FARMERS have been urged to consider reducing the over-supply of milk in an already depressed market.

The move comes after seven major Welsh dairy farmers have been given notice on their contracts with the UK's largest independent processing dairy, Freshways.

Now NFU Cymru’s Milk Committee chairman has advised farmers to consider the value in producing milk from marginal cows after the farms fell victim to the clamour for cheap spot price milk.

The dairy farms, which have a joint annual milk production of around 40 million litres, have been given nine months' notice on their contracts due to an over-supplied market, which has resulted in Freshways customers taking advantage of spot price milk. Freshways currently pays its farmers an average price of 21.02ppl.

Bali Nijjar, managing director of Freshways, said: “We have lost some contracts as people look for raw milk and packed milk which is not aligned to farmgate prices but more to commodity and over-supply based prices.’’

Meanwhile Aled Jones, who represents dairy farmers as NFU Cymru’s Milk Committee chairman, urged farmers on ‘A’ and ‘B’ volume contracts to consider whether it is worth producing litres at ‘B’ prices.

“There are different ways we can reduce production to get the market back into some sort of balance and if farmers are not making a profit from their marginal cows, now is the time to perhaps consider removing them from the herd,’’ he said.

One of the farmers affected by the Freshways decision admitted the news had been a “bombshell’’. The location of the farms, on the western tip of Wales, was a deciding factor.

“The letter came out of the blue, we had no hint that this was on the cards,’’ said the farmer, who asked not to be named.

He did have an element of sympathy for Freshways. “The spot milk price is creating havoc in the market,’’ he said. “We have changed our feeding system to get rid of all our B litres because there is no profit to be made in producing milk at 12-14ppl. But until other farmers wake up and realise that if they don’t make changes to their own systems to stop over-supply, the market is never going to recover.’’

He and the six other farmer suppliers face the prospect of having no milk buyer from December 3.

“I don’t want to be forced out of the industry so I have to remain hopeful that circumstances will change,’’ he said.

Mr Nijjar suggested that if there was a shift in the market, the seven farmers could see their contracts reinstated.

“December is a long way away yet and if we can find additional contracts, then we will look at retaining them, but no guarantees are being given. All we cannot do is to be in a substantial over-supply position at any time.’’