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US Pigs Too Fat for Holiday Hams? Please Pass the Bacon

By    |   Thursday, 20 Nov 2014 12:36 PM

US pigs are too fat for holiday hams this year after farmers overfed them in the wake of a deadly virus that killed millions.

While heavier hogs means more pork per animal, their hind legs exceed the size used for producing the 7-pound spiral-cut, half hams that are the most popular for family meals during year-end holidays, Bloomberg News reported.

Half of annual ham consumption by Americans occurs at Thanksgiving and Christmas dinners, and retail prices through October were up 26 percent this year to a record $3.433 a pound, government data show. The increase was fueled by the virus, which shrank the domestic herd and reduced the number of hogs slaughtered this year by 5.2 percent, boosting costs for meat buyers including Noodles & Co. (NDLS)

“This year has been a struggle for people that sell half hams because heavier hogs are coming to market,” Brian Mariuz, chief financial officer of HoneyBaked Ham Co.’s Michigan division, said by telephone from Troy, Michigan. The unit runs 74 of HoneyBaked’s more than 400 U.S. stores. “Seven-pound hams are in the highest demand and in the lowest supply.”

Meat processors slaughtered 92.09 million hogs this year through Nov. 15, down from 97.17 million in the same period a year earlier, after outbreaks of the deadly porcine epidemic diarrhea virus shrank domestic herds, U.S. Department of Agriculture data show. Even with hogs weighing a record 215.5 pounds (97.8 kilograms) each on average, pork output through September was down 1.2 percent to 16.71 billion pounds.

Food Prices

Through yesterday, hog futures on Chicago Mercantile Exchange advanced 7.3 percent this year, heading for the biggest annual increase since 2010.

Pork’s price gains have contributed to higher meat costs, which the government forecasts will rise more than any other food group this year. The Consumer Price Index for meat, poultry, fish and eggs increased 8.3 percent in the year through October.

Around the holidays, U.S. consumers favor spiral-cut half hams, created by slicing the meat in one continuous coil around the bone, according to Urner Barry, a food-industry publisher in Bayville, New Jersey. A typical light ham weighs 17 pounds to 20 pounds and yields two half hams. The wholesale price of that cut more than doubled this year, USDA data show. HoneyBaked’s hams fetch $7.59 a pound this year, up 30 cents from a year ago, while the cost is up 50 cents, CFO Mariuz said.

With about 5 million fewer hogs slaughtered so far this year, that’s reduced the number of hind legs used for hams by more than 10 million. At the same time, there has been an increase in hams weighing 23 pounds to 27 pounds, which is too big for most consumers interested in buying half a ham.

Seasonal Price

“There’s a lot of hams not showing up on the market,” said Russell Barton, who covers the ham market for Urner Barry. “So many of them are not at an optimal weight.”

While ham prices usually fall in the fourth quarter, during a seasonal increase in supply, they probably will be the highest ever for that period this year, said Steve Meyer, the president of Paragon Economics, an agricultural market researcher in Adel, Iowa.

Retailers and meat distributors generally place their holiday orders in July and August, according to Brandon Scholz, president of the Wisconsin Grocers Association. This year, wholesale ham reached an all-time high of $1.4368 a pound July 29, USDA data show. Prices were at 92.2 cents on Nov. 18, which was the highest for that day since the USDA data begins in 1998. Some stores will continue to make last-minute purchases even in December, Urner Barry’s Barton said.

Smaller Discounts

Grocers are advertising fewer discounts on pork than in recent years. In the week ended Nov. 20, 11,220 retail supermarkets featured spiral hams at an average price of $3.12 a pound, down from 12,660 at $2.40 last year, USDA data show.

Christmas week is the highest for ham sales, followed by Easter and Thanksgiving, according to Sherry Frey, vice president at West Dundee, Illinois-based Nielsen Perishables Group. Last year, Americans bought 318 million pounds of ham during November and December, or 50 percent of the annual total, according to IRI, a Chicago-based market research firm. Consumers increased spending on ham by 5.1 percent to $1.52 billion in the five years through 2013, even as the amount of meat dropped 6.4 percent, IRI data show.

Fatter Pigs


Not all pork is getting more expensive. Heavier hogs are helping to revive meat output. Pork production in September rose to 1.87 billion pounds, up 2 percent from the same month a year earlier, USDA data show. The wholesale cost of pork bellies, used to make bacon, dropped 27 percent the 12 months through Nov. 18 to 93.12 cents a pound, the lowest for that day in four years.

Hams for curing have become scarce and more expensive in Cadiz, Kentucky, home of the Trigg County Ham Festival, says Austin Hart, who took first prize this year. While Hart said that he and his grandfather won’t stop buying and preparing the meat for the holidays, he’s bracing for more price increases -- of as much as 50 percent for the raw meat.

“It’s a family tradition,” the 22-year-old said in a telephone interview Oct. 28.

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US pigs are too fat for holiday hams this year after farmers overfed them in the wake of a deadly virus that killed millions.
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Thursday, 20 Nov 2014 12:36 PM
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