Drought: No Bacon Shortage, But Expect Higher Prices

By CnAgri2012-10-10 19:48:35 Print

No need to go hog wild. Despite a report from Britain's National Pig Association last week predicting a worldwide shortage of bacon due to drought, the U.S. is not experiencing a pork shortage, an Ohio State University Extension specialist said.

But consumers can expect to pay higher prices at the grocery counter next year thanks to a decrease in pork supplies as a result of the drought of 2012, which has been the worst in decades, said Steve Moeller, an OSU Extension swine specialist.

The drought, which severely impacted growers and producers nationwide, particularly in Midwest states including Ohio, is resulting in a 13 percent drop in corn production, the lowest production since 2006, according to the U.S. Agriculture Department.

As of Sept. 25, the majority of the state was experiencing abnormally dry, moderate or severe drought conditions, mainly in the western, southern and eastern areas of Ohio.

The drought has left pork producers forced to pay higher prices for feed, which makes up 70 percent of the cost to raise a pig, Moeller said. As a result, many producers are losing money.

"Pork producers were making about $10 to $12 per head in the beginning of 2012, but are now losing $40 to $60 per pig marketed," he said. "And that may continue through the end of the year.

"The drought has created a situation where feed costs alone are very near the market value of the pig. Producers are basically earning enough to just cover the cost of feeding the pig."

As a result, producers are starting to pull back, because they need to position themselves to not lose as much money in the short term, Moeller said.

"Producers are cutting their herds due to the cost of feed and breeding fewer sows," he said. "There will be fewer pigs in the market come summer 2013.

"The reduction in pig numbers is going to play out in the form of higher prices for pork because there will be a smaller supply to meet consumer demand."

The U.S. Department of Agriculture projects U.S pork supplies will drop about 1.3 percent next year versus this year, while consumer prices for meat, poultry and seafood will increase some 4 percent.

So while pork prices will be higher next year, there will very likely be plenty of pork for consumers to buy, Moeller said.

"But you'll have to pay more."