The Strange Economics Of Pig Meat: Ham Prices Are Down, But Bacon's Up

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Shoppers in the meat aisle may have noticed something weird last month: Bacon prices are sizzling, but ham's not so hot.

Bacon is more expensive than it was a year ago, with prices up 6.9% from May 2023 to May of this year, according to inflation data from the Bureau of Labor Statistics. Pork chops were up too, by 4.6%. But ham prices were lower, falling 5.4% overall and dropping 6.3% when you exclude canned varieties.

Econ buffs may remember that prices are set according to supply and demand. You'd expect any supply issues — like too many hogs, or too few — to cause prices of each of the items to move up or down, all in the same direction.

The discrepancy, then, must be caused by differences on the demand side. And it is: Demand for domestic pork has grown in recent years outside of the US. But rising demand, plus the same or reduced supply, should push prices up, not down.

To understand you have to zoom out, looking at long-term retail pricing strategy and food price trends.

Glynn Tonsor, a professor in the department of agriculture economics at Kansas State University suggests that if you zoom out, pork prices are indeed going up across the board.

But prices for ham actually went up higher than the prices of bacon and pork chops. That's because US ham exports have been booming, particularly to Mexico.

"In the middle of that five-year period, we had that Mexican demand boost," Tonsor said. "The US market's competing with Mexico for the same ham," he added. "So the prices are going to be higher domestically."

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