Cheesemakers are facing nervous times with prices falling, some UK and Irish processors "making cheese like it is going out of fashion" and Tesco's June re-tendering process imminent.

In January the amount of milk sent into UK Cheddar plants rose 20% compared with January last year while across the Continent supplies rose 4.6%, both at the expense of butter and SMP.

The pressure on milk prices led to Dairy Crest dropping its milk for cheese price at Haverfordwest and Aspatria by 0.5ppl from June 1, and by 0.25p at Davidstow. This reflected lower prices, which dropped £100 a tonne that week. "The market is tricky," said milk purchasing director Arthur Reeves. "The Irish are putting a lot of milk into cheese, and a lot of that will come over here," he said.

NFU dairy policy chief Tom Hind agreed that the industry was nervous about Tesco's bid round. "We understand that Tesco is the only major retailer that has no verbal commitment to source own label Cheddar from the UK."