Low meat supply could raise pricesThe drought that plagued much of the country this summer will likely result in higher meat prices at the supermarket. Because many crops fared poorly during the dry growing season, prices were raised accordingly, and hog farmers struggled to get enough affordable feed for their livestock. The drought has impacted prices throughout the food supply chain, and rising costs don't appear to be slowing down.

The impact of the drought
Because the hot, dry summer led to a corn shortage, corn prices have shot up this year. Many farmers use corn to feed their hogs and cattle, and have been hard-pressed to afford enough food for the animals. Bloomberg reported that corn prices reached a record high of $8.49 a bushel in Chicago in mid-August. Many farmers have decreased the size of their herds just to ensure they can feed their livestock as their direct material cost continues to rise.

To shrink their herds and save money on feed, farmers are sending more animals to be slaughtered. Excess pork on supermarket shelves has caused prices to drop for now, according to Bloomberg, and prices are down more than 8 percent for the year. The temporary excess slaughtering is causing a momentary surplus of pork for consumers, but this trend is not likely to last.

Pork shortages possible
Because hog farmers are cutting their herds to save money on feed, they are sending more breeding-aged females to be slaughtered. Fewer of these young females could mean that farmers have a difficult time boosting their herd numbers once corn prices drop back to a normal level.

Traders are expecting fewer pork supplies next year, and lean-hog futures for July delivery are up to more than 97 cents per pound, Bloomberg reported. The USDA also anticipates a pork shortage, and estimates that per-capita supplies will be at the lowest level since 1975.

Prices rising
The anticipated pork shortage will mean consumers are paying more for their meat. Higher pork and beef costs will raise consumer grocery bills even more, as shoppers are already suffering from record high food prices. This may also mean that in addition to more expensive groceries, consumers may also be paying more for meat dishes at restaurants.

"If you got sticker shock on pork, you'll have a heart attack when you look at beef," said C. Larry Pope, Smithfield Foods' CEO, according to Bloomberg.

As pork supply remains high for the moment, some consumers may want to stock up before limited products and higher prices hit their local grocery stores.
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