Melt the butter in a medium saucepan over medium-high heat.
Wisk in the flour and cook for about 1 minute. The flour-butter mixture will be bubbling. When the flour is blended in completely then you know you are ready for the next step.
Slowly whisk in the milk. Whisk the white pepper, onion powder, garlic powder, and nutmeg.
Lower the temperature to medium-low heat and whisk in the extra-sharp cheddar cheese.
Turn off your heat and serve.