Essentially, you grate cheese, add an emulsifier, heat it up to release the oils and then cool it down again. The fat in the cheese breaks down due to the high heat and the oils get emulsified so it doesn't "break" -- a bit like making mayonnaise. The original patents for this are from the late 60's early 70's, so if you look around you can find out the exact industrial process (I've read a couple, but I'm a bit too lazy to look them up at the moment -- they are surprisingly clear... I wonder if patents back then where better than they are now...)
Edit: Just for those that believe that processed cheese is not cheese: Quite a lot of processed cheese and processed cheese spread contains a high percentage of "milk solids" or "milk protein". This is essentially cheese. They buy it in bulk, mostly from Ireland. The reason that they can't call it cheese is because they are avoiding tax/duty on the imported cheese curds.
Essentially, you grate cheese, add an emulsifier, heat it up to release the oils and then cool it down again. The fat in the cheese breaks down due to the high heat and the oils get emulsified so it doesn't "break" -- a bit like making mayonnaise. The original patents for this are from the late 60's early 70's, so if you look around you can find out the exact industrial process (I've read a couple, but I'm a bit too lazy to look them up at the moment -- they are surprisingly clear... I wonder if patents back then where better than they are now...)
Edit: Just for those that believe that processed cheese is not cheese: Quite a lot of processed cheese and processed cheese spread contains a high percentage of "milk solids" or "milk protein". This is essentially cheese. They buy it in bulk, mostly from Ireland. The reason that they can't call it cheese is because they are avoiding tax/duty on the imported cheese curds.