Bacon lovers in the U.S. are feeling the results of herd reduction and market decreases. Wholesale pork bellies are up 72 percent in the past year to $1.43 a pound, the highest price since at least 1998. Warehouse stockpiles, monitored by the Chicago Mercantile Exchange, tumbled 73 percent in the last year.
Prices usually climb in August, when tomatoes are ready for harvest in the Midwest and more people eat bacon, lettuce and tomato sandwiches, said Altin Kalo, a commodity analyst for Steiner Consulting Group. While pork bellies will probably fall later this year as demand slows, the costs will be records for each month through year-end because of tight supplies, he said.
“What you have with bacon is what economists call inelastic demand, meaning it doesn’t vary much,” said Chris Hurt, a livestock economist at Purdue University in West Lafayette, Indiana. “If a person wants a BLT sandwich and likes that in summer when their patio tomatoes come on, then it doesn’t make a difference if bacon is $2 a pound or $6 a pound. They’re going to go out and buy it. When it’s in short supply and a lot of people want it, they’ll pay a higher price.”