Ham Is Pricier Because Pigs Are Too Fat

Never mind that pork wasn’t even on the menu at the 1621 feast shared by the Pilgrims and the Wampanoag at Plymouth Colony; millions still consider it a Thanksgiving staple, right up there with turkey, cranberries, and football. This year, however, ham lovers will have to pay dearly for their holiday fix. Thanks to an unlikely turn of events, ham has never been more expensive. Retail prices through October were up 26 percent, to a record $3.43 a pound, government data show. One of the main reasons: U.S. pigs have become too fat.

Hogs in the U.S. are at their highest recorded weight because farmers fed them longer this year to make up for losses caused by a virus that killed millions of piglets. While heavier hogs mean more pork per animal, their hind legs—the source of the ham cut—exceed the size used for producing 7-pound, spiral-cut “half hams,” which typically serve as many as 14 people. The wholesale price of the cut more than doubled this year, U.S. Department of Agriculture data show.

Around the holidays, Americans favor spiral hams, which are created by slicing the meat in a continuous coil around the bone, according to Urner Barry, a food industry publishing company. A typical light ham weighs 17 lb. to 20 lb. and yields two half hams. This year, however, there’s been an increase in hams weighing 23 lb. to 27 lb., way too large for most consumers.

While an average hog weighed an all-time high of 222 lb. in May, pork output through October was down 1.3 percent, to 18.8 billion pounds. The decline was caused by the virus, which shrank the domestic herd and reduced the number of hogs slaughtered this year, boosting costs for meat buyers. Processors slaughtered 92.1 million hogs through Nov. 15, down 5.2 percent, from 97.2 million a year earlier, USDA data show.

That drop means the number of hind legs available to be used for hams has been reduced by more than 10 million. “There’s a lot of hams not showing up on the market,” says Russell Barton, who covers that market for Urner Barry. And among those that do, “many of them are not at an optimal weight.”

Consumers aren’t happy with the recent influx of larger hams. “As we all know, the American family is getting smaller, and the average holiday gathering is getting smaller,” says Brian Mariuz, chief financial officer of HoneyBaked Ham’s Michigan division, which operates 74 of HoneyBaked’s more than 400 U.S. stores. “The consumers still want a 7-pound ham, and it’s becoming extinct. It really is. The 7-pound half ham is almost a thing of the past. We’ve leaned on our long-term supplier relationships to get every small ham that comes through.” Although HoneyBaked’s meat costs are up 50¢ a pound vs. a year ago, the company’s eating part of that increase and has raised prices only 30¢, to $7.59 a pound, Mariuz says.

Last year, Americans bought 318 million pounds of ham during November and December, or 50 percent of the annual total, according to researcher IRI. Through Nov. 24 this year, hog futures on the Chicago Mercantile Exchange (CME) advanced 6.2 percent. Pork’s price gains have contributed to higher overall meat costs, which the government forecasts will rise more than any other food group this year.

Grocers are advertising more discounts on pork than in recent years. For the week through Nov. 27, the number of retail supermarkets featuring spiral ham promotions rose to 26,110, from 25,610 a year earlier, USDA data show. This year’s average price: $3.08 a pound, up 17 percent from $2.63 last year. But not all pork is getting more expensive. The wholesale cost of pork bellies fell 27 percent in the 12 months through Nov. 18, to 93.1¢ a pound, a four-year low for the date. While that’s little solace for holiday diners, it’s welcome news for fans of another porcine favorite enjoyed the rest of the year: bacon.

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26 November 2014 | 8:50 pm – Source: businessweek.com


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