Cheese prices must move “substantially and quickly” First Milk chairman Bill Mustoe has warned, as he announced his departure from the company this morning.

Mustoe will step down at the company’s AGM in October after four years at the helm of the Scottish-based dairy co-operative.

In a statement announcing the move, he claimed that the Cheddar market was “a problem right now” as money was tight throughout the supply chain and large volumes of Cheddar continued to be imported from Ireland at lower prices.

First Milk had supported its farmer members “to the hilt” in terms of milk prices but in future there needed to be better returns for cheese, he said. “It’s no exaggeration to say that I think we are coming to a crunch point for the British cheese industry.”

Speaking of First Milk’s broader business, he said recent investment made by First Milk and the added value strategy it had set would position the company well for the future.

Mustoe, who joined First Milk in 2009, is credited with helping to turn the business around after it made a £7m loss in the year to 31 March, 2009.

First Milk is currently searching for a new chairman to replace Mustoe in October.

It also announced this morning that Pembrokeshire farmer Nigel Evans, who has been on the First Milk Board since 2010, has been appointed vice chairman designate.