A DAIRY farmer says he will become the latest to sell his herd due to rising costs and the fall in milk prices.

Paul Rymer, 49, from Caldicot, has supplied milk for dairy co-operative First Milk since he began renting a 150-acre farm at Ifton Hill Farm, Portskewett in 2002.

First Milk, who buys approximately 25 per cent of all milk produced in Wales, collects, processes, and sells on the milk farmers produce and Tesco is among its clients.

First Milk decides the price of the milk it buys from its members and since May 2014, the price has dropped from 31.5p per litre to 20p per litre as of February 2015.

As well as a fall in the price of milk, First Milk has increased the monthly fee it takes from farmers for investment and borrowing costs. From December 1, 2014, this increased from 0.5p per litre to 2p per litre.

Mr Rymer, who runs a herd of 140 Holsteins and 140 heifers with his wife, Melanie, produces around 100,000 litres of milk every month.

With the falling price of milk - now cheaper than bottled water - and the increase in the monthly fee, Mr Rymer believes that he will make an £8,000 loss each month. The Rymers now plan to become the latest farm to leave the milk business - they aim to move into sheep and beef cattle farming.

Dairyco, which provides independent, evidence-based information and resources for dairy farming businesses, revealed that between May 2003 and May 2013, 1,014 fewer dairy farmers have been operating in Wales. In May 2003, the figure stood at 2,909 but this dropped to 1,895 in May 2013.

In January 2014, there were 1,872 dairy farmers in Wales but this dropped to 1,831 in January 2015.

As well as the rising costs and the fall in the price of milk, Mr Rymer said that the deferral of this month's payment from First Milk was particularly worrying.

He said: “First Milk have never deferred payments before, so the alarm bells are ringing.

"We have to let the milk go out, whether they are paying or not.

"The average age of a dairy farmer is 60 and I’m not even 50 yet. If we’re going out, what hope is there?

"The older generation are stuck in a rut.”

Neville Waters, 77, who also supplies milk for First Milk, has been a dairy farmer for 50 years and owns a farm at Nash, Newport. With 90 Holsteins, Mr Waters produces around 65,000 litres of milk per month but feels that the cheap price of milk in supermarkets is putting a strain on dairy farmers.

He said: “There are thousands of supermarket items that could be reduced and a fraction added to the price of milk.

“It leaves those dependent on milk in a difficult place.

"It’s not good for the economy of the countryside or the economy as a whole.

“There won’t be enough milk for the country eventually.”

Farmers’ Union of Wales (FUW) president Emyr Jones said: “Action by supermarkets, dairy processors, and governments is desperately needed in order to boost dairy farm incomes and confidence."

A First Milk spokesman said: “We are a business owned by dairy farmers, so the board are acutely aware of the difficulties this current extreme volatility is causing First Milk members and the UK dairy industry.

“Most of our members in Monmouthshire are part of the Tesco milk pool and they are receiving a premium milk price which is significantly above other members.

“By increasing the capital contributions, the board has ensured that all members help equally to make the business and our processing assets as secure as possible in order that we can continue to process and market every litre of our members' milk.

“Every part of the business continues to be under the microscope to lower our cost base.”