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The Bacon Indicator: What Sizzling Prices Say About the Economy
CNBC.com | August 16, 2010 | 02:34 PM EDT

First it was beer , and now — gasp! — bacon prices are on the rise.

The price of bacon has surged 20 percent from last year to more than $4 a pound, according to the Department of Agriculture, which is largely due to a pork belly shortage at peak bacon-consumption season (because tomatoes are ripe right now, which means BLT sandwiches, which means more bacon).

How could this happen, you ask? At a time when America needs bacon more than ever?

It’s the question on everyone’s minds: “What’s Up With the High Price of Bacon?" , Slashfood asks. And the National Review calls rising bacon prices “Obama’s Next Crisis.”

Well hold on to your frying pan because, as it turns out, it’s actually a good sign for the economy.

Hog supplies are low because farmers pared back their herds in the past few years due to the recession. At the same time, demand has started to pick up.

“We’re seeing consumers making their very first step toward taking that luxury item,” said Rich Nelson, director of research at Allendale Inc. “They may not be buying steak instead of hamburger, but they will put bacon on their hamburger or other things,” he explained.

Plus, restaurants, still reeling from the recession, are trying to lure back customers with — you guessed it — bacon. They’re offering bacon on everything from burgers to sandwiches and salads.

But don't worry, America, the nation's bacon crisis is almost over.

Prices typically fall after the summer bacon season, Nelson said — and that will likely be the case again this year.

Plus, farmers are heeding the call and ramping up hog stocks.

“By mid-2011, we’ll start to feel the effects of expansion starting,” Nelson said.

There’s optimism in the bacon community.

“We will have to make some cutbacks, but nothing will keep us from enjoying bacon!” said Jason Mosley, creator of the Mr. Baconpants blog and co-host of the Bacon LIVE podcast.

He cautions bacon lovers against going for subpar bacon in these lean times.

“Your BLT deserves the best bacon you can afford!” Mosley exclaimed.

(Mosley and co-host Sean Brett discuss rising bacon prices in their latest podcast — it’s about 3 minutes in.)

And Heather Lauer, author of the Bacon Unwrapped blog and the book “Bacon: A Love Story,” sees bacon as a beacon of hope.

“Maybe — just maybe — bacon will lead us out of this difficult time in the U.S. economy, which would absolutely solidify bacon’s place in American history as the best meat ever,” she said.

Oh, and mark your calendars: Sept. 4 is International Bacon Day .

Pony Treats (Now in Bacon Flavor!):

The Patron Saint of Bacon. Did you know there was a patron saint of bacon? Here’s one for your desk — or shrine.

Bacon-ography. How good is your baconography ? Do you know when bacon was invented? When it became popular? How many people would rather have bacon than sex? These are the things you’re going to need to know before they’ll allow you in the Royal Bacon Society .

Bacon-Wrapped Tater Tots. OK, let’s stop talking about bacon and start eating: Bacon-wrapped tater tots , maple bacon cupcakes and — wait for it — bacon beer . You’re welcome.

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