ALL NEWS

Bacon prices have skyrocketed to record levels, and they might not go down anytime soon

Sep 29, 2021, 11:56 AM
An employee restocks shelves with pork in the meat section at a Kroger Co. supermarket in Louisvill...
An employee restocks shelves with pork in the meat section at a Kroger Co. supermarket in Louisville, Kentucky, U.S., on Tuesday, March 5, 2019. Kroger Co. is scheduled to release earnings figures on March 7. Photographer: Luke Sharrett/Bloomberg via Getty Images

   (CNN) — Bacon is more expensive for Americans than it has been in the past 40 years.

And yes, that is accounting for inflation.

That hankering for pork chops is costing you about 7% more than 12 months ago. The average price for that slab of bacon to accompany the Sunday morning spread has jumped nearly 28% during the past 12 months, inflation-adjusted Consumer Price Index data show.

The supply chain issues and inflationary pressures that have become all-too common in these pandemic times certainly have played theirs roles in the pork price hikes, alongside a slew of industry-specific influence. President Joe Biden’s administration, for its part, believes prices are high because a couple of large companies control the majority of market share, and has outlined plans to level the playing field.

By some analysts’ expectations, the higher prices aren’t expected to ease anytime soon.

How we got here

The domestic pork supply chain was one of quickest to get knocked out of whack when the Covid-19 virus started its spread in the US.

Panic-stricken consumers bought up deep freezers and cleared out meat counters. The food service channel effectively shut down overnight, breaking a major arm of the supply chain.

Meatpacking plants — where employees worked long shifts in close proximity to each other — emerged as virus hotbeds. Lives were lost, plants were temporarily shuttered and federal investigations ensued.

When those facilities shut down, the backlog of animals grew, resulting in millions of pigs being euthanized without processing into food. Additionally, producers, wary of getting ahead of demand with too much supply, started thinning their breeding herds — ultimately depressing this year’s pork supply, said Adam Speck, economist with IHS Markit.

Pork production is expected to close out the year 2% lower than 2020 levels, he said.

In terms of demand, it’s a different story.

“Demand has been exceptional in the US, moving more volumes at retail than ever before seen,” Speck said in an email to CNN Business. “The combined effect of tighter supplies and stronger demand for proteins overall have contributed to this inflation.”

With a lack of meat in cold storage late last year, the industry relied more on fresh animals, which in turn helped spike raw material prices, he said, adding it’s likely those costs have peaked and that the indications from the futures markets show prices should go back to normal by June 2022.

“But do not expect a rapid price concession the next few months,” Speck said, “as retailers are typically slow to bring bacon prices back down.”

Feed, freight and labor costs have also risen significantly, said Trey Malone, assistant professor and agricultural economist at Michigan State University.

And that’s not to mention the global influences, particularly the re-emergence of African Swine Fever.

The disease, incurable and deadly to pigs, has spread across Asia in recent years and cropped up in the Dominican Republic in July 2021. It’s the first time the virus has been confirmed in the Western Hemisphere in 40 years, according to the National Pork Producers Council

It represents a double-edged sword for the US pork industry: The valuable export business could increase in markets such as Vietnam; however, the continued spread of the virus and its greater proximity to the US have heightened biosecurity concerns.

If a foreign animal disease were to enter the United States, it would devastate the domestic pork industry and cause billions of dollars in losses and shutter export markets, according to the NPPC.

Earlier this month, the Biden Administration laid out a multi-tiered plan to combat consolidation and anti-competitive practices in the meat industry, which the administration alleges are creating the inflation. Four firms control between 55% to 85% of the market in pork, beef and poultry, National Economic Council economists wrote in a Sept. 8 briefing.

The top four hog-processing firms control 66% of the market now — a doubling of the market share from 1976, according to the NEC.

“That consolidation gives these middlemen the power to squeeze both consumers and farmers and ranchers,” they wrote.

Pork, beef and poultry have seen some of the highest price jumps among other food products since December 2020, climbing 12.1%, 14% and 6.6%, respectively, they wrote.

In response, the Biden Administration and the US Department of Agriculture’s stated plans of action include the enforcement of antitrust laws; investigations into price fixing; offering $1.4 billion in pandemic assistance to small producers, farmers and workers; and the investment of $500 million to support new competitive entrants.

Amidst the high costs and continued volatility, some farmers, consumers and pork-reliant business owners are having to just sit back and eat it.

“I’ve been in the restaurant business since the early ’80s, and I’ve never seen anything like it,” said chef Miguel Escobedo, who runs the Al Pastor Papi food truck in San Francisco.

Escobedo’s roving restaurant specializes in al pastor — 24-to-48-hour marinated sliced pork shoulder hand-stacked into a cone-like shape and placed on a vertical spit to be roasted. The dish, developed in Mexico City, was inspired by the Lebanese shawarma.

