The latest economic bogey man is starting to show its face to the dairy industry.

Its “Dollar Menu” under assault by rising costs, McDonald’s announced it’s exploring ways to make its popular double cheeseburger less expensive to make, reported today in The Wall Street Journal. Among the options under consideration are selling the sandwich with one slice of cheese instead of two or as a double burger without cheese. Other foodservice operators are undoubtedly mulling similar ideas to various menu items that include cheese and other dairy products.

Meanwhile, there are reports that other foodservice providers with a stronger “green” bent – like those serving museums, schools and hospitals – are looking at ways to reduce or eliminate beef and dairy products from their menus because of those foods’ alleged expansive “carbon footprint.”

This undoubtedly is going to impact the dairy industry, most immediately manufacturers of processed cheese and suppliers of barrel cheese to those companies. I recently spoke with folks at a prominent barrel cheese manufacturer who said they expect foodservice portions of cheese to shrink in the current economy. But they expressed confidence that increases in private label purchases at retail would grow that end of their business and buoy overall sales. This company employs some aggressive sustainability efforts, which its sales force should be trumpeting lest its cheese business be further greened away.

It’s a double whammy, my friends, that makes it more important than ever to minimize costs to your customers. The dominoes are falling, one by one. Don’t let your guard down. – J.D.