Enjoy your bacon now because pork prices likely to rise
Bacon lovers should savor buying the salty meat at a reasonable price while they can.
Experts say that in a year's time there will be less pork available, which will mean significantly higher prices at the supermarket.
Drought conditions this summer have driven up the cost of corn, a main source of feed for hogs. Farmers have been sending more animals to slaughter including breeding sows to reduce their herds and cut costs.
So at the moment, there is an oversupply of pork.
"Prices will remain stable and might even come down" this year, said Andy Dietrick, director of public relations for Indiana Farm Bureau. But by this time next year, when farmers are no longer sending as many animals to slaughter, less pork will be available.
"As we get into next year and supply is low, demand remains steady and prices will go up," he said.
Farmer Greg Gunthorp of LaGrange, Ind., known for the heritage-breed pork he supplies to restaurants and specialty retailers, said he is not reducing his herd but expects consumers will see higher prices and "significantly less pork" by the end of next year.
"There's just not going to be enough pigs," Gunthorp said.
Although consumers will face higher bacon prices probably 5 percent to 7 percent higher by the second half of next year they will continue to buy it if the past is any indicator, said Chris Hurt, Purdue Extension agricultural economist.
"People say, 'I don't care. So what if it's $5 a pound. I want bacon with my eggs,' " Hurt said. "The demand stays about the same."
It's the farmers who will really take a hit. The pork industry is facing "a tsunami of red ink," Hurt said.
As more hogs are sent to slaughter, the price per head comes down. Feed prices continue to go up because less corn is available as a result of the drought and the production of ethanol.
According to Hurt, farmers could lose nearly $60 per head through the end of the year, even more than the $45-a-head losses that producers faced in the "pork price disaster" in late 1998.
"It's a very difficult time for farmers," Dietrick said. "Your only option is to lose money per head and figure out how long you can do that and remain viable. Or thin the herd, lower your feed costs and hope you can hang on."
The pork industry should begin to rebound by next spring as prices go up, experts say. However, it will take a year for herds to increase through breeding.
"The losses are going to be intense and large but of fairly short duration," Hurt said. "It's finding a way to get through it."