Concern is mounting among farmers in Wales as dairy prices have experienced a significant decline, leading to widespread anxiety within the agricultural community. The Farmers Union of Wales (FUW) has reported that many farmers are grappling with a drastic reduction in milk prices since the autumn, and further price cuts are anticipated into the new year. Commodity markets currently offer little reassurance for stabilizing farm gate milk prices through spring, exacerbating the situation.
Average milk prices are forecast to fall to just 30 to 35 pence per litre, while a previous report by Kite Consulting estimated average production costs to be between 39 to 44 pence per litre. As a result, many dairy farms in Wales could face losses amounting to thousands of pounds each month if these troubling trends continue.
Gerwyn Williams, Chair of the FUW Animal Health & Dairy Committee, expressed grave concerns about the situation. “The speed and severity of this price drop are unprecedented,” he said. “Farmers are facing an impossible situation where their input costs remain high while the value of their product plummets.” Given the seriousness of the crisis, the committee has called for an emergency meeting to address the viability of family farms, which are now at significant risk.
Williams emphasized the urgency for immediate governmental support, stating, “Some can weather a storm for a short period of time; however, rumors that this situation could extend into the summer of 2026 will see businesses shut.” He noted that many modest-sized family farms have heavily invested in infrastructure to meet regulatory requirements and improve efficiencies. The current price reductions threaten their ability to meet financial obligations.
The implications of this price collapse extend beyond individual farms. Dai Miles, Deputy President of FUW, highlighted the broader impact on rural communities. “Dairy farming underpins thousands of jobs in Wales and plays a vital role in the economic, social, and environmental fabric of our rural areas,” he stated. “When prices fall this sharply, it isn’t just farmers who suffer—local businesses, services, and entire communities feel the impact.”
In response to the crisis, NFU Cymru has taken action by writing an open letter to milk processors, urging them to act responsibly during this challenging period. The letter reminds milk buyers of their obligations under fair dealing legislation and stresses the importance of maintaining open communication and transparency with suppliers. Jonathan Wilkinson, Chair of the NFU Cymru Dairy Board, pointed out the necessity of a fair and transparent dairy supply chain, particularly as many farmers face a difficult winter.
Paul Tompkins, Chair of the NFU Dairy Board, noted that this situation represents a critical test for the new contract regulations. “This is the first real test of the new contract regulations; the first time the sector has had an Adjudicator overseeing compliance with the regulations,” he explained. Farmers are now empowered to request explanations for how their milk prices are calculated, ensuring that any changes align with their contracts. It is crucial that dairy farmers engage actively with their buyers and the new regulations during this challenging period.
As the dairy sector faces these unprecedented challenges, the call for swift action from government and industry stakeholders becomes ever more pressing. Farmers across Wales hope for solutions that will stabilize prices and secure the future of their livelihoods and communities.
