Farming unions have voiced grave concerns following a significant fall in dairy prices.

The FUW is reporting widespread anxiety among farmers, with many highlighting a drastic drop in milk prices over the autumn.

Processors are now communicating further price reductions into the new year with commodity markets providing little reassurances to indicate stabilising farm gate milk prices through spring.

With average milk prices forecast at just 30 to 35 pence per litre, and a previous Kite Consulting report estimating average production costs at 39 to 44 pence per litre, the typical dairy farm in Wales is likely to lose thousands of pounds each month for as long as these troubling trends persist.

Gerwyn Williams, Chair of the FUW Animal Health & Dairy Committee, said: “The speed and severity of this price drop are unprecedented. Farmers are facing an impossible situation where their input costs remain high while the value of their product plummets. Our committee felt it essential to call an emergency meeting because the viability of many family farms is now at serious risk. We need immediate assurances that this crisis is being treated with the urgency it deserves.

“Some can weather a storm for a short period of time, however, rumours that this situation would extend into the summer of 2026 will see businesses shut. 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.”

FUW Deputy President, Dai Miles emphasised the wider implications for 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. When prices fall this sharply, it isn’t just farmers who suffer - local businesses, services, and entire communities feel the impact. We have made it clear to the Deputy First Minister that the government must work with the industry to provide immediate stability and a plan for longer-term resilience.”

NFU Cymru has written an open letter to milk processors urging responsible behaviour during what is expected to be a particularly testing period for the dairy sector.

Milk buyers are reminded of the importance of complying with the fair dealing legislation and maintaining open channels of communication and transparency with their suppliers.

NFU Cymru Dairy Board Chair Jonathan Wilkinson said: “With many dairy farmers facing a difficult winter, it is of the upmost importance that the dairy supply chain functions in a fair and transparent way.”

NFU Dairy Board Chair Paul Tompkins said: “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. Farmers are also now empowered to request an explanation for how their milk price is calculated to ensure that any changes are in accordance with their contract. It is essential we see dairy farmers engaging with their buyers and the new regulations during this challenging period.”