USA/CHINA – If you like bacon, then you might need to start bringing home some more of it in order to keep yourself fully stocked.
The price of pork products of all varieties, from hot dogs and sausages to bacon, ham, and Spam have been on the edge of a major rise for months now and are expected to be at even greater risk of climbing by this summer.
The major contributor to the potentially-fattening costs is an epidemic of African swine fever which has been killing and sickening a large number of pigs used for pork production in China.
Chinese pork accounts for roughly half of the world’s ongoing supply and impacts from the recent fever outbreak have already cloven supplies in the global marketplace and chopped China’s pork output by as much as ten percent this year alone.
In an effort to offset its domestic issues, pork producers in China are turning to what is already a record number of imported swine from places like Canada, Brazil, and even the United States.
“This is a big problem for China,” said Arlan Suderman, chief commodities economist at INTL FCStone, in an interview with station Q13 Fox in Seattle. “We expect it to be a five- to seven-year problem before production can be restored.”
Although the problems in China have caused the hog futures market to skyrocket in recent months, consumer pork prices have remained steady in the U.S. during that time, according to statistics from the USDA. However, that could easily change as the Chinese crisis becomes more protracted and almost certainly if it escalates.
With hog futures for June up nearly 30 percent already, it may only be a matter of months until these price increases will become too big for pork retailers to handle without an offset to their own costs.
"We don't get any of our pork from China, but we're still up about 15 to 20 percent in wholesale prices," explained Mike McKee, owner of Mike's Meats in Wenatchee and Mike's BBQ and Smoked Meats in Quincy. "We just have to absorb the higher prices until we can't feasibly do it anymore."
“China will likely do what it can to get pork supplies destined for US consumers and others to its own shores to stem the shortfall, pushing pork prices upward until the consumers shift to poultry, beef and other options,” said Suderman.
China is forecast to have a drop of over 16 metric tons in pork output over the coming year, which could easily have an impact on a number of commodities traded within the global marketplace, since the cost of food products is considered the greatest factor in general consumer inflation worldwide.