DES MOINES, Iowa –An insatiable demand for bacon depleted frozen pork belly supplies in the U.S. to a record low level for December, but the pork industry is confident it can keep up with demand and avoid any serious shortages.
Bottom line: A pound of it may cost a little more as winter wears on, but prices should stabilize by summer.
The U.S. Department of Agriculture reported last week that pork bellies in cold storage fell to 17.7 million pounds last month, the lowest December inventory since records began in 1957. In comparison, more than 52.3 million pounds of pork bellies –the cut of the hog from which bacon is derived –remained in storage in December 2015.
“Veterans of the industry say clearly this is record-breaking stuff,” said Russell Barton, a market reporter for protein analyst firm Urner Barry. “December is the lowest on record. They really haven’t ever seen a situation like this before.”
Pork bellies are usually stockpiled in freezers at the end of the year and the first few months of the next year to get through the summer peak months when bacon consumption is highest, Barton said. This season, bacon demand was high enough that fresh pork bellies were used as quickly as they were produced, leaving significantly less meat to store.
Prices at the wholesale level already are showing an increase. Tuesday’s pork belly prices were at $1.71 a pound, about 37 per cent higher than this time last year, Barton said. Retail bacon prices haven’t jumped significantly but could climb as the industry works to catch up.
“What this says is there was excellent product movement in the fourth quarter of 2016,” said Steve Meyer, a pork industry economist for Express Markets Inc., which tracks industry trends for retailers and foodservice companies.
Meyer isn’t concerned about the short-term stockpile shortage because he expects pork production to increase about 3 per cent this year.
The popularity of bacon has increased as the pork industry has figured out new ways to sell the product. To keep pace with increased pork demand, the industry is building at least four new processing plants in Iowa, Minnesota, Missouri and Michigan in the next few years.
The variety of bacon treats has soared in recent years to include delicacies such as jalapeno bacon, bacon apple pie, doughnuts with bacon and chocolate chocolate-covered slices, said Brooks Reynolds, an Iowa commercial insurance agent who created the Blue Ribbon Bacon Festival, which attracts more than 10,000 bacon enthusiasts to Des Moines on Feb. 18.
“People will pay what it costs to buy bacon because they love it,” he said.
Demand also has increased as bacon has become an ingredient in menu options at restaurants including Subway and Bruegger’s Bagels, and as McDonald’s started selling breakfast all day.