Farming unions in Wales are expressing serious concerns following a steep decline in dairy prices. The Farmers Union of Wales (FUW) has reported significant anxiety among dairy farmers, as many are experiencing substantial drops in milk prices since autumn 2023. Processors are indicating further reductions for the upcoming year, leaving little hope for stabilisation of farm gate milk prices through spring.
Current forecasts suggest average milk prices could fall to between 30 and 35 pence per litre. This is alarming when compared to a previous report by Kite Consulting, which estimated average production costs at 39 to 44 pence per litre. The financial strain means that typical dairy farms in Wales could face losses of thousands of pounds each month if these trends continue.
Gerwyn Williams, Chair of the FUW Animal Health & Dairy Committee, described the situation as “unprecedented.” He stated, “Farmers are facing an impossible situation where their input costs remain high while the value of their product plummets.” Williams emphasized the urgency of the crisis, indicating the necessity of an emergency meeting to address the viability of family farms in Wales.
The potential for this crisis to extend into summer 2026 raises fears of business closures. Williams noted, “These modest-sized family farms have invested heavily in infrastructure to comply with regulatory requirements and improve efficiencies, but reductions of this scale will severely impact the ability of these businesses to make their repayments as planned.”
The implications of falling dairy prices extend beyond farmers. Dai Miles, Deputy President of FUW, pointed out that dairy farming supports thousands of jobs in Wales and is integral to the economic, social, and environmental fabric of rural communities. He urged the government to collaborate with the industry to establish immediate stability and develop plans for long-term resilience.
In response to the ongoing crisis, NFU Cymru has issued an open letter to milk processors, encouraging responsible practices during this challenging period for the dairy sector. The letter reminds milk buyers of the importance of adhering to fair dealing legislation while maintaining transparency with suppliers.
Jonathan Wilkinson, Chair of the NFU Cymru Dairy Board, emphasized the need for a fair and transparent dairy supply chain. He remarked, “With many dairy farmers facing a difficult winter, it is of the utmost importance that the dairy supply chain functions in a fair and transparent way.”
Paul Tompkins, also from NFU Cymru, highlighted that this situation represents the first significant test of new contract regulations, now overseen by an Adjudicator to ensure compliance. Farmers now have the right to seek explanations regarding how their milk prices are calculated, ensuring that any changes align with their contracts. Tompkins stressed, “It is essential we see dairy farmers engaging with their buyers and the new regulations during this challenging period.”
As the dairy industry grapples with these challenges, the call for immediate action and support for farmers grows louder. The future of many family farms hangs in the balance, urging stakeholders to act swiftly to avert a potential crisis that could reshape the landscape of dairy farming in Wales.
