Amid reports of an impending bacon shortage, a Texas A&M AgriLife economist urges a wait-and-see approach.
Bloomberg and other news outlets reported in October that an African swine fever outbreak in China that wiped out more than half the country’s hogs would mean that China continues to up its pork imports in 2020 — and could lead to a U.S. shortage of bacon and other cuts of meat.
AgriLife Extension economist David Anderson said Monday that “some contradictory production and economic factors are at play” in the market, and that it’s too soon to know what to expect. He described a “current versus maybe” situation in which current U.S. pork supplies are robust and prices are low, with potential for high prices and lower supplies next year.
“The current reality is that we’ve got a lot of pork,” Anderson said. “We could export China a huge amount of pork, and that would cause our prices to go up, and pork supplies could tighten — but that’s a pretty big ‘if.’ ”
Anderson said pork production in the U.S. is at a record high.
According to a release from the animal science department at Texas A&M, cold storage stocks of pork bellies are the highest on record dating to 1973. The U.S. Department of Agriculture reported that pork bellies in cold storage were up about 34% from last year, reaching 40.6 million pounds — up from 30.4 million pounds in 2018.
“The Chinese eat a lot of pork. As they’ve lost these hogs and as supplies have tightened, prices have skyrocketed for pork in China,” Anderson said. “So the current reality is that we have no tight supplies for U.S. consumers, but there is potential out there for us to see higher prices. It’s a ‘maybe,’ though.”
Anderson said that U.S. pork has been competitive in China despite the 62% tariff placed on it. He added that in a market economy such as the United States’, shortages often get worked out via higher prices.
“It becomes a shortage for us consumers because we don’t want to pay that higher price, and that’s what rations the product. So far, we don’t have that going on,” Anderson said. “Nothing gets people more excited than a bacon shortage.”
The National Pork Board reported U.S. consumption of bacon increased 2.4% from 2001-2013, with Americans consuming about 1.1 billion servings of bacon annually.
“Bacon is an area of growing demand domestically,” Anderson said. “We put bacon on everything now, which is a fairly recent development.”
Anderson said he expects more growth in U.S. pork exports to China.
“We’ll just have to wait and see if export growth is larger than production growth and cuts into domestic supplies — and causes prices to rise here,” he said.