JULY 23, 2001
Hold the Bacon!
Market forces drive its price to record highs
interactive.wsj.com
By Daniel Rosenberg
In August, there's nothing more tasty to many Americans than a bacon sandwich on toast with a little lettuce and tomato.
But this year, BLT aficionados will have to pay the highest prices ever for their favorite sandwich, thanks in part to record-low stocks of pork bellies, from which bacon is made.
Indeed, belly stocks are so thin there's talk that supplies could run out sometime this summer. That probably won't happen, because high prices tend to dampen demand, but bacon has become increasingly inelastic the past few years.
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Crude oil at the New York Mercantile Exchange ended on an upnote Friday after falling to 14-month lows earlier in the week. August futures, which expired Friday, climbed 89 cents to finish at $25.59 a barrel, while September futures, the new front-month contract, rose $1.16, to $25.94 a barrel. Market participants are concerned that OPEC may soon counter falling prices by cutting output by 750,000-to-1-million barrels a day. Some believe OPEC could make its decision in a conference call. Technical analysts now believe nearby crude could test resistance at $26.88 early next week. |
