Bringing home Less Bacon Leads to, Well, Less Bacon
It is a cold hard fact: As long as the sun rises, prices will follow suit and the only thing that seems to stay the same is our paychecks.
Americans must dig deeper and deeper for housing costs, heating and electrical costs, clothing and travel costs. There are additional costs passed on to the average consumer for increased costs in manufacturing or distribution certain goods and services.
In agriculture and raising of livestock for food, the wild-card in pricing is often Acts of God. Too much rain, the lack of rain, early frost, late arrival of warm weather and devastating storms all play havoc in determining the price of farm goods.
But, there is something just plain insulting about the rising costs of certain products: 5 cent more for a gallon of gas seems personal, 10 cents more for a carton of milk seems Un-American, but more money for bacon should call for a National Day of Outrage.
We can only be pushed so far.
Fears about a scarcity of bacon swept across social and mainstream media last week after a trade group in Europe said a bacon shortage was "unavoidable," citing a sharp decline in the continent's pig herd and drought-inflated feed costs. The report brought back memories of Cadillacs, Pintos and Buicks lined up by the hundreds hoping to buy a few gallons of gas in the 1970s, but this shortage was quickly put to rest by the American Farm Bureau Federation.
"Pork supplies will decrease slightly as we go into 2013," Farm Bureau economist John Anderson said. "But the idea that there'll be widespread shortages, that we'll run out of pork, that's really overblown."
The stubborn drought in the U.S., the world's biggest supplier of feed grains, undeniably will affect pig production. The Corn Belt's lack of moisture twice has prompted the U.S. Agriculture Department to slash its forecast for this year's corn output. The government now expects U.S. production of the grain to amount to 10.8 billion bushels, the least since 2006.
Those lowered expectations sent prices of corn - also used in ethanol, further squeezing supply - to record highs through much of the summer. Feed generally makes up about 60 percent of the expense of raising a pig. Rather than absorb the higher costs, swine and beef producers often have culled their animals by sending them to slaughter.
Pig producer Phil Borgic is banking on high prices. With 3,400 sows near Nokomis in central Illinois, Borgic figures he's had to spend $2 million more this year for the 600,000 bushels of corn he feeds his pigs. Rather than sell off animals on the spot market, the 56-year-old farmer is hedging his bets by contracting them out for slaughter over a staggered period in coming months - what he sees only as a break-even proposition.
"The previous couple of years have been good to us," he said. "Then the drought changed the ballgame on a worldwide level."Mr. Borgic continued to say that "the U.S. has plenty of pork, and we won't run out here," "We'll have some price inflation, but we have plenty of supply."
The only thing worse than an increase in bacon prices would be if beer prices increased.
If this were to occur, Canada here I come.