This week marks the Welsh Dairy Show in Carmarthen - a valuable opportunity to celebrate the strength, resilience, and professionalism of the Welsh dairy sector. The event highlights the vital role our farmers play in producing high-quality food, supporting rural economies, and managing the Welsh countryside. As part of the event, we were delighted to host our Eve of the Dairy Show Dinner - kindly sponsored by NatWest Cymru. As well as bringing stakeholders together, it also provided an opportunity to award Jon Lewis of Gower View Foods, Carmarthenshire for his Outstanding Contribution to the Welsh Dairy sector.

However, while there is much to celebrate, the dairy sector continues to face a wide range of challenges. Ongoing uncertainty over the changes to inheritance tax, the continuing impact of bovine TB, and the regulatory pressures associated with NVZs are all affecting confidence and long-term planning. Added to this, dairy farmers have in recent weeks been hit by a series of milk price reductions announced by processors across Wales, in some cases as high as 6p per litre and, in certain instances, applied retrospectively.

These developments have prompted questions about whether the recently introduced Fair Dealings Obligations (Milk) Regulations 2024 are achieving their intended purpose. The regulations, introduced earlier this year following extensive consultation between government and industry, were designed to promote fairness and transparency in the dairy supply chain by setting out rules on contract terms, pricing mechanisms, and notice periods.

The recent price announcements represent the first significant test of the new framework. Many farmers have expressed concern that the speed and scale of the cuts, and the limited communication surrounding them from processors, may not reflect the spirit of openness and collaboration that the legislation seeks to encourage.

Under the regulations, processors are required to act transparently and provide clear information on how prices are determined. Any potential breaches can be reported to the Agricultural Supply Chain Adjudicator (ASCA), which has powers to investigate and impose financial penalties if necessary.

In light of the current uncertainty, the FUW is urging both government and regulators to ensure that the rules are properly upheld and that farmers are fully informed about their rights and the processes available to raise concerns.

The union continues to emphasise that transparency, timely communication, and fair dealing remain key to building confidence and ensuring the long-term sustainability of the Welsh dairy sector.