First, the good news: Bacon prices dropped from $4.77 a pound to $4.70 a pound over the last month!
You have been hiding under a rock if you haven’t heard about the price of gold. Gold’s rally has been tied by pundits to inflation fears. In fact, some of that is true. But long term demand for gold is going to be driven by rising incomes and an increasingly populated world wide middle class.
Yesterday, an article in Pork Magazine confirmed the inflation trend. Meat and Egg prices have risen 10 out of the past 11 months. People are paying up for protein. This year, by products of the protein industry, milk, butter and cheese have also increased in price. Cereal is not any different. Grain prices are also up.
You don’t have to buy gold, but you gotta eat.
Over the past two years, cattle and hog producers have cut the size of their herds. This combined with the increase in corn and soybean prices has finally found its way to the retail market. Because of nature, producers can only rebuild the herds so fast.
Many will blame this price rise on the value of the dollar. It has some effect. But the real effect was the weather. Worldwide crops were damaged last year. This has lead to tighter supplies. Farmers have increased plantings and so far, it looks like we will have a record harvest.
Looking ahead, prices in the long term should continue to increase. Worldwide demand is increasing. If the US continues to pursue free trade agreements, that should put upward pressure on prices as well. Producers want to see the Senate move on the CAFTA free trade agreement that has been sitting in limbo for years.
Now the bad news: Bacon prices are up 34% year over year.