By Adam Russell
The future of U.S. pork belly supplies isn’t so clear despite reports of an impending bacon shortage in 2020, according to a Texas A&M AgriLife Extension Service economist.
David Anderson, Ph.D., AgriLife Extension economist, College Station, said numerous recent reports regarding a bacon shortage in 2020 could be based more on expectations than current reality.
Anderson said Chinese demand for U.S. pork has increased significantly since an outbreak of African swine flu led to large scale culling of China’s swine herd. Growing exports of half-carcasses of U.S. pork to China is fueling concerns that U.S. supplies of pork bellies, the cuts that provide bacon, may not keep up with domestic demand.
“The long-term expectation is for big exports to China, but that is relative to the record amounts of pork we are producing today and have in storage,” he said. “Pork prices are extremely cheap here and are competitively priced in China even with the current tariff.”
Pork belly supply on ice
Anderson said cold storage stocks of pork bellies, the cuts that produce bacon, are the highest he has on record going back to 1973. The U.S. Department of Agriculture reported pork bellies in cold storage were up 34% from last year, reaching 40.7 million pounds compared to 30.4 million pounds in 2018.
“It’s also worth noting that bellies in storage is highly seasonal,” he said. “September storage is often very low.”
U.S. pork exports have increased significantly since African swine flu cut China’s herd in half over the last several months. Anderson said Chinese demand for pork hasn’t let up and led to prices so high that U.S. pork is competitive despite a 67% tariff.
Demand for pork bellies in U.S. markets has continued to grow as bacon has become a staple in many households, Anderson said.
“We’re producing more and more hogs here at home, and pork bellies are only one cut, but we have to remember America’s appetite for bacon,” he said. “Bacon is on everything these days.”
Rollercoaster market
Anderson said cold storage holdings could indicate bacon-producing companies and restaurants are building supplies in case there is a shortage and prices begin to rise. Expectations of a shortage and subsequent price speculation, rising exports to China, the ongoing trade dispute, how African swine flu continues to affect China’s swine herd, U.S. production and stockpile levels add to the commodity’s uncertain future and ultimately market volatility.
Pork belly prices have been a “rollercoaster for a while now,” Anderson said, well before Chinese supplies became a factor.
For now, Anderson expects U.S. pork exports to China will continue to grow as the Chinese continue to deal with swine flu.
“All these stories could be true in the future even though they appear to be at odds with what is going on with production,” he said. “We’ll just have to wait and see if export growth is larger than production growth to the point it cuts into domestic supplies and causes prices here to rise.”
AgriLife Extension district reporters compiled the following summaries:
CENTRAL: Conditions were dry with some light showers and dropping temperatures. Some areas reported 2.5 inches of rain. Sticky field conditions due to recent rains were reported in some areas. Nearly all counties reported very short soil moisture levels. Fieldwork and small (hyphen) grain planting began, and cotton harvest was wrapping up. Producers continued planting wheat and oat fields for winter grazing and grain production. Some wheat and oat fields were emerging, while some producers were waiting for rain so they could plant. Pastures were in poor condition due to extended drought, and livestock were receiving supplemental feed. Stock tanks were closer to empty than full. Captures of fall armyworm moths were on the rise. Cattle were in good condition.
ROLLING PLAINS: Conditions were cool with some areas receiving an early freeze and light moisture. Wheat plantings slowed as producers waited on moisture. Cotton harvest started in some areas. Ranchers were providing supplemental hay and waiting for wheat fields to provide grazing for stockers.
COASTAL BEND: Scattered showers fell over most of the area with reports of 2-4 inches falling in the northern end of the district. Wharton County reported the first load of ratoon crop rice arrived at the dryer with fair dry-weight yields and good quality. Forecasted rainfall may delay the harvest of ratoon rice, hay and remaining cotton. In general, pasture and soil conditions improved with recent rains, but a few areas continued supplemental feeding of hay and protein for cattle due to drier conditions. Winter pasture planting continued. Some producers were getting ready to start fertilizing. Livestock remained in good condition with auctions reporting big runs of cattle from producers weaning and culling them. Pecan harvest continued with good quality and fair yields.
EAST: Rainfall and cooler temperatures prevented producers from getting another cutting of hay. Some pastures had standing water. Winter pasture planting was in full swing across the district, with some counties already reporting growth. Fall vegetables were in good condition. Livestock were fair to good. Pasture and rangeland conditions were poor to fair. Subsoil and topsoil were adequate. Armyworms were reported. Wild pig problems increased and created major issues across the district. Harrison County reported they received more wild pig calls than ever before.
SOUTH PLAINS: Subsoil and topsoil moisture levels remain the same. Cotton harvest should be starting soon. Most counties reported a hard freeze that should have killed plants that didn’t die during the first freeze. Some areas received snow. Cotton grades were poor so far. Winter wheat was being irrigated. Rangeland and winter wheat were in fair condition. Pastures were holding up steady. Grain harvest continued. Cattle were in good condition.
PANHANDLE: Surplus subsoil and topsoil were reported in some areas. Temperatures dropped, and 2-5 inches of snowfall was reported throughout the district. Cotton harvest stopped due to the wet weather in southern areas of the district. Bolls were open in northern areas. Winter wheat was planted and had emerged in most areas. Soybeans dropped leaves in northern parts of the district. Corn was in fair condition in the southeast and northeast areas. Pastures and rangelands were in fair to good condition.
NORTH: Topsoil moisture levels were adequate with some counties reporting short to very short. Some areas received up to 3 inches of rain. Rains were on and off, with lighter soaking rains and some producing runoff. Temperatures cooled with lows in the 40s and highs in the 80s. Winter wheat was planted, and livestock were in good condition. Armyworm and grasshopper damages were minimal so far.
FAR WEST: Temperatures ranged from the high 80s and low 30s. A cold front brought frost but not enough for a hard freeze. Rangeland showed some green color but was quickly going dormant. A small amount of winter grass was emerging and beginning to grow in some areas. Cow/calf producers continued to rotate pastures and work herds. Livestock were in good condition. Some fall calves were born. Producers with contracts in Nebraska shipped three loads of 600-700-pound calves. Cotton stripping started. Producers ran a few test strips in smaller irrigated circles as well, but the soil moisture, maturity and boll opening varied across the northern part of the district. Cotton harvest continued at a quick pace. Producers reported it was taking too many acres to make a module this year. Yields were below average, and for the most part, grades were coming back lower than producers expected. Wheat planting had not progressed any and most likely will not until significant moisture falls. Pastures looked poor. Producers were evaluating their livestock to determine supplemental feeding strategies amid poor quantities and quality of forages. Pawnee pecan harvest started, and yields were better than expected. Several small grass fires were reported.
WEST CENTRAL: Moisture conditions were very dry. Cotton producers defoliated and applied boll openers to some fields. Cotton harvest was underway. A cold spell delivered the first freeze, but daytime temperatures were mild with cool nights overall. Wheat was in poor condition and needed rain. Pecans looked good. Livestock were in fair to good condition, but winter feeding was in full swing due to drought.
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