No credit flow? Italians use parmesan cheese as hedge against the recession!

August 26, 1:36 AMItalian Living ExaminerSerenella Leoni

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A financial crisis?  A great recession?  No worries: Parmesan cheese is being stored in Credito Emiliano’s climate-controlled warehouse as collateral for loans. The regional bank’s actions use Parmesan to continue to finance cheese makers around Parma (the Parmigiano-producing area) in Italy during the worst recession since World War II. The program allows Parmesan producers to pump cash into their business by using their product as collateral while it is otherwise sitting on a shelf for the long aging process.

It is difficult to convey how important Parmigiano (Parmesan cheese) is to the Italian economy and psyche.  Suffice it to say that Parmigiano is the 3rd most stolen item in Italian supermarkets, after razor blades and ink cartridges. The love for Parmesan cheese is a passion that is spreading to many other countries, including the U.S. (witness the “king of cheese’s” ubiquitous presence in Italian recipes and restaurants).  Parmesan is used in many food preparations, from appetizers to pasta to fillings and, once in a while, even in desserts!

The piracy of copycat parmesan look-alikes is a growing international problem. Real Parmesan wheels are eminently traceable since each form is stamped with the month and location where it was produced and with the official Parmesan imprint after 12 months of aging.

To be honest, this is not a new concept.  Banks in the Emilia-Romagna region have been using Parmesan cheese as collateral since after World War II.  This year, they have simply augmented their stockpiles.

So this precious food product, that has never dropped in value even during financial crises, is stacked row upon row in 85 pound wheel-shaped pieces stacked 33 feet high for as long as 30 months as a hedge against the expected future devaluation of other assets and defaults in the bank’s portfolio.  What is the total value of the stored amount?  About €120,000,000 (approximately $ 171,637,556).

The secure warehouses have vaults that maintain the temperature at between 18 and 20 degrees Celsius (64-68 degrees Fahrenheit) and humidity at over 90 percent.  Machines rotate and clean the forms while employees, trained in the centuries-old tradition of Parmesan-making, care for the cheese.

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