The closure of a Carmarthenshire cheese factory will place downward pressure on the farmgate milk price for dairy farmers throughout one of the UK's most prolific milk-producing areas, according to the Farmers' Union of Wales.
FUW vice president Brian Walters said closure of the Saputo factory at Aberarad, near Newcastle Emlyn, with the loss of 70 jobs, would be a hammer blow to the employees and their dependent families as well as farmers who supply the facility.
"This surprise news will also have major consequences for milk producers in the area including those that supply the factory who, I understand, knew nothing beforehand that such a shock announcement was coming."
Mr Walters, who runs a dairy farm on the outskirts of Carmarthen, fears that if a buyer is not found for the factory more milk will be shipped many miles out of Wales to be turned into cheese or milk powder in the West Country.
"That doesn't make any sense at a time when consumers are increasingly seeking to buy more and more local food and drink.
"Closure of the factory will be a huge blow to the workers there and to its milk suppliers who will have to seek alternative buyers for their produce at such short notice.
"It will create downward pressure on the price they can expect to receive in the future."
FUW milk and dairy produce committee chairman Dei (correct spelling) Davies, of Holywell, Flintshire, said: "Every effort must be made by the Welsh Government to keep this crucial facility open so that workers in a very rural area with few job vacancies can remain in a job.
"In the meantime, I urge the Welsh Government to give as much support as possible to the work force and the milk producers affected by such a bitter blow. I sincerely hope it won’t lead to a drop in price for milk producers but closure of a facility so close to a large milk field is bound to add to future haulage costs."