While wholesale bacon buyers are still gasping at the daily sticker shock, some are predicting an end to the increase might be coming sooner; packers shipped less pork last week than they had since June- a sign that the market is starting to reject the higher prices.
Chad Henderson, a market analyst at Prime Agricultural Consultants Inc., told reporters:
I don’t see anyone wanting to push too much more in retail. Pork is starting to look expensive.However at least one economist disagrees: (via Bloomberg)
“What you have with bacon is what economists call inelastic demand, meaning it doesn’t vary much,” said Chris Hurt, a livestock economist at Purdue University in West Lafayette, Indiana. “If a person wants a BLT sandwich and likes that in summer when their patio tomatoes come on, then it doesn’t make a difference if bacon is $2 a pound or $6 a pound. They’re going to go out and buy it. When it’s in short supply and a lot of people want it, they’ll pay a higher price.”Customers will probably be seeing this increase at least one place: Wendy's announced today that they will be phasing out cheap bacon, and thus increasing prices on their sandwiches.
Further Reading:
Bloomberg on the continued market conditions
The Toronto Sun on Canada's issues with pork
The SF Gate crunches the numbers
