Latest DEFRA data suggests Cheddar supplies are now showing signs of tightening and that prices are beginning their long-awaited move to more economic levels.

UK production figures for May show national output fell once more, although only at 2.4%. So far in the first five months of this year, UK cheese output has dropped by 10% compared with the same period in 2002, making 13 successive months of declining cheese output.

The cuts are now having an effect. Stocks held in public stores peaked in June last year at just over 16,000 tonnes but currently stand at 8,500 tonnes.

In the past two weeks there were the first signs that market prices will be considerably firmer this autumn. Prices for UK Mild Cheddar were reported last week to have moved from £2,000 to £2,050 per tonne, while Farmhouse Cheddar prices are up by around £300 to £2,300.

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