Falling Prices in Select Markets: Bacon and SSDs
The “Baconpocalypse” Ends
The long-term trend of elevated bacon prices in the United States has concluded. According to data reported on July 21, 2022, bacon prices have returned to more normalized levels following years of high costs. The decline in bacon prices over the 12-month period leading up to that date was described as record-setting. By June 2014, bacon prices had reached a peak of $6.12; since that time, prices fell by 17.1%. This represented the fastest 12-month decline in 23 years, with the exception of an 18.3% drop recorded in May 2015. The stabilization of these prices follows years of supply chain challenges that began between 2012 and 2013, when high feed and fuel costs made raising pigs more expensive. These issues were compounded in 2014 by a virus that significantly reduced the U.S. pig herd. Commodities traders have also reflected this shift, with futures contracts for lean hogs on the CME trading 37% lower than the highs observed in March 2014.
Rapid Price Declines for SSDs
The technology sector has seen a sharp reduction in the cost of Solid State Drives (SSDs). Driven by a glut of NAND flash memory and reduced manufacturing costs, prices for these drives have fallen significantly over the past two months. A recent survey of 21 popular 1TB SSD models revealed that 17 had lower prices compared to January 3, 2023. The average price cut for these 1TB drives was 23%.
Price Trends for Popular 1TB SSDs
| Drive Model | Recent Price | Price Cut |
|---|---|---|
| WD Black SN770 | $59.99 | 33.34% |
| Crucial P3 Plus | $54.99 | 31.25% |
| Intel 670p | $49.99 | 28.58% |
| Samsung 870 Evo | $64.98 | 27.79% |
While analysts had predicted a 50% price drop by mid-2023, manufacturers have attempted to limit supply to prevent financial losses from idle production facilities. Despite these efforts, consumers have benefited from the excess inventory, particularly in the 1TB segment. Notably, the fastest drives on the market, such as the Samsung 990 Pro and the WD Black SN850X, saw little to no price fluctuation, maintaining their premium status.
Contextualizing Economic Volatility
While bacon and SSDs have seen price relief, these localized trends exist within a broader, more complex economic environment. Inflation remains a persistent concern, staying above the Bank of England’s 2% target. Analysts suggest that rising inflation may continue to squeeze fiscal headroom and increase borrowing costs. Furthermore, the relationship between commodity prices and consumer costs is not always direct. For example, while the price of a barrel of oil fell by approximately 20% in the month leading up to recent reports, gasoline prices in parts of Canada and the United States moved in the opposite direction. This paradox was attributed to specific supply-side constraints, such as refinery shutdowns in Washington state and Ohio, which limited the availability of fuel despite consistent consumer demand. As of the most recent reports, market analysts emphasize that the refining market remains tight. Disruptions, including fires and maintenance at key facilities, have caused wholesale gas prices to spike in specific regions, demonstrating that even when raw material costs drop, localized supply chain issues can prevent those savings from reaching the consumer at the pump.
