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US Agricultural Economists Say Bacon Shortage Is Hogwash 137

Posted by samzenpus from the hold-on-tight dept.
PolygamousRanchKid writes "The economics of the current drought are likely to nose up prices for bacon and other pork products next year, by as much as 10 percent. But U.S. agricultural economists are dismissing reports of a global bacon shortage that lent sizzle to headlines and Twitter feeds last week. Simply put, the talk of scarcity is hogwash. 'Use of the word 'shortage' caused visions of (1970s-style) gasoline lines in a lot of people's heads, and that's not the case,' said Steve Meyer, president of Iowa-based Paragon Economics and a consultant to the National Pork Producers Council and National Pork Board. 'If the definition of shortage is that you can't find it on the shelves, then no, the concern is not valid. If the concern is higher cost for it, then yes.'"
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US Agricultural Economists Say Bacon Shortage Is Hogwash More

US Agricultural Economists Say Bacon Shortage Is Hogwash

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  • Yea verily, we may have escaped the terrifying "bacon shortage" foretold by our farmer-sages but as a ones-and-zeros smith, I will reveal a much scarier future that is imminent and knocking at our door: a ones and zeros shortage. Yes, that's right, you heard me, Earth has reached its quota of ones and zeros. As our localized reserves of information go up, elsewhere in the universe entropy must be accounted for in order to preserve the Second Law of Thermodynamics. We have all but destroyed Alpha Centuri with viscous randomness as we greedily ate up our own terrestrial order and logic. Physics has heard of our blasphemy and she is vengeful!

    What can you do? Well, as a developer who can write in many languages including C, I will be able to squeeze much more usage out of your precious ones and zeros than, say, my Indian counterparts. Oh, sure, now software is cheap but the demand is imminent and workers like myself will be harder to find than a two on your hard drive. Knowing that violent unrest will break out when people can no longer access their Farmvilles and pornography, I offer my services at a meager rate so nigh our hour of darkness. Friends, readers, Romneys, rich and potential employers -- I am not asking for much to protect your software as a ones and zeros guardian ... a hair below the capital gains rate will feed me peanuts and allow me to upgrade my housing from pizza boxes to refrigerator boxes.

    Thou hath wrought the wrath of thine swine overlords and thou hath felt its mighty cloven hoof. Now I am simply asking you that, in your cellars where you have squirreled pound upon pound of bacon inside deep freeze upon deep freeze inside freight container upon freight container, you employ me and house me to ensure all your computing needs are safe and secure among thine horded cured brine meats.

    I urge you, take this offer now before the coming very real and very well explained (see above) shortage renders my colleagues and I safe inside massive corporations and extremely financially secured without need for employ.

  • Nothing to see here (Score:4, Informative)

    by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Monday October 01, 2012 @08:51AM (#41512665) Homepage Journal

    The concern is increased prices, it has never been that you won't be able to get bacon but that you will have to pay twice as much for it.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Well with the hype about this, politicians are sure to step in and "solve" this problem. Price controls and agricultural policy meddling will bring about shortages.

      • Re:Nothing to see here (Score:4, Funny)

        by Anonymous Coward on Monday October 01, 2012 @09:06AM (#41512823)
        speaking as a card-carrying Republican, I would suggest that perhaps not everyone DESERVES bacon. I see no reason we should provide bacon to people that don't work for it. I'm sick and tired of going to the store to buy bacon, and on the way home I see people carrying bacon down the street that they were given for free. It makes my bacon that much less valuable. If the price of bacon doubles tomorrow, that just means the freeloaders are getting a more valuable handout.

    • Re: (Score:2)

      by stevew ( 4845 )

      Yes it was - but it was all a rumor put out by the New York Mayor's office. This is the next thing Bloomberg is planning on banning from entering New York City. So he figured he get ahead of the curve and justify his ban on the fact that there was ALREADY a shortage!

    • The concern is increased prices, it has never been that you won't be able to get bacon but that you will have to pay twice as much for it.

      It's good ole supply and demand. Raise prices, reduce demand. It's how we are currently dealing with peak oil. People don't realize but for the first time in decades demand for gasoline in the US is actually down. Five years ago the US was pushing Saudi Arabia to pump more to control prices. When's the last time you heard demands for more pumping? It's the same with demands on pork. As prices go up consumption will simply go down until it reaches a balance. The real problem isn't pork it's all grain fed mea

      • People don't realize but for the first time in decades demand for gasoline in the US is actually down

        A lot of this has to do with the price of natural gas. We have also improved fleet efficiency, increased the ethanol percentage in fuel, oh... and we decimated our economy. :)

        But seriously, the natural gas phenomenon is so strong that US carbon emissions are even down 20% off of their peak.

