Dairy concerns highlighted to Deputy First Minister

Earlier this week FUW President, Ian Rickman and Deputy President, Dai Miles used their quarterly meeting with the Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs, Huw Irranca-Davies MS, to highlight the uncertainties faced by Welsh dairy farmers as milk prices fall below production costs.

Background

In recent months, dairy farmers across Wales have faced growing uncertainty as milk prices have fallen well below the cost of production, placing immense strain on farm businesses at a time when confidence within the sector is already fragile.

In response, securing meaningful support for dairy farmers has become a key lobbying priority for the FUW. The Union is committed to safeguarding not only the viability of these businesses but also the vital role they play in sustaining rural communities across Wales.

Analysis by the AHDB suggests that the recent drop in milk prices has been largely driven by oversupply in the dairy market. In the 2025/26 milk year, GB milk production was forecast at around 13.05 billion litres, nearly 5% higher than the previous year, with deliveries running approximately 5.3% ahead year-on-year through late 2025.

The situation remains complex, driven by a perfect storm of factors - including good milk-producing weather, a favourable milk-to-feed price ratio, strong global milk production, and shifting international demand.

This sustained high output has outstripped demand and processing capacity, leaving processors with more milk and dairy products than the market can absorb, which has in turn placed significant downward pressure on farmgate prices.

Survey findings

To better understand the challenges facing Welsh dairy farmers, the FUW launched an internal survey of its dairy members following an emergency meeting of the Animal Health and Dairy Committee in November.

The initial findings were stark. Survey responses showed milk prices falling from around 42p per litre in September 2025 to approximately 34.4p per litre by December 2025 - a drop of more than 7.6p per litre in just three months - with the downward trend continuing into 2026, and varying drastically from farm to farm.

Set against an average cost of production of 37.39p per litre, many Welsh dairy farmers were producing milk at a loss, placing severe and immediate strain on their businesses.

Notably, 80% of respondents had invested in new infrastructure over the past five years, including slurry storage systems to comply with CoAP regulations and broader modernisation projects aimed at improving efficiency and environmental performance. Capital outlay ranged from £12,000 to £145,000 per farm, leaving many businesses financially exposed as milk prices fell.

Given this uncertainty, it is perhaps unsurprising that over three-quarters of respondents expressed serious concerns about the viability of their businesses over the next nine months should prices fail to recover.

Calls for support

Amid growing uncertainty and financial pressure, the FUW has been at the forefront of efforts to secure meaningful support for Welsh dairy farmers.

Union officials have engaged extensively with policymakers at both the Senedd and Westminster, pressing the urgent need for intervention. Dairy prices were central to meetings with the Deputy First Minister in December and February. Meanwhile, during a visit to Westminster, FUW President Ian Rickman met with Tonia Antoniazzi, Andrew Ranger, Ben Lake, Ruth Jones, and Alistair Carmichael - Chair of the influential EFRA Committee - to highlight the scale of concern within the sector and the need for support.

In February, Ian Rickman also visited Denbigh dairy farmer Euros Hughes and his family at Gwaenynog Bach, hearing first-hand about the challenges, pressures, and ongoing uncertainty facing dairy farm businesses.

Central to the FUW’s lobbying has been calls for clearer communication between processors and producers under the Fair Dealing Obligations (Milk) Regulations 2024, alongside urging the Welsh Government to explore powers within the Agriculture (Wales) Act 2023 to allow timely intervention during periods of market collapse.

Media engagement

Alongside lobbying, the FUW has leveraged media platforms to highlight the pressures facing the dairy sector. The Union’s calls for urgent support have been featured in Farmers Guardian and a range of national and regional newspapers. Dairy farmers Rhisart Lewis and William Williams also spoke about the realities on the ground in appearances on BBC Wales Today, Newyddion S4C, and BBC Radio Cymru, helping bring first-hand challenges to a wider audience.

In February, FUW Policy Officer Elin Jenkins spoke at length with Ffermio on S4C, presenting the FUW’s survey findings and highlighting the significant impact that falling milk prices are having on dairy farmers across Wales.

Going forward

The recent drop in dairy prices, and the resulting threat to the viability of the Welsh dairy sector, remains a key concern for the FUW. The Union will continue to lobby politicians for increased support and, during its February Animal Health & Dairy Committee meeting, agreed to write to the Agricultural Supply Chain Adjudicator - who oversees enforcement of the Fair Dealings Obligations (Milk) Regulations - to request a meeting and discuss the sector’s urgent challenges.