Dairy Crest is cutting the price it pays farmers who supply milk into its three main cheese factories because of falling retail prices.

From the beginning of June, milk for cheese going into the Haverfordwest and Aspatria dairies will see a cut of 0.5p/litre, while Davidstow supplies will be cut by half that to about 18.9p/litre.

Arthur Reeves said shelf prices were being forced down by the heavy stocks amassed by cheese makers since last summer, when it became more lucrative to make cheese than butter.

“Competitors both in the UK and overseas have been making cheese speculatively and adding to cheese stocks.”

The cuts were lower at Davidstow, where half the firm’s cheese is made, because it is dedicated to the Cathedral City and Davidstow brands.

“Branded cheese prices aren’t falling, but promotions are becoming more and more competitive.”

Tom Hind, chief dairy adviser with the NFU, said he was disappointed after the long period of price stability, but not surprised.

The sharp fall in butter prices could have encouraged the Irish dairy industry to switch more production into cheese.

He also blamed recent negative comments about cheese prices.