Bad news for bacon lovers: Pork prices have jumped sharply over the past year, and it’s only going to get worse thanks to a virus killing off millions of American pigs. Could this be the end of America's overwhelming love for bacon?
The culprit is a virus known as porcine epidemic diarrhea, which has been seen in Europe and Asia since the 1970s, but appeared in America for the first time last year. Though the virus isn’t contagious to humans or other animals, it can lead to severe dehydration in pigs, especially babies. As a result, the disease has killed millions of pigs over the past year, leading to an estimated 7 percent drop in U.S. pork production this year.
PED has proven so disastrous for pork producers that pork prices have already shot up. Bacon, one of the most popular pork products, has suffered the consequences.
In February, a pound of bacon cost an average of $5.46, up 13 percent from February 2013, according to the Bureau of Labor Statistics. Other pork products like ham and pork chops have also increased, but bacon has been hit the hardest. That's bad news for fast food giants like McDonald’s (NYSE: MCD) and Wendy’s (NASDAQ: WEN) that have been stuffing their burgers with bacon of late.
While prices for bacon have increased over the past year, they haven’t hit the ceiling yet. PED is deadliest in the winter, and this year’s harsh winter hit a number of pork farms especially hard. Because PED effects mostly young pigs and it takes approximately six months to raise a pig to an appropriate age for slaughter, we’re still a few months away from seeing the true effects of this year’s harsh winter.
Steve Meyer, an Iowa pork consultant, estimated that pork products are likely to increase about 10 percent this summer. “We’re all used to: ‘We’ve got plenty of food, it’s cheap. We’ll eat what we want to,’” Meyer told the Associated Press. “We Americans are very spoiled by that, but this is one of those times that we’re going to find out that when one of these things hits, it costs us a lot of money.”
If pork prices do increase as much as Meyer believes, it won’t just be America's home consumer who cuts back on pork and bacon. Over the past few years, bacon has become a hot commodity in the restaurant industry. Fast food chains increasingly pile bacon on top of burgers, while more upscale restaurants experiment with different preparations of bacon, to wild success.
A National Restaurant Association survey found that a majority of American chefs believe artisanal bacon is a hot trend for 2014, while other bacon items like bacon jam and bacon desserts were also popular. Some restaurants have doubled down on the artisanal bacon trend and themed entire establishments around bacon. Manhattan’s BarBacon, for instance, offers flights of four different varieties of bacon, including applewood, pepper and jalapeno.
Judging by the rise of bacon-themed decadences like BarBacon and chocolate-covered bacon, Americans apparently can't stop pigging out on the fatty food, but will they be willing to pay increasingly high prices for their bacon luxuries? In part, it may depend on how pork producers handle PED.
Naturally, pork producers are taking the spread of PED seriously, but there’s little they can do at the moment. The disease has reached 27 states and continues to spread. Virginia, for instance, reported its first cases just this week. Once the disease hits livestock owners, it’s a difficult battle. Adult pigs infected with the virus are usually strong enough to fight through the symptoms, but younger pigs are at a much higher risk, leading to an intense hydration regimen. Oftentimes, baby pigs are simply euthanized to spare them a painful death.
Though some pork suppliers, like the giant Smithfield Foods Inc. (NYSE:SFD), have largely refused to comment on how PED will affect their products and prices, the National Pork Board is open about the threat PED poses to pork production, saying that the pork industry has pledged $1.7 million to find an effective vaccine for the virus. For now, though, there’s no effective cure for the disease, and things aren’t going to get better right away.