A report looking at Welsh dairy farm performance has shown the "vulnerability and volatility" of the industry.
The report, published this week on the state of the Welsh dairy industry, is hoped will help farmers improve the performance and resilience of their businesses and prepare for the future post Brexit.
However, it shows that some Welsh dairy farms have costs of production which are higher than the milk price has ever reached.
Wales' Cabinet Secretary for Rural Affairs Lesley Griffiths said this is of "particular concern", and NFU Cymru said it shows the "vulnerability and volatility" of the industry.
In 2016, Welsh Government provided £3.2 million of European conditional aid to Welsh dairy farmers through two schemes focusing on farm business benchmarking and herd milk recording.
Seventy-five percent of dairy farmers took up the opportunity – the highest level of uptake in the UK.
Strengths and weaknesses
Along with aid funding, farmers also received a report showing the strengths and weaknesses of their business with a comparison with other dairy farms.
Data produced from the benchmarking scheme was used to produce the report, providing a snapshot of Welsh dairy farm performance.
Key findings include the importance of farmers constantly measuring the financial performance of their business to help them become more efficient.
The top performing farms demonstrate that profitable dairy farming is possible with excellent returns, even in difficult trading conditions.
The report shows that some farms have costs of production which are higher than the milk price has ever reached.
It also says farmers should take advantage of grass and maximise the milk they produce from grass and forage, and that farmers who have made a conscious choice about their production system tend to be more profitable.
'Improve efficiency'
Cabinet Secretary for Rural Affairs Lesley Griffiths said the report will prepare Welsh dairy farmers for a world outside the European Union.
She said: “The report published today will go a long way to help farmers improve the performance of their business by reducing their costs of production. This will improve the efficiency of our dairy farms, allowing them to become more resilient to business risks and milk price volatility.
“This report will provide invaluable information to help us decide how best to support the dairy sector to prepare for the future.
“While the report shows profitable dairy farming is possible, I am particularly concerned that some Welsh dairy farms have costs of production which are higher than the milk price has ever reached.
“That is why I am in the process of tailoring the support we offer these farms to help them re-evaluate the structure of their business and use their benchmarking report to see where improvements can be made.
“It is clear from the report that by becoming more efficient and focusing on producing milk at a lower cost of production, all farms can become more profitable, no matter what the milk price is.”
