The supermarket price wars have cut the cost of a basket of dairy staples since May -despite record high commodity prices.

Exclusive price survey data for The Grocer shows that cheese prices have fallen 1% in the last 10 months, and are now lower than they were two years ago.

Our regular basket of six dairy products costs £13.49 - 3.3% cheaper than it was two years ago.

National Farmers' Union chief dairy adviser Tom Hind blamed the price falls on retailers. He accused them of being locked into a "disgraceful" price war on dairy products and Cheddar cheese in particular.

The price cuts were unacceptable given the £600 per tonne leap in wholesale price, he added.

"There will have to be a correction on retail dairy prices and an end to the summer silly season because it is unsustainable," he warned.

"If they don't pay more for milk it will go into manufacturing uses where our members can get a guaranteed return."

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