Low milk prices may cut British cheese supply

The price of cheese and butter is expected to soar this summer after a wet spring caused a significant drop in milk production in the UK.

The tightening of supply, coupled with reduced cheese imports owing to the weak pound, is expected to see costs rise by an estimated 10 per cent in the coming months.

However dairy farmers are still struggling with low prices – prompting Hayley Campbell-Gibbons from the National Farmers' Union to issue her stark warning.

She claims that British producers are missing out on millions of pounds from inequalities in the market and said that if the situation does not change it would mean "milk production will continue to fall and there will be less British cheese on the shelves".

Processors which have passed on price rises to farmers have only done so by around half a penny per litre of milk.

Ms Campbell-Gibbons, chief dairy adviser with the NFU, said: "Farmers have been watching the cheese market closely and, having seen it strengthen along with other dairy commodities, are growing tired of waiting for this to be reflected in the price they get for their milk.

"Nobody can explain why farmers are not getting the returns they should be which only leaves two possibilities.

"Either the processors are holding onto this extra money to boost their own profits or the retailers are not prepared to pay a realistic price for British dairy products – instead choosing to sell milk and cheese on ridiculous promotional deals which everyone else has to fund."

David Cotton, who recent took over as the chairman of the Royal Association of British Dairy Farmers, said: "I think they forget that if dairy farmers cannot reinvest they won't keep going because their costs and overheads are too high. They need better profits to make that investment."

Mr Cotton said that he felt the industry was beginning to respond to the plight of farmers. Many supermarkets had developed dedicated supply chains for milk but "that dedicated supply chain is home to very small numbers of suppliers".

Mr Cotton also said that improvements to the accuracy of labelling, an issue highlighted by the Yorkshire Post's Clearly British campaign, might help the dairy sector by increasing demand for British products.