    • If price didn't increase, you wouldn't be able to get bacon... Either this, or rise in price means there will be (more) taxes on bacon.

    • That's not a shortage - that's just market forces. And the cost of a given product has to rise in order to maintain the profit involved in creating said product. If people can't make money doing it, they won't do it. Then we'd have a shortage.

      Bacon bacon bacon! We're making the moves on you! You're bacon!

    • Costco in our area has raised Bacon prices 40-50%. I'll have to see what the regular stores, Vons, Ralphs, etc are doing price-wise... as 40-50 is a damned far-cry from 10. If it's not due to the so-called shortage, then they are just pulling something similar to their Coffee-commodity-hike:

      2 Years ago:
      Coffee 32oz: $7.99 ---- 25c/oz
      Today:
      Coffee 40oz: $16.39 -- 40c/oz :: 60% increase.

  • This isn't made up at all, there is a pork shortage, as in much less pork available now then at the same time last year.

    • Re: (Score:3)

      by vlm ( 69642 )

      This isn't made up at all, there is a pork shortage, as in much less pork available now then at the same time last year.

      The point is that in the USA we'll just pay more, but in China I would expect a complete absence of Pork Fried Rice or whatever. Also no Pork Carnitas being served south of the border.

      Kind of like a rice shortage means people will starve, its just starvation won't be in the USDA's territory...

    • Less pork available later. There's more pork now as the market is about to be flooded with cheaper pork before corn prices get too high.

  • Government Economists (Score:3)

    by tmosley ( 996283 ) on Monday October 01, 2012 @08:55AM (#41512709)
    Don't know the difference between shortage and rationing as a result of price controls.

    No wonder we are so totally fucked in all things economic.

    • Re:Government Economists (Score:4)

      by dkleinsc ( 563838 ) on Monday October 01, 2012 @09:59AM (#41513385) Homepage

      A shortage is a situation where the demand for a product at a particular price is higher than the supply of that product. Basic capitalism responds to that by raising the price of the product until demand matches supply (this goes back to at least Adam Smith, possibly earlier). Hence the price of the product reflects, in part, the scarcity of that product.

      And in the case of bacon (or other forms of pig meat), there are plenty of substitute goods, so what will happen is that people who are willing and able to pay the higher price for it will get it, and those that aren't won't get it. It's that simple. And longer term, because the prices are higher some people who would have done other businesses will focus on producing hogs because that's where the money is, which means the problem will solve itself.

      Isn't amazing when capitalism does what it's supposed to?

      • The decease in availability they are predicting is about 1%. In the US that means we'll "only" be able to eat about 40 pounds of pork products per person per year.

        I really can't see how you'd define that as a "shortage" in any reasonable parlance. We aren't taking about something where the price will have to skyrocket because very little will be available (or that if the price was kept low it would be out of stock everywhere).

        • In the US that means we'll "only" be able to eat about 40 pounds of pork products per person per year.

          To use your example: Pork was at $0.80 / lb in May of this year. Now, if we can only eat 40 lbs per person per year, but we want to eat 50 lbs per person per year, then the way that capitalism demands that we handle this product is send the price to $1.00 / lb, which means people who want to eat 50 lbs of pork at $0.80 (for $40) now can only eat 40 lbs at $1.00 for the same price. Those who really really want pork and can afford it will pay that $1.00 / lb, those who don't will switch to cheaper substitute

          • I think "shortage" is when supply is exhausted. I work in manufacturing. When we have an order for 1000 machines, and we only have parts on hand to build 900 - that can be a "shortage". There are some parts with long lead times, where no amount of money will buy you another part. In other words, supply is exhausted. There are 100 machines worth of demand outstanding.

            In reality, we can get a small trickle of supply by pilfering lab machines, test benches, and raiding the reconditioning department - but this

      • Re: (Score:2)

        by Ichijo ( 607641 )

        Similarly, freeway congestion, another example of a shortage, can be prevented by eliminating the artificial price ceiling on freeway travel. In other words, by converting existing lanes to express toll lanes. And with no traffic congestion, the freeway would never need to be widened, ever again, at least not to eliminate traffic congestion. (Maybe to increase traffic throughput and increase economic activity, but that's not typically the justification given to widen a freeway.)

        But for some reason, suggest

        • But for some reason, suggest that the market should determine the price of freeway travel, and everybody goes nuts [greatergre...ington.org].

          In most of the world, and in the US cities of New York and Washington, DC - the poor people live in the surrounding areas and need to commute in to the city center - or they need to commute to another suburb. They are tied very tightly to their car, yet public transit mostly sucks in the suburbs.

          So unless you dramatically improve suburban public transit or come up with a way to let the poor live closer to the jobs, imposing a use tax on roads is highly regressive. We could probably figure out a way to mitig

          • Re: (Score:3)

            by Ichijo ( 607641 )

            imposing a use tax on roads is highly regressive.

