“Double trouble!”

There are of course two lanes, the fast lane of mass manufacture cheese and the slow lane of the artisan and speciality types, where many are generally less moved by base milk cost influences.

The doom loop of milk pricing for farmers has been a bitter bruising issue for almost two years, with so many now at the end of their tether, gone or actually waiting to go. I sometimes wonder why we have so little respect for a farming community which if fairly rewarded is the envy of Europe in terms of quality and efficiency.

The arguments about how and why would fill several chapters, but dependent on where the milk pendulum on surplus or shortage rests, cheese may be over-supplied, under-priced and seeking buyers, or as it is now seeing itself deprived of milk share, lagging behind the economic return curve or in the slow lane of price recovery.

Right now milk is well below previous volume production levels, and although main milk contracts still look low at circa 22-23p, it’s rising quickly with spot milk in the 35p zone.

Cheese is always last in line for milk availability, so if major makers want to maximise their production facility output they will quickly be made to take higher prices from those with milk to offer, and in turn, seek to pass it on or simply not invest in laying down cheese that has to be in a home nine-12 months hence. All this whilst the main cause of the issue, the low price of fresh milk, is kept in check by those using it as a consumer war weapon. The irony being that no matter how low the price of fresh milk, no one sells anymore.

With Cheddar at least there is some stockpiling potential and an opportunity period of grace to be able to pass on and recover costs. So the Cheddar brands will play their own Russian roulette of who blinks first, knowing that someone will take a mauling from some retailer over daring to ask.

Types like Wensleydale, Cheshire, white Stilton, English Brie and even Mozzarella have no chance to hold large stocks, so the impact here will arise much more swiftly, and prices at trading level have already moved upwards.

So as we enter the autumn period and the big slow down in milk production, there will be an acceleration of the milk availability stress and price increases on traded lines are here now.

Meanwhile, in the slow lane, many of the artisan makers, especially those who provide their own milk, are protected from much of this as almost all did not join in the price tumble in the past year, continuing to cost their milk for their own cheese at its 2013-4 price. Those in contract, too, should find little pressure this side of Christmas, with the exception of some commodity short life cheese.

As if that weren’t enough, with a determined double whammy, the trade has now to begin facing in full the effects of the Sterling fall which began immediately after June 23rd, with Sterling slipping some 11-12% at its height, and with unwelcome speed many makers on the Continent now feel a price rise is deserved, some without the pretence of a base milk cost increase, so we may see 15-18% increases across many family favourites. Many importer wholesalers and distributors have already passed this on quietly and effectively with probably minimum impact, but its not genius to predict an autumn of increases.

Cushioned by deflationary food costs, there is now the sensitive position of managing any cost changes at a time when that’s going to be truly unpopular to the consumer. I suspect that in the haze up to Christmas it will largely be accepted as a reality, but with the cold months of winter to follow and the impending price wars the time I should be concerned about is February onwards, the potential sales impact of the cocktail of milk prices increases, and exchange rate recovery.

Let’s welcome the arrival of an early spring, a dose of sanity and stability.

As the first salvos of the latest price war reverberate around the market, seeking increases may well be a death knell for some brands, some lines, in some retailers.

And the biggest victims will be mid range makers and suppliers who haven’t the big brand cash cow crutch to call on, or can’t begin the size engineering deception that was the main tool of cheating the consumer in the recent past with same price less volume.

All of this is about to be fought out on the big stage and some elements will cascade down to the independent trade, who may well manage this more sensibly and sensibly.