Lurpak owner Arla Foods has warned that butter, cheese and milk prices could rise even further due to a shortage of workers.
Earlier this month annoyed shoppers slammed rising prices as the cost of a single tub of Lurpak now costs £7.25 in some supermarkets.
Households will see their yearly food shopping bills hiked by £380 this year due to the soaring price of groceries.
Now Arla, which owns Lurpak butter and Cravendale milk, said prices are set to rise more due to problems filling vacancies in the dairy industry.
The dairy giant said 80% of farmers looking for workers have had 'very few' or 'zero' decent applications this year.
Farmers also face paying higher costs of animal food, fertiliser and fuel, meaning dairy prices must rise.
The boss of Arla also told The Telegraph that dairy shortages are likely.
Arla Foods UK managing director Ash Amirahmadi said milk production in Britain has fallen 3% this year already, the first decrease since 2015.
It came as Arla Foods, the maker of Lurpak and Cravendale milk, said prices will continue to spike because of the rising cost of feed, fuel and fertiliser and continuing problems with recruitment.
He added: "If 3% gets to 5%, we know that will lead to shortages, in terms of [meaning] we can’t meet the demand that’s there."
Amirahmadi added that "there is more inflation to come" with dairy prices.
Households are continuing to be hit by high energy and fuel prices, new data shows, but the costs of other products, like pizza and quiche, rose more rapidly between April and May.
Potatoes had previously avoided some of the high inflation figures that other food items saw in recent months, however, in May they started catching up as the rate of inflation for potatoes more than doubled to 5.1%.
Shoppers are also increasingly swapping branded items for cheaper own-label products as they look to manage their budgets.
Asda’s chairman has said that some customers are setting £30 limits as they cut back on spending amid the cost of living crisis.
Lord Stuart Rose said customers are putting fewer items in their baskets and choosing from budget ranges more often as they try to mitigate price increases.
Sales of branded products fell by 1% in the 12 weeks to June 12, while own-label sales rose by 2.9% and value own-label lines surged by 12%.
Grocery analysts this month warned that supermarket costs could rise by 15% this summer and leave shoppers skipping meals.
The Institute of Grocery Distribution (IGD) said households are set to pay more for essentials including dairy, bread and meat as inflation is predicted to hit 11%.
It means the typical family of four could see their shopping bill rise as much as £40 per month, it warned.
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