End of Bacon Boom Sends Pork Prices Tumbling the Most in Three YearsBy
‘We’re in bust mode’: American Restaurant Association
Demand had surged this winter in counter-seasonal trend
The bacon boom seems to be ending.
Wholesale prices for pork bellies, the cut used for making bacon, plunged 14 percent on Wednesday, the biggest slump since August. The drop sent wholesale pork down the most in more than three years. Costs are tumbling as demand is easing for bacon after soaring this winter, a counter-seasonal move.
Normally, bacon demand heats up in summer, when Americans eat more BLT -- bacon, lettuce and tomato -- sandwiches. This year, consumers devoured the meat year-round as retailers pushed the product with deals and restaurants upped their use of rashers, adding it to everything from burgers to salads. At the same, McDonald’s Corp. made it a mainstay with its rollout of all-day breakfast. The increased demand more than doubled prices since August. It’s finally gotten so expensive that the high costs are stemming the tide of bacon indulgence, according to David Maloni, president at the American Restaurant Association.
“We’re in bust mode,” Maloni said by phone. “Anytime we get prices up at these levels, wholesale demand backs off, and that’s exactly what we’re seeing.”
Wholesale pork dropped 5.1 percent Wednesday to 80.24 cents a pound, the biggest one-day loss since October 2013, U.S. Department of Agriculture data show. Bellies fell to $1.5327 a pound, the lowest in almost a month. Hog futures on the Chicago Board of Trade posted a third straight decline on Thursday.
Prodigious pork production is forecast for the first two quarters of 2017, which will also weigh on belly prices, Maloni said.
Even with the drop, the bacon cut is still at a record high for this time of year. As of midday Thursday, prices for both bellies and wholesale pork rebounded a bit from the prior day’s plunge.
U.S. inventories for pork bellies saw a historic drawdown in government figures released last month, which led some to speculation over bacon shortages. This month’s stockpiles report will be released Thursday at 3 p.m. in Washington.