A former chairman of the Farmers' Union of Wales milk and dairy produce committee has expressed frustration at the significant cuts in the price farmers are to be paid for their milk.
Yesterday, First Milk announced a drop in the price it will pay for both liquid and manufacturing pools by three pence per liter (ppl) - taking effect from October 1. This reduction brings the liquid pool down to just 25.1 ppl and the manufacturing pool to 26.1 ppl.
Dairy Crest also recently announced a price reduction of 1.1ppl to farmers on standard Liquid and Davidstow contracts from September 1.
"We are frustrated that milk prices are once again plummeting just as the industry is beginning to gain the confidence it needed to invest in a better future," said former FUW milk and dairy produce committee chairman Eifion Huws who runs a dairy farm at Bodedern on Anglesey.
"These price cuts are unsustainable and will have a serious impact on members cash flow.
“The volatility in the global dairy market is well documented and the Russian trade embargo will no doubt exacerbate the continuing fall in global and European dairy markets.
“Russia imports less than one percent of the UK’s cheese, butter and skimmed milk powder, however the loss of trade for bigger exporters such as Germany and the Netherlands could cause downward pressure on prices through an increase in available supply,” added Mr Huws.
In response to the Russian trade sanctions, the European Commission has taken action to minimise the negative impacts of the ban. The Commission has opened private storage aid for butter, skimmed milk powder and certain cheeses to cover the costs of storing these products for the next three to seven months.
“The FUW has consistently reiterated that the loss of quotas in 2015 will only compound an already volatile market place and the recent steps undertaken by the EU to try and counter the increase in available stocks following the Russian dairy ban further serve to highlight our position on this matter,” added Mr Huws.