WELSH dairy farming businesses are feeling the pain following a downturn in global dairy commodity prices being translated into damaging farm gate price cuts. Support for Welsh dairy farmers from public, processors and retailers is vital after farmgate milk prices have fallen by around 25% in recent months.

Speaking at the Welsh Dairy Show, held in Carmarthen yesterday (Tuesday), NFU Cymru Milk Board Chairman, Aled Jones, a dairy farmer from Caernarfon, said that the current situation was causing significant financial strain on Welsh dairy farming businesses and called on the rest of the supply chain to take action to support milk producers at this time.

Mr Jones said: "Processors and retailers need to do more to deliver a sustainable milk price back to Welsh dairy farmers. There are a number of pricing models in the liquid milk sector that do this but with the majority of milk in Wales processed into cheese we urgently need to see these models expanded into milk that is destined for the domestic cheese market.

"Milk and milk products that are being processed and sold in the UK should not be suffering the level of price cuts we are seeing. Retailers and processors supplying the UK market should not be taking advantage of the volatility seen on global markets to cut milk price."

Aled Jones continued: "This to me is highlighted by the fact that while farm gate milk price has plummeted we have seen the average retail price of a kilo of cheese increase by 3.8% in the year ending to August 17 2014, retailers need to explain how this can be the case.

"Where cheese and other processed milk products produced from Welsh milk are being sold on by retailers as 'Welsh' or 'British' then we need to see transparent pricing structures being developed that recognise that these products are being sold on the home market and therefore the price should be determined by the retail price and not based on global commodity markets.

"Retailers and processors, through dedicated supply chains, need to show long term, meaningful, commitments with their producers that benefit all parts of the supply chain. This type of relationship will secure a long term supply of a world class product to retailers and protection from damaging market volatility to the primary producer.

"With regards to milk that is processed to supply the liquid market I am concerned at the impact current retail price wars on bottled milk is having. Processors and dairy farmers must not end up paying the price for retailers fighting for increased customer support through their liquid milk offer. This is a real worry particularly for those producers supplying retailers and food businesses who do not have determinable milk pricing mechanisms. As a Union we will be watching the situation closely and will not shy away from holding to account those who may seek to take advantage of the current situation."

Mr Jones also recognises the need to grow the market for dairy products.

"As a supply chain we must work together to build markets for our produce, working together to increase the proportion of Welsh and British Produce on retail shelves, looking wherever possible to open up and build new markets for milk products overseas," he said.

"Consumers have a hugely important role to play as well, the public provided unfailing support to dairy farmers throughout the 2012 SOS Dairy campaign we ask that they back us again through looking for Welsh milk and dairy products or through products that carry the Red Tractor logo."