The Price of Bacon Is at an All-Time High—Here's Why
Inflation typically accounts for the changes in prices you notice on your favorite foods at the grocery store, but some items are reaching new heights in terms of price, and bacon is at the top of the list. According to CNN, the cost of the savory meat increased 28 percent in the last 12 months alone, per inflation-adjusted Consumer Price Index data. As for why the prices jumped so high? It's due to supply chain problems and inflation since the start of the pandemic and company leaders in the industry controlling market share.
The COVID-19 outbreak caused many consumers to stock up on this breakfast favorite, effectively emptying butcher shops and meat departments in grocery stores, which caused major issues in the supply chain of the food service market. As the pandemic continued, many meatpacking companies shut down. As a result, many animals were euthanized after being backlogged when the meat companies closed. Famers then started decreasing their herds to avoid having too much meat supply, thus cutting the amount of pork on the market this year: Adam Speck, economist with IHS Markit, noted a two-percent decrease in the amount of pork production after 2020.
While there's less available for consumers, the desire for bacon hasn't slowed down at all. "Demand has been exceptional in the US, moving more volumes at retail than ever before seen," Speck explained in an email to CNN Business. "The combined effect of tighter supplies and stronger demand for proteins overall have contributed to this inflation." He does foresee prices leveling out by June 2022. "But do not expect a rapid price concession the next few months," Speck added, "as retailers are typically slow to bring bacon prices back down."
Pork, beef, and poultry products have seen some of the biggest price spikes since December 2020, increasing by 12.1 percent, 14 percent, and 6.6 percent, respectively, National Economic Council economists wrote in a September briefing. As a result, the Biden Administration and the United States Department of Agriculture noted plans to enforce antitrust laws, price fixing investigations, and $1.4 billion in aid for small producers, farmers, and workers as a result of the pandemic, and the investment of $500 million to support new businesses. However, in the meantime, long-time business owners are facing the challenge of adjusting to the times. "I've been in the restaurant business since the early '80s, and I've never seen anything like it," said chef Miguel Escobedo, the owner of the Al Pastor Papi food truck in San Francisco, California. "Sometimes you saw the market fluctuate some. You planned out budgets for the year and knew some [prices] would be higher," he said. "But nothing like this; at this point, you just have to adjust."