Milk price drop to create 'perfect storm' for dairy farmers

Over the course of last year milk prices rose significantly to keep up with the huge increase in costs. However, the price paid to farmers known as the farmgate price is predicted to drop over the coming months – even though costs remain extremely high.

NFU Cymru Dairy Board chairman Jonathan Wilkinson, who has his own dairy herd near Meifod, said that price squeeze could put farmers under further pressure after the economic turmoil of last year.

“Welsh farmers have faced unprecedented hikes in input costs since the middle of last year, with agricultural inflation now running at over 20 per cent,” said Mr Wilkinson.

“Currently, we have a perfect storm of soaring input costs and downward pressure on farmgate prices, making last year and the beginning of this year extremely challenging for all sectors of Welsh farming.

"With markets starting to come under pressure, it is vital that the supply chain operates properly and the work NFU Cymru is leading on dairy contracts will be crucial to securing that fairness.”

The news is a further blow to an industry already under pressure. The last year has seen many farmers in the county reducing the size of their herds, dealing with being overextended on loans and huge increases to prices to necessities such as energy costs, fuel, fertiliser and animal feed.

Mr Wilkinson said NFU Cymru would be helping farmers as much as they could and urged the public to back the county's farmers 

“In the dairy sector, as we head towards spring, which is traditionally the time of peak milk production, we are closely monitoring the market situation," said Mr Wilkinson. "I encourage consumers across Powys to support Welsh dairy farmers by looking for the Welsh flag and Red Tractor when they are purchasing their dairy products.”

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