Ongoing milk price cuts are forcing more Welsh dairy farmers to operate at a loss, raising fears that many will cut production or quit the sector.

Some dairy processors have cut prices by more than 30% in the past six months, to about 35p/litre.

At this level it is nearly 10p/litre below what it typically costs a dairy farm to produce milk.

In the year to April 2023, the number of dairy farmers in Wales fell by five per cent, with 77 producers exiting milk production, according to recent AHDB figures.

Carmarthenshire dairy farmer Dai Gravell, who is the NFU Cymru Dairy Board Vice Chair, said the financial pressure on dairy farmers was intense.

Although the cost of inputs such as feed, fuel and fertiliser had been falling, a wide gap exists between the farmgate price and cost of production, he said.

“We are a resilient lot, dairy farming is in our blood, but this situation is causing huge worry and financial pressure,’’ admitted Mr Gravell, who milks 400 cows at Muddlescwm Farm, Kidwelly.

“Murmurings’’ from policy makers of consumer price controls were also a major cause for concern, he added.

“If the government interferes with the market and introduces price controls on food it won’t be the supermarkets who will shoulder the financial repercussions of that, it will be farmers.’’

Auctioneers have confirmed that low milk prices and high cull cow values are encouraging more dairy cows to be sold.

At Carmarthen Mart on June 14, there were 121 dairy cows and heifers offered for sales, with 12 cows sold for more than £2,500 and heifers averaging £1919.48.

“Second quality would be in line with previous weeks with in-calvers and heifer calves meeting a high demand,’’ said auctioneer Llyr Jones, of Nock Deighton.

The prolonged dry spell weather could also be a factor in encouraging more dairy animals to be sold with farmers concerned about fodder availability.

The Met Office reported that for the month of May UK overall rainfall was only 55% of the average.

Dairy farmer and Farmers’ Union of Wales vice-president Dai Miles said although the current situation was difficult for many milk producers, recent discussions with industry experts had painted a rosier picture going forward.

“There is a good deal of confidence that the situation will sort itself out within a year,’’ said Mr Miles, who produces organic milk in Pembrokeshire.

“It is tight for farmers out there but production is dropping off and it is a case of holding on tight.’’