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Pork bellies and patio tomatoes
Are you enjoying those BLTs with fresh summer tomatoes? They're so delicious, you probably didn't notice that the price of the bacon in the middle was up about a dollar a pound.
Bacon makes for an interesting study in market forces and economics.
The price of bacon at the grocery store is up because the price of the pork bellies from which it is made is up nearly 50 percent since June.
That's because hog producers trimmed their herds last year because of reduced demand in the recession, and the H1N1 flu, inaccurately labeled the "swine flu." High feed prices, which some blame on ethanol production, also figured into the equation.
But the demand for bacon is fairly constant, according to Chris Hurt, a livestock economist at Purdue University. "What you have with bacon is what economists call inelastic demand, meaning it doesn't vary much," he said. "If a person wants a BLT sandwich and likes that in summer when their patio tomatoes come on, then it doesn't make a difference if bacon is $2 a pound or $6 a pound. They're going to go out and buy it. When it's in short supply and a lot of people want it, they'll pay a higher price."
Unless, of course, they develop a taste for turkey bacon -- but that just isn't the same.