16 July 2007, 18:23 PM
  • Due to freak weather and the runaway global demand for milk, industry experts are warning that the price of cheese is likely to soar by Christmas if the cost of milk increases as expected.

The cost of producing Cheddar in Britain has already increased by £350 a ton in the past three months, taking the price over the £2,000 mark. Cheesemakers predict that the production cost may rise by 40p a pound by the end of the year – bad news for cheese lovers, who have enjoyed four years of stable prices.

“There has been a surge in the price of butter and milk,” said Nigel White, secretary of the British Cheese Board. “It’s going to have to ripple through to the cheese market. A lot of cheese prices are based on contracts that are soon going to come to an end.”

He said the production cost of milk was currently around 18p a litre. As contracts are renewed the price is expected to soar to 25p by Christmas. Experts say a massive increase in demand for milk from countries such as India and China had played havoc with the cheese market.

In addition, a severe drought in Australia – one of the world’s biggest milk producers – and an EU policy to reduce milk production among member states, has restricted supply.

However, some argue that Britain has only itself to blame thanks to a decreased commitment to dairy farming. In 1995, there were more than 28,000 dairy farms in England and Wales. In 2006 there were fewer than 13,000. A further 31% of dairy farmers plan to leave the industry within the next two years.