Coffee, then gas, paint, cars, toilet paper, artificial sweetener–my Diet Vanilla Coke!! my Starbuck’s Lite Bottled Frappaccinos, my Diet Mountain Dewwwwwwww— and, now, BACON?!?!?
Have we reached the end of civilization? Will this bacon shortage finally break our collective will?
I have news for all of us. While the pandemic has created and intensified shortages–supply and demand fluctuations–in some of our favorite products, a good chunk of the news around the Current Bacon Terror is manufactured. How do I know? Because we’ve been here before. Price spikes and shortages aren’t always related to the actual resource in demand.
However Will I Drive to the Grand Canyon?
Chances are, you’ve seen or heard about gas lines at some point in your lifetime. The first one I recall was way back in 1973, and, ever since then, gas shortages crop up with regularity in some part of the world, such as when hurricanes are forecast. This, despite gasoline consumption per person being down some 20-40% since the 1980s. We use less gas; gas costs more; temporary shortages cost spikes.
You might have been taught about basic economics at some point, and how the price goes up if supply is low. Sometimes the entire demand shifts to a part of a curve where prices are much higher, like this:
That’s the model most of us have in our heads to account for price spikes. Aided by the media, we routinely conclude we are now on the extreme end of the curve–remember last year’s price-gouging for hand sanitizer? There was a massive increase in demand and a short-term shortage, ergo $15 for a small bottle. The problem with oil or gas–or bacon–is that things are a lot more complicated.
For example, during the lockdown last year, when gas consumption plummeted–that extreme dip in the graph–our local California gas price was still around $3.00 a gallon. Three dollars?!? How could that be, when the price of crude oil was negative and there was plenty of gas available? Why? Because California gas taxes are now around $2.50 per gallon, which they should be, in order to discourage use of fossil fuels which have led to brown skies, repetitive droughts, and widespread wild fires. News stories focus on one cause or filter in comments from the industry, which claims regulation or taxes are causing production limitations. Hogwash.
Why is Britain’s gas price high right now? Because there’s a shortage of drivers, not of gas. Gas consumption still hasn’t returned to its pre-pandemic levels. But there are fewer British truck drivers. Some have retired, some died (*Covid*), and trainees are taking longer because of needed pandemic-related restrictions. Plus, an estimated 20% exited due to Brexit. In other words, those gas lines are divorced from the resource itself. Supply and price are influenced by transportation labor, production, and taxes, not to mention panic buyers and speculators. The solution here is not to increase production, no matter how many arguments are put forth about the need to de-regulate or the necessity of securing the oil-rich countries. Remember the rationale for invading Iraq in the first place? Did that eliminate gas lines?
The answer is to encourage industries and products that bypass the need to have that price-fluctuating, polluting, messy gas in the first place. It took decades of gas lines, but we finally will have all-electric giant trucks and SUVs that get 50 miles to the gallon. The British Gas Crisis is that Britain still doesn’t have enough electric cards and hybrids in circulation.
Which Brings Me to Bacon
First and foremost, there is a spike in the price of pork products and bacon. The price of bacon was under $4.50 a pound until 2012, when it started drifting upward, averaging $5-$6 for the last decade. This past April, though, the average price had climbed over $6, and, by September, over $7 a pound. Here on the expensive Left Coast, a pound of bacon starts at $7.50–even at Target–and might be $11-$13, depending on the store and the city. (I don’t recommend buying bacon at a 7-11 on the Embarcadero.)
The argument about the shortage causing this price spike, repeated by most articles like this one, is as follows: when the pandemic occurred, people stockpiled pork and demand plummeted. Because there was too MUCH pork, farmers had to mass slaughter hogs. The food processors then did a lousy job of handling the smaller supply as the pandemic continued, forcing workers into unsafe conditions, which caused a huge drop in the number of available workers. Overall, this has depressed pork production, ta-da, price spike. You’re picturing that graph up there, with demand shifting to the high price segment of the supply curve. Hogwash. (Yeah! I did that on purpose!)
How much did production drop? A Whopping 2%, according to some market estimates. In other words, back to the 2019 levels. Prices doubled in some places because of a 2% drop? That kind of drop doesn’t fit the narrative.
There are other circumstances. The Department of Agriculture recently pointed out that four companies have quietly come to own 66% of the market. Big Ag is squeezing farmers, small restaurant owners, and consumers with a combination of price-fixing, supply-limiting, and speculating. Those companies, like Tyson and Cargill, have responded with HOW DARE YOU! PANDEMIC! PANDEMIC!, ignoring their own unsafe processing rules which sickened workers and further restricted supply of labor.
Bacon, Like Relationships, is Complicated
Then, there’s international trade. China has been the world’s largest producer of pork, and bacon became part of the China-U.S. trade/tariff war during the previous administration. But then there was an Asian Swine Flu scare on top of Covid, reducing China’s domestic production, which would have called for more U.S. exports even when U.S. production is down. The U.S. still exported pork while consumer demand remained high. Ergo, Americans grumbled but paid the higher price, while Big Ag still exported pork.
Plus, California. If you started researching bacon prices in the spring, before they increased, there were still stories of impending doom–of Bacongate and Bacon Rebellion and so on. This is because of Proposition 22, which goes in effect in January, but was passed in 2018. The pork producers have been screaming and suing ever since.
The new law requires about 20% more breeding space for pork livestock, 24 square feet instead of 20. Instead of working to meet that rule, the out-of-state producers have been simply complaining and feeding stories that our in-state bacon supply will plummet to dangerously low levels. The chicken producers complied two years ago, which is why you can now buy cage-free eggs at Wal-Mart and not just Whole Foods. But why a January 1st, 2022 law would cause a price spike now is anyone’s guess, unless you factor in price-fixing, speculators, and lobbyists.
So, let’s recap. Proposition 22, passed FOUR YEARS AGO, will cause havoc because pork producers haven’t done anything to add that one foot more of space. Because Californians will have no pork as a result, the entire industry will collapse. Eatthis.com says that “bacon will vanish.” (Except everywhere outside of California, where supply will increase. )
Those Who Do Not Learn from Bacon History Are Doomed to Repeat It
Where have we heard this before? Consider headlines from previous years:
- EMERGENCY: Our Bacon Supply Is At A 50-Year Low (February 2017)
- The Truth Behind This Week’s Bacon Shortage News … It’s time to take a chill pill… national/bacon-shortage-fake… (February 2, 2017)
- The Great Bacon Shortage (Hoax) of 2012
The bacon industry, not just in the U.S. but in England, Europe, and China, have constantly rung alarm bells. Every other year, there is impending doom, sparking a panic. And it’s always about bacon, not pork chops, pork loin, or ham. Even as production increased over the years, exports and speculation have, too, and the price has climbed. Don’t forget that pork bellies–the literal source of bacon–are sold on the futures market. Wall Street speculators can keep the price high; conglomerates can keep the price high. Panic-buying, fueled by alarmist headlines about shortages, keep the price high.
The solution is to reduce demand, as we did with gasoline, not obsess about the supply side. We don’t need to put bacon on every darned thing. We’re the one’s eating bacon-flavored kale chips, bacon candy canes, and bacon-flavored vodka.
As with my predilection for Diet Mountain Dew, panic over small shortages is mostly self-inflicted. We don’t need fifty flavors of diet soda, and we don’t need bacon on everything.
There’s an easy solution. Just don’t eat the kale chips.