Wales needs a clear long-term strategy to develop its dairy industry to overcome the volatility of milk prices and input costs, a leading member of the Farmers’ Union of Wales (FUW) has said.
Dai Miles, FUW Deputy President, an organic dairy farmer and founder member of the organic dairy cooperative Calon Wen, was speaking ahead of the Welsh Dairy Show, which takes place at the Carmarthen Showground on Tuesday 20 October.
Wales produces around 1.8 billion litres of milk every year, and milk produce made in Wales is estimated to be worth over £900 million annually according to the latest figures.
And with nearly 50% of all Welsh milk processed outside of Wales, Mr Miles believes that increasing processing capacity here in Wales could create more jobs and see more of the economic value of milk retained in rural communities.
“Wales is punching way above its weight compared to the rest of the UK when it comes to milk production and its economic and social contribution goes well beyond the farm gate”, he said.
“Dairy production supports processing businesses, agricultural contractors, feed merchants, machinery dealers, vets, hauliers and retailers, it sustains family businesses, the Welsh language and culture; indeed it is integral to the very fabric of rural Wales.”
However, a 16.3% drop in the UK average farmgate price between August 2025 and August 2026, the hottest summer on record which saw many farmers forced to feed their cattle with fodder intended for the winter, and rising input costs including the need to vaccinate for Bluetongue have made this a particularly difficult year for the sector.
“The resilience of our dairy farmers should never be underestimated”, Mr Miles added.
“Technological advances have transformed the sector, significantly reducing production costs and increasing efficiency but we cannot simply expect farmers to become more efficient indefinitely to compensate for every increase in costs or every fall in milk price.
“We need a supply chain that recognises the investment, skill and risk involved in producing milk, and a pricing system that gives farmers greater confidence to plan for the future.
“And we need to look beyond the immediate challenges of price falls and cost increases and ask, where do we want the industry to be in ten or twenty years time?
“At a time of considerable international uncertainty which is exposing how vulnerable our food system can be, we need practical action, including a clear strategy for Welsh dairy farming, processing capacity, investment and the future of our rural communities.
“With 99.6% of British households buying dairy products, it could be argued that the sector should be recognised as critical national infrastructure. Our products are valued, our industry matters, and we have a firm foundation on which to build for the future.”
The need for a long term strategy for the Welsh dairy industry reflects the FUW’s call for a cohesive Welsh food system outlined in its 2026 manifesto published ahead of the Welsh Senedd elections in May.
The Union welcomes the establishment of the Welsh Government’s National Food Strategy for Wales as an important step towards developing cohesive long-term investment into Welsh food chains and minimising the impact of market volatility for primary producers.
Dai Miles will be speaking at a pre-Dairy Show event hosted by the Famers’ Union of Wales at the Carmarthen Show Ground on Monday evening, 19 October.
Case study: Milk and eggs
On the eve of the Welsh Dairy Show, the FUW is hosting a farm visit with the Hughes family, Eifion, Ann, Aaron and Ioan at Godregarreg, Llangadog, winners of The Royal Countryside Fund Family Farm Award which was presented at the M&S Select Farm Awards during the 2026 Royal Welsh Agricultural Show.
Godregarreg has been in the family since 1936 when Eifion’s grandfather, John Hughes, moved there from Cwmbran, Myddfai.
With the acquisition of grazing rights on the Black Mountain, the original holding grew from 28 acres to around 200 acres. Subsequent acquisitions made more recently have taken the unit to 400 acres, with a further 120 acres on rent.
In 2016 they suffered the trauma of losing their entire dairy herd to TB. Determined to rebuild, they imported 88 Flekvieh cattle from Austria. Crossed with Friesian cows in subsequent years to improve milk volumes, the herd today stands at 140 and the milk is sold to Leprino for mozzarella production.
Eager to source alternative streams of income to support the family, they established a free range egg production facility in 2018.
Accommodating up to 32,000 Shaver hens, they supply Cornwall-based family egg business St Ewe, who list M&S, Tesco, Ocado and Morrisons amongst their customers.
Conscious of the need to insulate themselves from the vagaries of the energy market they were early adopters of renewable solar energy.
In 2011 they installed an 11kw solar unit on the dairy unit which has provided electricity but also a small yet valuable income stream as part of the UK Government’s Feed In Tariff which was available at the time.
Their commitment to sustainable energy was underlined with the installation of a 49.8kw solar panel set up during the construction of the egg production facility which supplies energy for their operations and feeds surplus energy into the National Grid.
Despite 80 years of milking on Godregarreg, ongoing concerns about Bovine TB, changing regulations, the volatility of milk prices and escalating input costs mean their focus for future development is unlikely to be on expanding the dairying side of the business.
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