            Not imposing a use tax on roads is even more regressive! As a group low-income residents, on average, pay more out-of-pocket with sales taxes [springerlink.com] for freeways than with tolls.

            So if you are truly concerned about regressive taxes, then you must be in favor of tolls.

            • So if you are truly concerned about regressive taxes, then you must be in favor of tolls.

              Well, sure - if you put together a combination of road tax increases and sales tax decreases that nets a more progressive tax system obviously I'd get on board. Unfortunately, I suspect that in most cases the sales tax would not be reduced so it would just be an additional burden.

              • Re: (Score:2)

                by Ichijo ( 607641 )

                You may be right that the tax revenue saved on freeway widenings (that will no longer be needed because traffic congestion has been permanently eliminated) will simply be used for something else and the tax rate won't fall, but that's no excuse to avoid making the most efficient use of tax money.

                • I just think that a more progressive tax up front would be better. Like a sales tax on all cars to be used for road construction and maintenance. Rich people buy more expensive cars, so they would pay more tax. People who drive more miles buy more cars, so they would pay more tax. You could even exempt cars that cost less than 2 or 3 thousand dollars. Base the tax on the Blue Book value, not the sales price. Exempt charities, resellers, and wrecking companies. This would also be easier to collect than a tol

        • That would work if and only if there was a viable substitute to driving down the freeways. Right now, the only substitute I'm aware of in a lot of areas is taking the surface streets rather than the freeways, which would just make the problem worse.

          Viable substitutes that might actually work include commuter rail systems combined with subway / light rail (Boston has had quite a bit of success with that), and for longer distances a high-speed auto train might work (e.g. you drive onto the train, which stops

          • Re: (Score:2)

            by Ichijo ( 607641 )

            That would work if and only if there was a viable substitute to driving down the freeways.

            Yes, there are always many viable substitutes for driving, solo, on the freeway, during rush hour.

    • Neal? Is that you?

      Sure you don't want to retire a few months ahead of schedule?

    • Don't know the difference between shortage and rationing as a result of price controls.

      The difference is that under rationing everybody still gets some, whereas under market pricing people with money can keep having all they want because those with less money get none.

      And, yes, I know that price controls outside special circumstances lead to a reduction of supply longer-term, and are bad. But it is ignorant to think a price hike won't force some people to go without. Many people in the world cannot

      • Extremely short-term rationing can be acceptable (e.g. after a natural disaster), but producers need to know that the long term price will be allowed to float.

        If it is charity we are after, then direct subsidy or introduction of an alternative is almost always going to be better in the long run.

    • Re: (Score:2)

      by fermion ( 181285 )
      There will be less pork and prices will be higher. If pork was not a fungible commodity, this would constitute a shortage, since demand tends to rise over time, if for no other reason than the population increases.

      The reason a pork shortage is not like a gas shortage is because, as mentioned, pork is fungible commodity and people can adapt quickly if the price goes up. Auto fuel, OTOH is not fungible, and special interests has made a great effort to insure cars are not made to use other fuels, and peopl

    • Re: (Score:2)

      by Hatta ( 162192 )

      What constitutes a shortage is kind of ambiguous in a market where price adjusts to match supply and demand. If there's still bacon on the shelves and selling, but you can't afford any, is there a shortage or not?

      • If there's still bacon on the shelves and selling, but you can't afford any, is there a shortage or not?

        I think if the price made such a huge jump that your consumption goes from "frequently" to "zero" then you could probably justifiably call it a shortage. When the supply disruption is so large that the demand curve completely changes in character from a simple poly or linear line to something with an asymptote.

        I work in manufacturing, so I tend to think of a shortage as when we can't get a part at any price.

        • What would you call the situation where you can get it but it'll cost more than the job's worth? I mean imagine a situation where you'll make a loss based on an existing contract or the customer will simply walk away if you try to pass the increase on.

          • I suppose it depends on whether the price of the individual item increased exponentially, or whether your quote was borderline to begin with.

            I have a friend in the steel business, and he takes losses from time to time when the steel prices go up. It balances out when he makes extra money on a job where the steel prices fall unexpectedly. He learned not to get too hung up on guessing the price of steel just right, but it can make for some rough months when he's consistently losing money.

            And yes, I've asked h

  • Economic impact (Score:2, Funny)

    by Anonymous Coward

    - Laid-off guys can stop fretting about not being the one to "bring home the bacon", because nobody is

    - Wall Street bankers will have to learn to eat low on the hog

    - In Washington, we'll start to see more "pork pail" projects

    - Schoolkids will grumble about opening their lunchbags and getting "LT sandwiches"

    • Laid-off guys can stop fretting about not being the one to "bring home the bacon", because nobody is

      Pharamacists can get dihydrocodeinone enol acetate, which is fairly close.

