What do you say when all of your cheese has been shredded?

Q: What do you say when all of your cheese has been shredded?
A: Grate.

This is a pun. The reason why it is funny is because the word "grate" sounds exactly like "great".

Great is often used as an exclamation indicating that the speaker is happy.

Another way to say "to shred cheese" is to say "to grate cheese". It wouldn't really make sense to say grate after having shredded cheese, but if you really wanted your cheese shredded you might say "great" to indicate that you were happy that you had shredded the cheese.