One in six of Wales' dairy farms have disappeared over the last three years, according to NFU Cymru.

That means 20 dairy farms are going out of business every month. There are now just 2,909 dairy farms in Wales, down from 3,119 in 2002 and 3,389 in 2001, a total drop of 480 farms.

And latest National Assembly for Wales figures show that the value of milk and milk products from Wales have also taken a nosedive, dropping nine per cent from £274 million in 2001 to £251 million in 2002.

The figures are proof that low milk prices are leading to a mass exodus of farmers from the dairy sector, said deputy NFU Cymru president, Dai Davies.

On Tuesday he chaired a briefing of key players in the Welsh dairy industry at the Welsh Dairy Event in Carmarthen. Farmers, processors, veterinary surgeons and auctioneers were just some of the individuals discussing the crunch issue of low milk prices.

"We have been saying for a long time that the current milk price of 17.8 pence a litre is unsustainable," said Mr Davies, a dairy farmer from Whitland.

"Farmers are being paid less than the cost of production and this situation cannot go on. No one can continue to make a loss indefinitely. Farmers are holding on in there, hoping that prices will improve, but they cannot wait any longer."

Milk prices have continued to fall in the past three years, dropping from 20.5p a litre in 2001 to 17.8p a litre this year. Farmers need a minimum of 19 to 20 ppl to cover production costs.

Dai Davies said that market conditions meant that a price rise of two pence per litre was overdue.

"The pound has weakened against the euro, pushing up the IMPE* by over 2ppl," he pointed out.

"International cheese prices have also risen, but we want to see this converted into extra money for dairy farmers in Wales.

"More worrying still is the effect this exodus of dairy farmers is having on Welsh agriculture as a whole. Dairying accounts for one third of the gross agricultural output of Wales. The whole of Welsh farming, and the rest of the rural economy, is being damaged by low milk prices.

"I just hope that by working together we can find a way out of this mess. The alternative is the disappearance of our dairy industry."