BLT costs harder to swallow with U.S. pig virus, drought

Wed Jul 9, 2014 3:54pm EDT
 
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By Theopolis Waters

CHICAGO (Reuters) - The cost to produce a BLT, America's favorite summer sandwich, hit a record high of $1.65 in May and will continue to take a bigger bite out of wallets in the coming months, given a pig virus that has ramped up bacon prices and drought-stricken salad crops in California.

But price increases may be limited as farmers breed bigger pigs and processors tap stocks built up in expectation of tight supplies as the Porcine Epidemic Diarrhea virus (PEDv) killed millions of piglets in the past year.

PEDv deaths helped push bacon to a record $6.05 per pound in May when the price to make bacon, lettuce and tomato (BLT) sandwiches also peaked.

Bunny Leyva, owner of Bunny's Cafe in Stockton, California, stocked up by doubling her order of pre-cooked bacon as prices recently jumped to $14.49 per pack from $12.99 within a two-week period.

"I know it's going to start climbing, so I buy two of whatever I usually get," she said.

However, prices for pork bellies, used to make bacon, are now down 15 percent from an April peak of $2.06 per pound, as pigs are coming to market heavier to counter lower numbers. Pork output has slipped under 1 percent this year despite a 4.4 percent drop in pigs killed.

"They (bellies) are going to be as high as last year, but not by a lot because of the stocks we carried into the spring," said Steve Meyer, president of Iowa-based Paragon Economics.

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