Signs of recovery Relief could be on the way in the dairy sector as product prices show the first signs of rising in over a year. A downward trend since mid-2001 saw both butter and skimmed milk powder fall to the intervention price level. Cheese prices dropped by 30% while other commodity products, like whole milk powder, fell 20%. But the markets are now showing signs of recovery with modest price increases over the past week or two. Bulk butter values have moved up by around 2% in some Continental markets and less is being intervened. With manufacturing volumes falling seasonally and 30,000 tonnes less being stored this year under the Private Storage Aid Scheme, the butter market could firm up during the autumn. Similarly, the skimmed milk powder market appears to have shrugged off progressive reductions in the intervention price introduced by the tender system which, since mid-June, has reduced the support price up to last week by 3.5%. In fact, SMP prices have been hardening, particularly in the animal feed sector. There is growing confidence that the closure of intervention at the end of this month will pass off without any fall in prices. In the cheese sector, prices have either stabilised or started to move up. The Cheddar market, one of the weakest in the spring, is now coming back into balance as lower milk output enables cheese makers to trim their production and their stock levels. Cheddar production in England & Wales was down by 10% in May ­ the first year on year reduction for 12 months. {{CANNED GOODS }}