Bacon prices dropped by the most in eight years last month in the US, but the relief for meat eaters is likely to be temporary.
That’s because money-losing hog farmers are cutting back herds. Top pork producer Smithfield Foods Inc. this week said it would close 35 hog farms and lay off of 92 workers in Missouri. Meanwhile, rival Tyson Foods Inc. reported a $74 million loss in its pork segment in the second quarter.
The problem is that people love bacon and little else of the hog. Many pork cuts other than belly struggle to compete against chicken and beef. Herd cuts now elevate risks for higher costs in the months ahead. Already, wholesale prices for pork belly, which is sliced into bacon, have surged to the highest levels since last year’s record high.
For now, shoppers can find bargains. Prices for bacon and related products fell nearly 11% in July from a year earlier, the largest drop since 2015, according to Bureau of Labor Statistics data released Thursday. Milk fell the most in five years while eggs costs declined further, easing what has been the worst food inflation in decades.
--With assistance from Dominic Carey and Gerson Freitas Jr..
