The Chicago Mercantile Exchange launched its cheddar cheese futures market yesterday and two of the US's largest cheese firms said food companies and restaurants would benefit from the prices set there. "The time is right," said Ms Marcia Glenn, vicepresident of procurement for Kraft Foods USA.

In 1996, cheese prices moved sharply higher in reaction to high feed costs for dairy cattle. Prices have since come down, but Ms Glenn said the volatile moves illustrated the need for some type of price management.

A cheddar cheese futures market will let buyers and sellers set prices up to a year in advance.