Bacon prices are a hot topic in this election. Here’s what you need to know
He blames greedy companies for raising prices. He blames the economic policies of the Biden administration.
Kamala Harris and Donald Trump agree on one thing: Tapping into sour consumer sentiment about high grocery prices is one way to court voters.
Bacon prices have been a major focus for Trump. He mentioned it in his Sept. 10 interview with Harris and a week later during an interview on NBC’s “Meet the Press.”
“Things are not going well right now for the consumer,” Trump said during the interview. “Bacon rises five times.”
Trump’s numbers aren’t perfect, but bacon has seen impressive price increases. According to government data, US bacon prices rose to $7.60 a pound in October 2022, up 30% from October 2019.
In September, bacon averaged $6.95 a pound, up 25% over the past five years. That equates to a 29% increase in food prices over that period, according to the Department of Labor. Still, September bacon prices were 1.8% lower than last year.
Bacon prices are constantly fluctuating. Among other things, they are subject to weather, animal diseases, food costs, seasonal demand and, according to Harris and other critics, other price increases by large food groups.
Bacon prices tend to rise in the summer when Americans love BLTs, for example. Presidential policies generally have little direct impact on the prices consumers pay for bacon or food in general.
The prices of not only bacon but food in general – and many other products – began to rise in 2021 as the economy recovered at an unexpected pace from the pandemic, which caused shortages and shortages of goods. The inflation worsened later after Russia invaded Ukraine. Food costs have skyrocketed all over the world, not just in the United States.
Although US inflation has slowed from a peak in mid-2022, food prices remain high. The impact of those price increases, however, was partially offset by comparable increases in average wages.
Here are some factors that have made it more expensive to bring home the bacon.
COVID-19 spread rapidly in meat processing
Workers stand together on production lines at a US meat processing plant. Major bacon producers such as Smithfield Foods and Tyson Foods temporarily closed plants in the spring of 2020 after thousands of workers became ill and some died. When the plants were closed, millions of hogs became too large to be processed and replaced, leading to shortages just as Americans at home were buying bacon for breakfast, said David Ortega, a professor of food economics at Michigan State University.
Demand from China is surging
China’s growing demand in 2020 has had the effect of reducing pork imports at home. US pork exports to China are set to jump 75 percent in 2020 as Beijing scrambles to replace pigs lost to African swine fever, according to the US Department of Agriculture.
During 2020, US bacon prices increased by 6%.
Meat processors faced higher costs
Meat companies have paid pandemic bonuses and invested in protective gear to get plants back up and running. Tyson Foods requires all of its 139,000 employees to get the COVID vaccinations.
By the end of 2021, Tyson said he had spent more than $800 million on bonuses, vaccination clinics and other measures related to COVID. It was also paying more for packaging and transportation in a supply chain that was tied up by COVID. To recoup those costs, the company raised prices for pork products by 25% in its 2021 fiscal year.
Labor costs became difficult
After risking their lives to continue working during this pandemic, many workers are demanding better pay and benefits. In June 2021, unionized workers at the Smithfield Foods pork plant in Sioux Falls, South Dakota, threatened to strike after contract negotiations broke down. The coronavirus killed four workers at the plant and infected nearly 1,300.
Smithfield Foods, a subsidiary of Chinese pork company WH Group, has finally agreed to a $520 wage increase and bonuses for its Sioux Falls workers. US bacon prices are up 24% through 2021.
Moscow’s war against Ukraine has raised prices
Russia’s invasion of Ukraine in February 2022 caused wheat and corn prices to rise. That made it more expensive to raise pigs. According to Iowa State University, the cost of feeding has increased by 24% between 2021 and 2022. In early 2022, Brazil’s JBS, another major US pork processor, said it was raising prices to meet higher animal feed costs.
Did corporate profits play a role?
Harris has proposed a ban on “price gouging” by food companies, saying some companies keep raising prices long after pandemic-related supply problems have disappeared in order to increase their profits.
There is no strict definition of “price gouging,” although it generally refers to sharp price increases imposed by companies after supply disruptions. The three largest bacon producers – Tyson, Hormel and JBS – reported record sales in 2022, when bacon prices reached a peak of $7.61 a pound.
Ultimately, those higher prices reduce demand. In the year ending October 1, 2022, US consumers bought 8% fewer packages of bacon than the year before, according to Nielsen. By the end of 2022, prices were falling.
Through 2022, US bacon prices are down 3.7% to $6.95 a pound.
Animal welfare legislation had an impact
In 2018, California voters approved legislation requiring more space to raise pigs, egg-laying chickens and veal calves. Producers in other states must meet those standards if they want to sell pork, eggs or beef in California. The pork industry was sued, backed by the Biden administration. But the US Supreme Court refused to change the law, which came into effect on July 1, 2023. Because not all pork producers meet the standards, less bacon is available to Californians, thus raising prices.
Daniel Sumner, professor of research and agricultural economics at the University of California, Davis, estimates that prices for pork products will be 7% to 10% higher in California in the long term because of the law.
Elections raise uncertainty
Joe Glauber, a senior researcher at the International Food Policy Research Institute and a former USDA economist, said rising food prices have been a global problem for the past few years, not one created by the Biden administration. Past increases in food prices, he said, happened regardless of which party was in power.
One wild card this time around is Trump’s promise to impose a 20% tariff on all US goods. Chad Hart, an agricultural economist at Iowa State University, noted that the US typically exports between 20% and 25% of its pork, and other countries may retaliate by imposing tariffs on US pork. If that happens, more pork could end up in the US, which would drive down bacon prices. However, the price of many other imported products will increase.
“If you want a BLT, the bacon might be a little cheaper, but the lettuce and tomato will cost about the same,” Hart said.
Harris has criticized Trump’s proposed tariffs, although he has supported tariffs on Chinese imports.
Harris has vowed to crack down on unfair mergers that give big food companies enormous pricing power. He also said he would investigate and prosecute price-fixing, an ongoing issue in the highly integrated meat industry. McDonald’s recently sued four major beef companies, including Tyson and JBS, accusing them of price fixing.
-Dee-Ann Durbin, Associated Press business writer
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