There is a new federal reserve paper out at the above link. One of the more important things said is:
This Economic Letter shows that the recent U.S. experience is by no means unique. Household leverage in many industrial countries increased dramatically in the years prior to 2007. Countries with the largest increases in household leverage tended to experience the fastest rise in house prices over the same period. Moreover, these same countries tended to experience the most severe declines in consumption once house prices started falling. The common patterns observed across countries suggest that, as in the United States, the unwinding of excess household leverage via increased saving or increased default rates could be a significant drag on consumption and bank lending going forward, possibly muting the vigor of the economic recovery.
However, for dairy I think the recovery is here. The latest "Dairy Products" report shows, "Italian type cheese production totaled 363 million pounds, 6.5 percent above November 2008 and 0.6 percent above October 2009." More Italian type cheese is produced by far than Cheddar. Most is made and sold without extensive inventories. People have to be buying a lot of pizza.
Now all that is needed is to have a fair share going to dairy farmers.