Cheese supply restrictions loom for some

The British Cheese Board (BCB) has responded cautiously to warnings that some cheese manufacturers may have to restrict supplies to customers unless they are prepared to pay higher prices.

BCB secretary Nigel White said each cheese supplier's position was likely to be slightly different: "Some suppliers will be short of milk, especially because they have been hit by the bad weather in July. Individual companies will be in different positions depending on their products, the age profile of their products and their customer base."

"Northern and southern hemispheres have been hit. Demand is very strong and the only thing that can give is price," said White. "The UK is actually lagging behind Europe on price."

His comments came after Cheese producer and milk processor Wyke Farms said without "substantial" price increases for cheese, milk will be lost to exportable commodities. Consequently, cheese supply will be so restricted that product allocation would be on the cards.

"Increasing prices must be the main vehicle for improving the confidence of UK dairy farmers to ensure some growth in milk output to meet market needs," said Wyke Farms md Richard Clothier.

According to the Department for Environment, Food and Rural Affairs, July was one of the worst months in the history of UK milk production. Milk deliveries dropped by 5%, significantly worse than the 1% average year-on-year decline in the April to June quarter.

The downward trend on supplies indicates that production could drop below one billion litres per month. Milk output is not expected to recover until next spring.

Commodity block cheddar prices have increased by £1,000/t as shortages feed through to the trading market. The knock-on effect has hit Irish cheddar manufacture, which is reportedly down by 18% this year.