The demand for liquid milk has fallen by more than double because of the closure of the food and hospitality sectors.
AHDB said sales by liquid milk processors servicing foodservice or wholesale markets have dropped by 50-60% during the pandemic.
Closures of restaurants and hospitality sectors has left some processors without a viable outlet for their milk and milk products.
A new campaign by the Welsh Government will be launched next week to increase the demand across the UK to support the dairy sector. It will help balance the oversupply of milk from the closure of the food service sector.
During these challenging times it is vital we work closely with governments across the UK and use the powers available to us to protect the supply chain and mitigate against the severe disruption this crisis is causing.
The campaign will aim to increase consumer demand for milk by 3% over a 12 week period.
The initiative follows recent moves to support the dairy sector with the temporary relaxation of competition laws to enable greater collaboration so the sector, including dairy farmers and processors, can work closer to solve the issues it is facing.
It all comes at a crucial time for the farming industry in general. The summer months are normally when the agricultural industries and rural communities showcase what they do best.
However the outbreak meant events like the Royal Welsh Show were cancelled.
Farmers have said the fallout from coronavirus has eclipsed their concerns about brexit. The said the had ''never seen anything like this before''.