Wales needs a clear long-term strategy to develop its dairy industry to overcome the volatility of milk prices and input costs, a leading member of the Farmers’ Union of Wales (FUW) has said.

Wales produces around 1.8 billion litres of milk every year, and milk produce made in Wales is estimated to be worth over £900 million annually according to the latest figures.

And with nearly 50% of all Welsh milk processed outside of Wales, Dai Miles, FUW Deputy President, believes that increasing processing capacity here in Wales could create more jobs and see more of the economic value of milk retained in rural communities.

He said: “Dairy production supports processing businesses, agricultural contractors, feed merchants, machinery dealers, vets, hauliers and retailers, it sustains family businesses, the Welsh language and culture; indeed it is integral to the very fabric of rural Wales.”

However, a 16.3% drop in the UK average farmgate price between August 2025 and August 2026, the hottest summer on record which saw many farmers forced to feed their cattle with fodder intended for the winter, and rising input costs including the need to vaccinate for Bluetongue have made this a particularly difficult year for the sector.

Mr Miles said: “We need a supply chain that recognises the investment, skill and risk involved in producing milk, and a pricing system that gives farmers greater confidence to plan for the future.

“And we need to look beyond the immediate challenges of price falls and cost increases and ask, where do we want the industry to be in ten or twenty years time?

“With 99.6% of British households buying dairy products, it could be argued that the sector should be recognised as critical national infrastructure.”

The need for a long term strategy for the Welsh dairy industry reflects the FUW’s call for a cohesive Welsh food system.