Recent weeks have been a cause of alarm for many dairy farmers across Wales as milk prices continue to drop. While fluctuations in milk price are nothing new to the industry, the speed and direction of the current downward trend has prompted understandable concern among producers, particularly given wider pressures such as regulation and wider uncertainty.

In response, the FUW recently held an emergency meeting of our Animal Health & Dairy Committee to gather a clearer picture of what farmers are experiencing on the ground. Representatives from across Wales shared their observations, and although every business is different, a consistent theme emerged: milk prices have fallen over the autumn, and processors are indicating further reductions into the new year. Current signals from the commodity market suggest that recovery may not be immediate, making financial planning more challenging for many farms.

Current forecasts point towards average farmgate prices in the region of 30–35p per litre, while previous analysis from Kite Consulting places production costs at 39–44p per litre. If these figures continue, the average dairy farm in Wales would expect to lose thousands per month – placing many in a position where covering day-to-day costs becomes unsustainable, if not impossible.

Following our committee discussion, we raised the issue directly with the Deputy First Minister, Huw Irranca-Davies MS, in Cardiff on 3 December. We outlined the potential implications for Welsh dairy businesses if prices remain suppressed for a prolonged period, and stressed the importance of exploring options that may help maintain stability in the sector.

Dairy farming underpins thousands of jobs in Wales and plays a vital role in the economic, social, and environmental fabric of our rural communities. When prices fall this sharply and this quickly, it isn’t just farmers who feel the strain; the ripple effects are experienced by local firms, contractors, and wider rural businesses. For that reason, we have emphasised to the government that maintaining a healthy and resilient dairy sector is crucial, not only for producers but for the sustainability of rural Wales as a whole.

Going forward, the FUW will continue to monitor developments closely and work constructively with the government, processors and the supply chain. Our focus remains on achieving fair returns for producers, supporting members during this unsettled period, and ensuring Welsh dairy maintains a stable footing for the future.