The Farmers’ Union of Wales (FUW) has warned that plunging milk prices are placing Welsh dairy farms under serious financial strain, with many facing losses that could run into thousands of pounds each month.

The union convened an emergency meeting of its Animal Health & Dairy Committee last week after members reported a sharp drop in autumn milk prices. Farmers across Wales expressed widespread anxiety, saying processors are already signalling further reductions in the new year, with commodity markets offering little hope of stabilising farm gate prices through the spring.

Union figures estimate that average milk prices could fall to just 30–35p per litre, well below the average production costs of 39–44p per litre identified in a recent Kite Consulting report. Members have raised concerns confidentially, fearing that contractual obligations could leave them exposed to significant losses.

Following the committee meeting, FUW officials met with Deputy First Minister Huw Irranca-Davies MS in Cardiff on Wednesday, December 3, urging urgent consideration of government support or intervention to protect family-run dairy farms and prevent long-term damage to the 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,” he said.

“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 says it 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.