Cheese - You Can Bank On It!

The economy has been on everyone's minds for a long while now, and far be it from me to ignore such a trend. In Italy, the Parmigiano-Reggiano makers have a creative way of raising money for general operating expenses on their diaries and other production expenses. They use aging rounds of their national treasure as collateral for bank loans! According to MSNBC, a wheel of this hard salty goodness is worth up to 300 euros, and a cheesemaker might put up as many as 2,000 of the 7,000 wheels they make each year (600,000 euros), and the bank would give them a cash loan for 60-70% of the value (420,000 euros). Not a bad deal, especially in difficult economic times. When the loan is due to expire (when the cheese is fully aged and ready for sale), the cheesemaker can either repay the loan, or allow the bank to sell the cheese at market prices. Considering the two year delay, a lot can happen to the price of cheese (commodity prices being what they are), and the 30-40% taken by the bank doesn't seem that high when you consider the risk they are taking (though I think it still seems a bit high). The BBC report says there is only 3% interest + a fee, which seems much more reasonable. I guess we'll have to travel to Italy and check it out for ourselves to clarify!

This isn't a new financial arrangement. Apparently, the Italians have been doing this since right after WWII. It's extremely organized, and banks even have in-house cheese watchers to take care of the collateralized wheels of cheese in environmentally controlled vaults especially built for cheese aging. They even check the wheels during the aging process to ensure that they are properly developing (they aren't worth as much if they have air holes in them).

Cheese deposits are up 10% during the current recession. Yet another indicator to watch as we look for signs of light at the end of the financial tunnel. In the meantime, grate a little Parmesean on your pasta and don't panic! There's more where that came from, and its tucked up safely in a bank vault.