The 30 pounds of pork needed for the dish have doubled in price in recent months, he said.

“Sometimes you saw the market fluctuate some. You planned out budgets for the year and knew some [prices] would be higher,” he said. “But nothing like this.”

Escobedo has opted to be flexible — offering up different dishes such as al pastor-marinated shrimp, if prices or supplies are out of reach.

“At this point, you just have to adjust,” he said.

Dria White, 51, a resident of Emeryville, California, has scaled back her grocery shopping from twice-a-month to once-a-month so she could save up enough money. She’s buying less bacon than before and often seeking out the protein on $5 Fridays.

“It’s pretty much good luck with whatever you can find in [the grocery store] that you’re able to purchase and get out of the door with at a reasonable price,” White told CNN Business following a recent grocery store trip in the greater Bay Area. “Let’s just be honest, if I want to eat, I will. Lets just keep that real. If I’m going to eat, I’m most certainly going to pay for what I want to eat.”

The-CNN-Wire
™ & © 2021 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

Today’s Top Stories

All News

A brush fire started in Saratoga Springs last night. Photo Credit: Saratoga Springs Fire Department...
Devin Oldroyd

Fire officials say aerial firework caused brush fire in Saratoga Springs

An aerial firework caused a brush fire in Saratoga Springs Sunday night.
16 hours ago
Police in Highland Park, Illinois, respond to a shooting at a Fourth of July event....
Eric Levenson, Adrienne Broaddus, Shawn Nottingham and Brynn Gingras, CNN

Manhunt underway for gunman after mass shooting at July 4th parade in Highland Park, Illinois

HIGHLAND PARK, Illinois (CNN) — A mass shooting at an Independence Day parade Monday in a suburb outside Chicago, Illinois, left at least six people dead, wounded about two dozen others and has sparked an extensive manhunt for an unidentified gunman, authorities said. Firearm evidence was found on the rooftop of a business in Highland […]
16 hours ago
Photo credit: American Fork Police Department...
Devin Oldroyd

Silver alert activated in American Fork, missing possibly in Wendover

A silver alert has been activated for 71-year-old Gary Lee Cordon. Dial 801-794-3970 to contact the American Fork Police Department.
16 hours ago
FILE - Fireworks explode over Baltimore's Inner Harbor during the Ports America Chesapeake 4th of J...
BOBBY CAINA CALVAN ASSOCIATED PRESS

A turbulent US this July 4, but many see cause to celebrate

July 4 has arrived as many citizens struggle to find a reason to celebrate. Yet many also see cause for celebration, including President Joe Biden.
16 hours ago
The Deuel Creek Fire began late Sunday night in Centerville. Photo credit: John Wilson....
Devin Oldroyd

Deuel Creek Fire starts in Centerville overnight, evacuation order lifted

The Deuel Creek Fire began late Sunday night in Centerville.
16 hours ago
Tooele City announced its firework restrictions Sunday evening. Photo Credit: Tooele City's Faceboo...
Devin Oldroyd

Tooele City releases fireworks restrictions map

Tooele City announced its firework restrictions Sunday evening.
2 days ago

Sponsored Articles

Tax Harassment...
Jordan Wilcox

The best strategies for dealing with IRS tax harassment | You have options!

Learn how to deal with IRS tax harassment. This guide will teach you how to stop IRS phone calls and letters, and how to handle an IRS audit.
spend a day at Bear Lake...
Bear Lake Convention and Visitors Bureau

You’ll love spending the day at Bear Lake | How to spend a day at Bear Lake

Bear Lake is a place that needs to be experienced. Spend a day at Bear Lake.
Curb Appeal...
Price's Guaranteed Doors

How to have the best of both worlds for your house | Home security and curb appeal

Protect your home and improve its curb appeal with the latest security solutions like beautiful garage doors and increased security systems.
Prescription opioids can be disposed of during National Prescription Take Back Day...
Know Your Script

Prescription opioid misuse | How to protect your family from the opioid epidemic

Studies have shown that prescription opioid misuse has increased since COVID-19. So what do you need to know about these opioids?
national heart month...
Intermountain Healthcare

National Heart Month: 5 Lifestyle Changes to Make Today to Keep You Heart Healthy

Heart disease is the leading cause of death for both men and women. One person dies every 36 seconds in the United States from cardiovascular disease
Joseph Smith Memorial Building...
Temple Square

The Joseph Smith Memorial Building is an icon of Salt Lake City | Why hosting an event at this beautiful location will make you a hero this year

Here's why hosting an event at the iconic Joseph Smith Memorial Building in downtown Salt Lake City will make you a hero this year.
Bacon prices have skyrocketed to record levels, and they might not go down anytime soon