Few things get Americans excited like bacon, so with wholesale pork belly prices up sharply this year lovers of the meat should brace for sticker shock at the supermarket.
At the same time, restaurants serving up bacon cheeseburgers, BLTs or other menu items with the American favorite may see those higher prices, too, which could take a bite out of profit margins.
Cash prices for wholesale pork bellies, a cut of pork sliced to make bacon, are up 71 percent since the start of 2017 through Thursday, according to commodity research firm Urner Barry. On the retail side, it shows the weekly retail average for brand-level bacon was up 21 percent in the same period.
"Seasonally, this increase makes sense," said RaboResearch analyst Steve Nicholson. "It's grilling season, so if you're making bacon cheeseburgers you have to have bacon." Even more, it's the season for bacon, lettuce and tomato sandwiches, he said.
In addition to the seasonal period of high demand, tightness in supplies of pork bellies have supported prices.
Pork bellies typically go into cold storage at the end of the year when there's excess supply and lower demand. During the recent winter months, though, robust demand continued for both bellies and bacon so industry supplies were unable to get fully replenished.
Indeed, U.S. Department of Agriculture figures showed December 2016 ended with the lowest supplies of pork bellies in cold storage during a December going back to when the department began tracking the number in 1957.