Sep. 27, 2012 at 9:57 AM ET
Don't worry, no one is coming for your BLT.
Even though headlines for the past couple of days screamed, “Bacon shortage!” (including one of our own) and social media blew up with jokes about the impending “porkocalypse,” it's all a lot of oinking over nothing.
The summer drought, and rising corn prices have hurt hog farmers for sure. Soy, a component of hog meal, is also costing more, driven by ravenous demand by China. But all that will only lead to bacon being temporarily more expensive, not an outright “shortage.”
“It's a challenging time because of drought for both consumers and producers and food costs will rise,” Cindy Cunningham of the National Pork Board told NBC News, but we're “not going to see people in line for bacon... there will be no bacon rationing.”
Let's look at some basic economics.
First, as long as prices are allowed to rise and fall freely, there can be no shortage. Shortages only occur when the government fixes prices and consumers want more supply than exists. That results in rationing. There's zero evidence to suggest the government would do that, or that there would be any “runs on the pork bank.”
“As long as prices roam free, there's never a shortage or a glut,” said Bob Brown, an independent meat market analyst in Edmond, Okla. “It will find a way to clear the market.”
The only sign of a pork shortage is a press release from Britain's National Pig Association proclaiming, “A world shortage of pork and bacon next year is now unavoidable.”
But let's put on our critical reading glasses. The rest of the notice points to declining sow herds in the EU and asks British supermarkets to pay higher prices to pig farmers. It asks for shoppers to only buy British-made pork to protect British farmers, identifiable by the “Red Tractor” symbol on the package as part of a “Save our Bacon” campaign.
"British supermarkets know they have to raise the price they pay Britain's pig farmers or risk empty spaces on their shelves next year," said NPA chairman Richard Longthorp in the press release. "But competition is so fierce in the high street at present, each is waiting for the other to move first."
Get it? This is an attempt by British pig producers to build grassroots support among British shoppers to apply pressure to supermarkets. Their tool for propping up prices is fear, wrapped in bacon, wrapped in the Union Jack. It's pork propaganda.
The release also warned that prices could rise as much as 10 percent. The USDA has forecast only a 2.5-3.5 percent increase.
So hold your horses, bacon lovers, there's no need to buy a deep freezer and fill it with all the bacon you can get your hands on. The green number on the LCD screen at checkout might be slightly higher than what you're used to, but there's no bacon crisis.
“Bacon prices in the next few months should be quite stable as there is a steady supply of pork going to market and in cold storage,” said Matt Swantek, Swine Field Specialist at Iowa State University.
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