Domestic industry gaining significant market share but at the cost of low prices Cheddar bottoming out After falling by over 25% since last September there are now signs that UK Cheddar prices are stabilising. During early May, further price weakness enabled many buyers to purchase mild Cheddar at prices down to £1,650 per tonne or even lower. The result that many cheese producers were selling at below the costs of production, even taking into account recent low farm gate milk prices. This extreme situation appears to have stiffened the resolve of makers and it has become much more difficult to buy mild cheese over the past week or two at prices below £1,700 per tonne. Similarly, the market prices for medium and mature Cheddar appear also to be stabilising although prices show wide variations according to maturity, quality and the reputation of the producing creamery. Although it is likely that prices will be firmer in the autumn as manufacturing levels fall and stocks are brought under better control, the declining price trend may well take some time to reverse itself. One favourable factor for home producers is that low UK prices appear to be acting as a deterrent for Irish and Continental shippers to the UK. The latest import data show that total Cheddar imports fell for six consecutive months up to February this year, with imports during this period dropping back by over 10,000 tonnes compares with a year earlier. At the same time domestic output of Cheddar has continued to increase. During the first quarter of this year production of Cheddar in England & Wales rose by just over 10%, which meant that domestic Cheddar output has now risen for 15 consecutive months. In effect the domestic cheese industry has been gaining significant market share but at the cost of relatively low prices. {{CANNED GOODS }}

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