Christmas food, 54 per cent listed ham and 43 per cent said Christmas pudding.