There Will Be No Bacon Shortage
How a British trade association press release sent the Internet into a senseless panic.
It all began, strangely enough, with a press release from an obscure foreign trade association. The National Pig Association of the United Kingdom, you see, wants British customers to feel OK about the idea of paying a higher retail price for pork products.
But the issue is CORN.
That’s because corn, for better or for worse, is one of the key commodity inputs of the modern economy. The corn you eat on the cob or in the occasional tortilla or slice of corn bread is just the tip of the corn iceberg. Corn is (unwisely) used to fuel vehicles, and it’s an element in a large share of the food we eat in the form of corn syrup and corn-based oils. What’s more, the meat that we eat is substantially made of corn—a key ingredient in the recipe for modern industrial-scale animal feed. So when drought hits and corn dies, it gets more expensive to feed animals.
This affects the price of meat in different ways, depending on timing. The feedlot operators who supply the vast majority of American beef buy year-old cattle and then fatten them for the slaughter. As fattening gets more expensive, the price they’re willing to pay for the yearlings declines, so the price of cattle in the futures market goes down, reducing breeders’ profits. In the short-term, drought and expensive feed lead to pre-emptive slaughter and an abundance of cheap meat. In the medium-term, however, this process leaves you with fewer animals to bring to the table.
Hence, the “bacon shortage”—actually a global increase in meat prices as a slightly delayed downstream consequence of the increase in corn prices.
So, for this year, the price of meat will go up (You can see it already at the supermarket!) but that doesn’t mean a shortage. It means higher prices. Just as with the hype about the shortage of helium, we are talking about other market forces at play, not that the stuff just isn’t there. And, don’t worry, bacon will be back. This is your chance to eat less meat. Be choosy.