Hurricane Florence Could Cause Higher Bacon Prices
Pork production has already been severely incapacitated by the storm
Hurricane Florence made landfall on Friday night, pounding the Carolinas with high winds and destructive flooding. As of Monday afternoon, roads are severely flooded (to the point that Wilmington is essentially cut off from the outside world), over half a million people are without power, and the current death toll stands at 23. While the storm has already wreaked unprecedented havoc on the region, its impact could end up reverberating at grocery stores across the country.
That’s because the state’s sizable pork industry will more than likely be thrown into disarray as the destruction continues. With over 3 million hogs, North Carolina is the second-leading producer of pork in the US, accounting for 15 percent of all pork in the entire country, according to Newsweek.
Given the intensity of Florence, there’s a serious possibility that the storm could cause a severe supply shortage that affects bacon prices. Even if every hog manages to survive the storm, slaughterhouses and processing facilities in the storm’s path have been forced to shut down. That will create an inevitable delay in near-term supply.
With some municipalities already buried under 20 inches of water, the pork futures market is bracing for the worst. December hog futures set new record highs last week in advance of the storm, and there’s no good news suggesting things will trend downward anytime soon.
“You can only do so much to protect the hog crop and with this incredible flooding you’re probably going to lose millions and millions of pigs and hogs because of the storm,” Price Futures Group analyst Phil Flynn told Fox News.
That sentiment seems to prevail with farmers on the ground, who didn’t have an opportunity to relocate their animals before Florence made landfall. “Nobody would have the capacity to handle your animals,” local farmer Bo Stone told Reuters before the storm hit. “That’s not really an option.”
Producers both big and small have suffered. Agribusiness titan Smithfield had to close the world’s largest pork processing site last week, which might make it harder to deliver on their promise of free bacon to certain lucky customers. That’s not to mention the possibility of Smithfield’s locally loathed hog manure pits getting swept up by floods and contaminating the drinking water supply.
With Florence set to linger in the area and trigger further flooding, it’ll still be some time before we know the full extent of the disruption to the pork market. Of course, the Carolinas will face bigger challenges beyond pork prices as they rebuild. But if you’re planning on bringing home the bacon between now and the end of the year, expect to potentially pay a premium.