More than 154 people could lose their jobs as Arla Foods UK seeks to reorganise its cheese business.
The processor said it intended to improve efficiencies by consolidating operations across its production and packing sites.
NFU dairy board chairman Michael Oakes said the industry would be watching closely to see if cost savings brought about by increased efficiency had a positive impact on milk prices.
He said: "We have to get more efficient on our own farms and processors are doing the same.
"Arla is cutting costs throughout the business, overseas as well as in the UK and a big chunk of those savings will eventually go back to the milk price.
"But we have to be mindful people have worked at these sites for a very long time and they are facing a very uncertain future."
Under the plans, production at its Llandyrnog creamery in Denbighshire, North Wales, will cease, along with smaller packing operations at Malpas, Cheshire and Lockerbie, Dumfries.
A spokesman said current cheddar cheese volumes from Llandyrnog would move to creameries at Taw Valley, Devon and Lockerbie.
The Arla spokesman said he did not anticipate any impact on its supply of Welsh milk and ‘will endeavour to produce its current portfolio of cheeses dependent on demand from its retail or foodservice customers’.
Tomas Pietrangeli, managing director, Arla Foods UK, said: “This proposal enables us to not only drive efficiencies but also retain ample capacity to better meet the evolving needs of our customers in areas such as retail, foodservice and export.
“It is also critical we retain our approach to innovation and never compromising quality in our cheese business and we feel that these steps are the best to take to ensure our sustainability."
If the proposed plans proceed, Arla will look to recruit colleagues into vacant positions within its network.
Mr Oakes said there could be an opportunity to use the Llandyrnog plant to process other product.
He used the example of the Lactofree range, which used to be imported but was now manufactured at Arla’s plant in Aylesbury, Buckinghamshire.
Up to 15 jobs could be axed at the firm’s UK headquarters in Leeds.
Arla Foods is a dairy co-operative owned by 11,200 dairy farmers, about 2,400 of whom are British.