Market forces are restricting the supply of UK Cheddar which could lead to higher prices. Consultant Michael Bessey said: "Milk output in the UK was severely depressed from December. The shortfall over levels a year earlier reached a peak of 7% in March as farmers struggled to avoid exceeding their milk quota in the April/March milk quota year." Half the national output is devoted to the priority liquid milk market, so supplies to dairy product manufacturers have been tight. By March, the shortfall reached 14%. Bessey said: "Manufacturing milk sector priorities have been distorted by the attractions of putting the milk into products with higher market returns than Cheddar. Milk for butter making has had a high priority for several months, not due to high returns on butter but because the skim milk powder supplies have been short and prices in the EU and world markets have gone up 10% in the last year. Similarly, whole milk powder prices for export have also been attractive and this has also sucked scarce milk supplies away from Cheddar makers." The result is that Cheddar production was down by 3% in December and by an unprecedented 8% in January compared with a year earlier.This is likely to have been repeated in February and March. Foreign cheddar has not been brought in to meet the shortfall. In January total Cheddar imports to the UK fell 22% to just under 4,000 tonnes. {{PROVISIONS }}

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