Why is Bacon So Expensive These Days?

Bacon has become an increasingly popular food item over the past few decades. From bacon-topped burgers to maple bacon donuts, it seems like bacon is everywhere nowadays. However, if you’ve tried to buy bacon at the grocery store recently, you may have noticed the price is significantly higher than it used to be. So what’s causing the surge in bacon prices?

Supply and Demand Imbalances

One of the main reasons behind the skyrocketing bacon prices is an imbalance between supply and demand.

The demand for bacon has steadily increased over the years. Market research shows that bacon has become a staple breakfast food for many Americans. The rise of the keto and paleo diets in recent years which emphasize eating more protein and fat has also contributed to bacon’s popularity.

At the same time, supply has been constrained. In 2020 and 2021, COVID-19 outbreaks at major pork processing plants led to shutdowns and slowdowns. This disrupted the pork supply chain and led to shortages of products like bacon. Additionally, outbreaks of African Swine Fever in Asia have reduced the global pork supply. With demand high and supply lower than usual, bacon prices have been pushed up significantly.

Higher Input Costs

Producing bacon has also become more expensive for suppliers, which gets passed on to consumers through higher prices

The cost of ingredients that go into raising pigs – like corn and soy-based feed – has increased. Transportation and labor costs have also risen. Getting products from farms to processing facilities and eventually to consumers requires more money than it used to.

Packaging materials, electricity, and other operational costs for processors have climbed as well. These input costs add up, resulting in pricier bacon when it finally hits the supermarket shelves.

Market Consolidation

Over the years, the meat industry has gone through considerable consolidation. A small number of large companies now dominate much of meat processing and distribution. For example, the top 4 pork processors control over 60% of the market.

This consolidation gives large meat companies more pricing power. With less competition they can more easily pass higher costs on to customers. The lack of competitors also reduces incentives to keep prices low. These dynamics within the highly-consolidated meat industry have facilitated the rise in bacon costs.

Record-High Meat Prices Overall

Bacon is not the only meat that has gotten more expensive. The prices of beef, chicken, and other pork products have reached record heights as well.

Meat prices tend to be correlated across the different animal protein categories. When factors like supply chain disruptions, higher grain feed costs, and strong demand boost the price of one meat, it often leads to higher prices for the other meats too.

So part of bacon’s massive price inflation is linked to the higher prices being seen across the meat industry as a whole right now. Bacon is simply part of the broader spike in meat costs that has unfolded over the past year.

Why Are Bacon Prices Increasing Faster Than Other Meats?

While beef and chicken prices are elevated as well, they have not risen nearly as drastically as bacon in the past year. What accounts for bacon seeing more extreme price inflation than other meats?

A few reasons help explain why consumers are experiencing sticker shock specifically when buying bacon:

• Higher processed meat demand – Bacon is considered a processed meat, which saw increased demand during the pandemic as consumers stocked up on shelf-stable foods. Fresh meats like chicken breast didn’t have the same level of demand growth.

• Limited bacon production expansion – Pork processors were slower to expand bacon production compared to other meats as demand increased post-COVID. Constrained bacon supply coupled with the demand spikes further amplified bacon prices.

• Low pork belly supply – Bacon is made from pork belly trimmings. Low pork belly inventory and high demand has driven up pork belly prices, contributing to pricier bacon.

• Retail vs. wholesale dynamics – Bacon demand rose more sharply in retail than foodservice during the pandemic. Redirecting pork belly supply to the higher-priced retail channel increased bacon costs.

Will Bacon Prices Decrease Again?

With bacon prices hitting all-time highs, many consumers are wondering when they might start to come back down.

Some analysts predict bacon prices should begin to decrease by mid-2022. However, a full return to pre-pandemic price levels does not look likely in the near future.

Processors are working to increase production to better align with surging demand. But it takes time to expand pork and bacon supply. Any further disruptions to pork production, like additional COVID-19 impacts or outbreaks of other livestock diseases, could cause prices to continue climbing.

Ultimately, bacon costs will be determined by the balance between consumer demand and hog farmer and processor output. If demand growth slows and supply rebounds as expected, bacon prices should moderate. But it will likely take a number of months or even years before bacon is as cheap as it was 2-3 years ago.

In the meantime, consumers may continue finding bacon sticker shock at their local supermarkets. The days of cheap bacon appear to be over, at least for now.

Impact of High Bacon Prices

These exceptionally high bacon prices affect more than just consumers’ wallets. The ramifications are being felt throughout the entire food industry:

• Foodservice challenges – Restaurants featuring bacon heavily in their dishes have struggled with rising ingredient costs cutting into profit margins. Some have had to raise menu prices to compensate.

• Shrinking packages – To offset higher costs without increasing package prices as much, some manufacturers have reduced package sizes – giving consumers less bacon for their money.

• Consumer reactions – Shoppers have been purchasing less bacon overall in response to the price hikes. Some have started buying cheaper proteins like chicken instead.

• Producer struggles – Despite the expensive bacon prices, pork farmers have dealt with rising production costs and therefore not benefited much from the inflated retail costs.

• Search for bacon alternatives – Food companies have accelerated innovation efforts for bacon-like products made from alternative proteins such as turkey, mushrooms, and eggplants to tap into demand.

• Lowered pork belly supply – With bacon demand so high, processors have had to divert more pork belly supply to bacon production – leaving less for other pork belly products like chashu and sautéed pork belly.

The shockwaves of the unprecedented bacon price inflation are far-reaching. America’s obsession with bacon is being tested as the cost to consumers continues climbing to new heights. Time will tell how long these elevated bacon prices persist and how the various players in the pork industry adapt. For now, bacon lovers may need to view it more as an occasional treat rather than an everyday staple.

My Take on Bacon Prices

As an avid bacon enthusiast, I have to admit I’ve experienced some serious sticker shock lately when buying my beloved bacon. My typical pack of bacon now costs me around $7-8 compared to $4-5 previously. That’s a huge increase I’ve really noticed denting my wallet.

While the economist in me understands the market dynamics causing bacon prices to skyrocket, the bacon lover in me remains disappointed. I’ve had to limit my bacon purchases and look for cheaper alternatives to allow me to continue enjoying it regularly.

I’m hopeful bacon prices will start moderating soon. But some analysts predict they may keep rising. I think many consumers have a bacon breaking point where they stop buying it altogether. So the meat industry needs to be proactive to ensure they bring back affordability and avoid losing hardcore bacon fans.

No matter what happens with prices though, I know I won’t give up bacon completely. Through thick and thin, bacon will remain one of my guilty pleasures. That satisfying sizzle sound when it hits the pan and the aroma filling my kitchen keeps me hooked. Here’s hoping we see some relief down the road for all the bacon fanatics out there like me!