Extreme heat is straining the vaults that hold Parmigiano wheels as loan collateral, and economists say the damage runs wider than the vault.

In the hills of Emilia-Romagna, a bank vault holds more than half a million wheels of Parmigiano Reggiano, worth well over 300 million euros.

The vault belongs to the bank Credito Emiliano, known colloquially as Credem, which has long accepted young wheels of Parmigiano Reggiano as collateral for loans to local dairy farms since 1953.

But now, extreme heat is threatening Italy’s “cheese banks,” and economists who study heat’s effect on growth say the exposure runs well beyond a single vault but into the country’s vineyards, its olive groves, and its broader economy. A blockchain-backed cheese loan collateral program

After receiving the wheels of cheese from dairy farmers, a Credem subsidiary, Magazzini Generali delle Tagliate, ages the wheels in two warehouses in Reggio Emilia and Modena. Producers typically receive 60% to 80% of a wheel’s value upfront.

But the process has come a long way from the 1950s, as blockchain technology now lets farmers pledge wheels even while the cheese stays in their own facilities, doubling Credem’s lending capacity. The arrangement solves a real problem: Parmigiano needs at least 12 months to age, often 24 or 36, and small family farms can’t easily keep that much inventory tied up for that long without generating some cash. So the bank provides some before any sales are made.

The scale of that arrangement is bigger than the vault itself. Italy produces about 4 million wheels of Parmigiano Reggiano a year, and the cheese banks hold about 500,000 of them, Giancarlo Ravanetti, who runs the bank’s cheese warehouse business, told CNN. His warehouses handle about 2.3 million wheels a year in total.

Meanwhile, Parmigiano Reggiano is a 4 billion-euro ($4.7 billion) industry sustained by roughly 300 certified dairies, and keeping that much cheese at the right temperature has gotten more expensive. Thanks to this year’s record heat waves in Europe, daily energy consumption rose about 30%, forcing the bank to upgrade cooling systems and boilers, add insulation, and expand renewable power generation.

Climate change is affecting dairy farmers’ milk supply as well. Because it’s so hot outside, cows lie down more and eat less, reducing milk production by up to 10% a year. As longer and more intense heat events become all the more common, they hit both the quantity and quality of milk, ultimately driving up costs.