The Farmers’ Union of Wales (FUW) has expressed concern following a significant fall in dairy prices, warning that the developing situation is placing severe pressure on farm businesses already grappling with regulatory change and wider uncertainty.
Last week, the FUW convened an emergency meeting of its Animal Health & Dairy Committee to assess the scale of the issue. Representatives from across Wales reported 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.
Union members have approached the FUW confidentially, in fear of jeopardising their contractual obligations, with serious concern over the projected milk payments for the coming months, given the offers being made that would, in many cases, drop far below the cost of production.
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.
Following the Animal Health and Dairy Committee, the Union escalated its concerns directly to the Deputy First Minister, Huw Irranca-Davies MS during a meeting in Cardiff on Wednesday 3rd December 2025, highlighting the immediate threat to family run dairy farms in Wales as a result of plummeting milk prices, with Union officials stressing the need to consider government support and intervention to prevent long-term damage to the Welsh dairy sector.
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.”
The FUW will continue to work with the Welsh Government, processors, and supply-chain partners to seek solutions and ensure that dairy producers receive fair and sustainable prices for their products.
The President of the Farmers’ Union of Wales (FUW), Ian Rickman, has responded following today’s UK Budget, which offers a partial but insufficient adjustment to the government’s damaging reforms to inheritance tax (IHT).
The FUW has repeatedly warned that the reforms, due to come into force next April, represent an existential long-term threat to Welsh family farms and the wider rural economy.
Throughout the year, the Union has undertaken extensive lobbying efforts, meeting with a wide range of MPs, Treasury officials, and other key decision-makers to press the case for protecting family farms.
On Tuesday (11 November), FUW’s Montgomeryshire Branch joined local businesses, stakeholders, MSs and a local school choir to celebrate Montgomeryshire Day with a reception in the Senedd.
The event, kindly hosted by Russell George MS, showcased the breadth and depth of the county’s rural enterprise - ranging from family farms and heritage wool to award-winning food and drink and unique tourism experiences - while giving businesses a platform to make new connections and share their priorities for growth.
Ahead of the UK Government’s Budget next week, the President of the Farmers’ Union of Wales, Ian Rickman, has written to every Member of Parliament across the UK to highlight the Union’s grave concerns about the UK Government’s proposed changes to inheritance tax, due to come into force next April.
This latest intervention follows months of lobbying by the FUW, which has consistently warned ministers and officials that the reforms represent an existential long-term threat to Welsh family farms and the wider rural economy.
Farmers and stakeholders across Wales have repeatedly raised fears that the proposals - if implemented in their current form - would accelerate the loss of family-run holdings and undermine the social fabric of rural communities.
Ahead of the UK Government’s Autumn Budget, the Farmers’ Union of Wales (FUW) has welcomed a new report from the UK Parliament’s Welsh Affairs Committee, which criticises the UK Government for its “complacency” in overlooking the long-term impact of its policies on the sustainability of Welsh agriculture.
In March 2025, the Committee launched an inquiry into the future of farming in Wales, seeking evidence from the FUW and other Welsh farming organisations on the challenges and opportunities facing Welsh agriculture, alongside the impact of UK Government policy on the sector.
