Bacon prices have skyrocketed and may not go down anytime soon

And yes, that explains inflation.

This craving for pork chops costs you about 7% more than it did 12 months ago. The average price for this slice of bacon, which accompanies the Sunday morning spread, has risen nearly 28% in the past 12 months, according to inflation-adjusted consumer price index data.

The supply chain problems and inflationary pressures that have become all too common in these pandemic times, along with a number of industry-specific influences, have certainly played their part in the pork price hikes. For its part, President Joe Biden’s administration believes prices are high because some large corporations control most of the market share and has outlined plans to level the playing field.

According to some analysts’ expectations, higher prices are not expected to ease anytime soon.

How we got here

The domestic pork supply chain was one of the fastest to be out of whack when the Covid-19 virus spread across the United States.

Panicked consumers bought freezers and cleared meat counters. The food service channel was effectively closed overnight and an important part of the supply chain was interrupted.

Meat packaging plants – in which employees worked long shifts in close proximity to one another – developed into virus breeding grounds. Lives were lost, facilities were temporarily closed, and a state investigation ensued.
When these facilities closed, animal residue grew, resulting in millions of pigs being euthanized without being processed into food. Additionally, producers who were ahead of demand with too much supply began to thin out their breeding herds – which ultimately squeezed this year’s pork supply, said Adam Speck, an economist at IHS Markit.

Pork production is expected to finish the year 2% below 2020 levels, he said.

It looks different when it comes to demand.

“Demand in the US has been exceptional and has moved more retail volumes than ever before,” Speck said in an email to CNN Business. “The combined effect of a tighter supply and an overall stronger demand for protein contributed to this inflation.”

Given the shortage of meat in cold stores late last year, the industry relied more on fresh animals, which in turn helped drive raw material prices soar, he said back to normal by June 2022.

“But don’t expect any quick price concessions in the next few months,” said Speck, “as retailers are usually slow to bring bacon prices back down.”

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

Not to mention global influences, especially the recurrence of African swine fever.
The disease, incurable and fatal for pigs, has spread across Asia in recent years and emerged in the Dominican Republic in July 2021. It is the first time in 40 years that the virus has been confirmed in the Western Hemisphere, according to the National Pork Producers Council
It is a double-edged sword for the US pork industry: the valuable export business could grow in markets like Vietnam; However, the continued spread of the virus and its greater proximity to the US have raised biosecurity concerns.
If a foreign animal disease invaded the United States, it would devastate the domestic pork industry, causing billions of dollars in losses and export markets, according to the NPPC.
Earlier this month, the Biden government tabled a tiered plan to tackle consolidation and anti-competitive practices in the meat industry that the government claims are causing inflation. Four firms control between 55% and 85% of the pork, beef and poultry market, National Economic Council economists wrote in a September 8 briefing.

The four largest pig processors now control 66% of the market – doubling their market share from 1976, according to the NEC.

“This consolidation gives these middlemen the power to put pressure on both consumers and farmers and ranchers,” they wrote.

Pork, beef and poultry saw the highest price hikes among other food products since December 2020 at 12.1%, 14% and 6.6%, respectively, they wrote.

In response, the Biden administration’s and US Department of Agriculture’s stated plans of action include antitrust enforcement; Investigations into price fixing; Providing $ 1.4 billion in pandemic aid to small-scale producers, farmers and workers; and investing $ 500 million to support new competitors.

Amid the high cost and ongoing volatility, some farmers, consumers, and pork dependent business owners simply have to sit back and eat it.

Miguel Escobedo, a chef who runs the Al Pastor Papi food truck in San Francisco.

“I’ve been in the restaurant business since the early 1980s and I’ve never seen anything like it,” says Chef Miguel Escobedo, who runs the Al Pastor Papi food truck in San Francisco.

Escobedo’s traveling restaurant specializes in Al Pastor – 24- to 48-hour marinated, sliced ​​pork shoulder that is hand-stacked in a cone-like shape and placed on a vertical skewer for roasting. Developed in Mexico City, the dish was inspired by the Lebanese kebab.

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

“Sometimes you saw the market fluctuate a bit. They planned budgets for the year and knew a lot [prices] would be higher, “he said.” But nothing like that. “

Escobedo has chosen to be flexible and offers different dishes like al pastor marinated prawns when prices or supplies are not achievable.

“At this point, all you have to do is adjust,” he said.

Dria White, 51, a resident of Emeryville, California, has cut her grocery purchases from twice a month to once a month so she can save enough money. She’s buying less bacon than before and often looking for the $ 5 protein on Fridays.

“It’s pretty much luck with anything you can find [the grocery store] that you can buy and get out the door at a reasonable price, ”White told CNN Business after a recent shopping trip to a grocery store in the Greater Bay Area. Just keep it real. When I eat, I’m sure to pay for what I want to eat. “

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