Is there bacon in your future?
As feed costs increase, pork production will decrease. Bacon and other pork products will still be available but at a higher price.
Bacon has become a popular addition to many dishes. There is even bacon ice cream available for bacon-lovers to enjoy and others to try. A recent report from farminguk.com quoted Britain’s National Pig Association saying, “a world shortage of pork and bacon next year is now unavoidable.” This caused many to take notice and worry about the availability of bacon in the upcoming year.
The Daily Livestock Report has responded to the British report on “bacon shortage”. They appropriately pointed out that what is referred to as bacon in Europe is different than American bacon. European bacon has a portion of the loin muscle attached to pork from the side and belly. American bacon comes solely from the belly. Thus, a shortage of bacon in the UK is more accurately a shortage of pork.
Already tight corn supplies are becoming exacerbated by this summer’s drought throughout the majority of the U.S. Corn Belt. The increase in feed costs will cause a decrease in pork production world-wide as producers try to minimize financial losses by cutting back on production. Reports of decreased pork production in the UK are also surfacing, with some countries such as Italy indicating a 13 percent reduction in production. Another factor contributing to the decrease in production in parts of Europe has been the mandatory move of gestating sows from stalls to pens by 2013. Some producers have opted to exit production instead of incurring the additional cost of remodeling production facilities.
To what extent, if any, there will be a bacon shortage in the U.S. is less clear. Pork consumption has decreased in the past 5 years, from 50.8 lbs. in 2007 to a projected 46.0 lbs. in 2012. Production has decreased as well during that time frame but far less. So we appear to be meeting demand. In the past month, efforts by U.S. farmers to cut losses include moving marketing’s forward, and this has led to recent near-record hog slaughter at lighter weights. This has resulted in record amounts of pork products in cold storage, 580.8 million pounds for August 2012, which is a 31.1 percent increase above previous year reports according to USDA. This is mostly made up of hams (30 percent) and loins (44 percent) having the largest increases in stocks. Bellies, used to make bacon, are actually down 9 percent in cold storage inventory compared to a year ago.
Record retail meat and pork prices are expected in the upcoming year. Most experts believe the drought of 2012 will have a short-term impact on pork prices, but not pork availability. Bacon and other pork products will still be in grocery stores and meat markets. With a normal cropping year in 2013, the amount of pork produced in the U.S. will meet demand and the cost of pork should come back down to normal soon.