Worldwide bacon shortage coming
Hog farmers are sending more of the herd to slaughter in the face of rising grain costs. That will lead to short supplies next year.
Pig farmers throughout the world are warning of a shortage of bacon and pork next year, the association says, because skyrocketing grain costs have made it too expensive to feed herds.
In the short term, bacon and pork prices may come down. That's because farmers, faced with mounting losses, are slaughtering animals at the fastest rate since 2009, Bloomberg reports. In the fourth quarter, farmers may receive about $151 for a 270-pound hog that cost about $195 to produce.
A little more than 73 million hogs were slaughtered through August this year -- the highest number in three years. All that extra pork on the market has sent wholesale pork prices tumbling.
But next year, it's estimated that the U.S. pork supply will drop to the lowest per capita since 1975. Countries around the world are preparing for hard times. The Chinese government is putting pork into cold storage in preparation for shortages next year, the National Pig Association reports.
Investors are betting on a pork price increase as well. Pork futures for December delivery are 75 cents a pound, but pork futures for July 2013 delivery are up to 97 cents a pound.
Agricultural experts say pork will still be cheaper than beef next year. "If you got sticker shock on pork, you'll have a heart attack when you look at beef," the CEO of Smithfield Foods (SFD) told analysts earlier this month, according to Bloomberg.
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