Welsh dairy farmers are warning of a 'perfect storm' of pressures – from extreme weather and falling milk prices to tighter regulations and looming policy changes – as the industry braces for one of its toughest winters in recent memory.
Speaking ahead of this week’s Welsh Dairy Show, NFU Cymru said the combined weight of economic, environmental and political challenges had left many farm businesses 'under intense strain'.
Union leaders pointed to one of the driest summers on record, rising feed costs, and falling milk prices as key contributors to the crisis. The situation has been compounded by mounting regulatory requirements, uncertainty over future support payments, and concerns over potential inheritance tax reforms.
NFU Cymru Dairy Board chair, Jonathan Wilkinson said farmers were facing an unprecedented range of challenges all at once.
“Rarely have Welsh dairy farmers had to juggle so many varied and competing issues,” he said.
“The prolonged hot, dry summer has resulted in very variable forage yields, leaving many having to source feed far earlier in the year than usual.”
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Rising feed costs and the 'spectre of huge potential inheritance tax bills' are adding to financial pressures, Wilkinson warned, with recent farmgate milk price drops of up to 18% 'forcing many to look at their balance sheets with real concern'.
Animal health remains another worry, with the ongoing threat of bovine TB and the risk of Bluetongue outbreaks adding to uncertainty. Wilkinson said TB “routinely wreaks havoc on hundreds of Welsh farming businesses every year.”
He also criticised the Control of Agricultural Pollution regulations, describing them as an “additional major obstacle” that had left many producers “doing mathematical gymnastics” to comply with stocking limits and absorb “eye-watering” infrastructure costs. “The stress of inspections should not be underestimated, either,” he added.
The recent downturn in milk prices will also be the first major test for the new Fair Dealing Obligations in the Dairy Sector (FDOM) regulations, which were introduced earlier this year after sustained NFU lobbying for fairer milk contracts. Wilkinson said the union would be closely monitoring how milk buyers comply and raising any concerns with the adjudicator.
Despite the pressures, there remains cautious optimism for the long term.
“These sizeable threats and fears are enough to worry even the most positive of dairy farmers,” Wilkinson said.
“But I hope that these family businesses can weather the immediate storm in order to take advantage of the better times on the horizon.”
NFU Cymru has urged both the Welsh and UK governments to step in and stabilise the sector through practical support and funding guarantees. The union is calling for a long-term commitment to the universal layer of the new Sustainable Farming Scheme (SFS), which is due to replace the Basic Payment Scheme in January 2026.
It has also repeated its plea for a science-led approach to water quality regulation, arguing that “farming by calendar” fails to reflect real-world environmental outcomes.
In addition, the union has called for greater public procurement of Welsh dairy products – urging schools, hospitals and other public institutions to source more local milk, cheese and cream – and for renewed efforts to boost dairy exports by capitalising on international demand for Welsh produce.
“Above all else, we hope that consumers continue to support our dairy farmers by buying Welsh dairy produce wherever it’s available,” Wilkinson said.
With the Welsh Dairy Show providing a timely platform for discussion, NFU Cymru hopes policymakers and processors will act quickly to steady the sector – helping farm businesses navigate a turbulent winter and emerge stronger in 2026.
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