  • I'll just eat sausage instead (Score:5, Funny)

    by crazyjj ( 2598719 ) * on Monday October 01, 2012 @09:02AM (#41512791)

    Guess I'll just just have to forgo bacon in the morning. I'll just have sausage or ham instead.

    • Re: (Score:2)

      by prefec2 ( 875483 )

      As you know, the "finer" the sausage, the less meat is in it.

    • Or, you know, turkey bacon. There's probably also some imitation bacon made for vegetarians. Purists will look down their nose at such options, but I look down my nose at people who would call themselves bacon purists. That is, I will when I'm not stuffing my face with crispy strips of cooked meat that taste the same to me and don't cost an arm and a belly.

      • Re: (Score:2)

        by Hatta ( 162192 )

        I wouldn't call myself a bacon purist, but I would call you devoid of taste. Turkey is a good substitute for sausage, and for ground beef mixed into something else. But nothing really substitutes for the particular mix of crispy and fatty that makes bacon bacon. I even had lamb bacon and was disappointed.

        • I don't know, you seem to have sampled more species prepared as bacon than usual, I think most people have only tried pork bacon, not turkey and especially not lamb bacon. You suggest that NOTHING can compare to it. And you call me devoid of taste for suggesting otherwise. Why do you say you wouldn't call yourself a bacon purist?

          I mean, aside from the fact "bacon purist" is a silly and ridiculous term I seem to have made up.

    • Re: (Score:2)

      by Nidi62 ( 1525137 )
      Country ham. No one ever buys it so it's cheap, but it tastes awesome.

      True story: 2 years ago we had a bad snow/ice storm here (well, bad for us). Went to the store afterwards, and pretty much every meat product in the store was bought out, except the country ham. The display was completely full. Grabbed a couple packages, and I had plenty of food to eat for the next few days. Of course, this was a downtown yuppie area, so that kind of thing probably scares them.

      • Re: (Score:2)

        by vovin ( 12759 )

        Simple economics.
        'Round here you can find the same grocer in the same city selling pork ribs from 1.59/lb to 3.99/lb depending on the part of the city. Spare ribs are cheap where the posh people are and expensive where poorer people are. The reverse is true for baby back ribs. Basically people prize what they are most familiar with.

        A good country ham (salt cured and air dried) is excellent for making razor thin cuts (prosciutto-style) or soaking and roasting ... Often I find good ham is quite pricey when it

      • Re: (Score:2)

        by Hatta ( 162192 )

        Lucky. I can't even find country ham around here. And I'm 5 minutes from the Iowa border. You'd think every pig product possible would be available, but not really. Probably too far north.

    • Re: (Score:2)

      by ajlitt ( 19055 )

      Yeah right Lisa.

  • Let's all argue over how to spell "shortage" - fairly sure it's not C-R-I-S-I-S.

  • Bacon Prices On The Rise (Score:4, Funny)

    by cfulton ( 543949 ) on Monday October 01, 2012 @09:14AM (#41512899)
    NOOO. Bacon is the central pillar of my diet. BLTs, Bacon Omelets, Bacon wrapped meat of all kinds, Bacon wrapped bacon. How will I live without my lovely bacon?
  • Yes, there's going to be a global shortage. No, nobody reading this will have to go without. Yes, you may find yourself sighing a little and eating a bit less. No, that's not the end of the world. Yes, it will seem like it.

    • Re: (Score:2)

      by prefec2 ( 875483 )

      From an Iranian point of view, there is no bacon shortage. And most likely all other primarily Muslim-countries will agree. Therefore, there is only a 6/7 global shortage in pork. And I guess, that these prices will not rise in China or the EU, which would lead to an African-American-pork shortage (oh yes and Japan and Australia). So in the end there will be a US-pork shortage. And that is a good thing, as US citizens (like their EU counterparts) eat too much meat (which includes pork), which is a bad diet

  • I am going to run for government on the platform of creating a Strategic Bacon Reserve. My campaign slogan? "The kind of pork you can get behind!"
  • Next they'll tell us there is no real threat of a zombie apocalypse.
  • High pork belly prices are caused by limited supplies of corn, partly because of the drought in the US Corn Belt this summer and partly because using corn to make ethanol takes a lot of it out of the mouths of babes (baby pigs that is).

  • seems like we're one step closer to Soylent Green.

  • I shouldn't have gone long on corn bellys!
  • Actually bacon is taken from the side and rear of the pig. The hogwash is used to make Mountain Dew.
  • Just Saying ...

  • ...in my mouth, of course...

  • Do I need to cancel my 400 lb bacon order from McGonigles [mcgonigles.com]?

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