Did the Cancer Announcement Affect Bacon Demand?

On October 26, 2015 the International Agency for Research on Cancer (IARC) — an agency within the World Health Organization — released its report indicating that processed meat is carcinogenic.  

The announcement sparked a lot of media coverage with titles like: "Bad Day for Bacon".  (Here were my thoughts shortly after the announcement, along with some survey responses based the news).

Despite the news coverage after the announcement, I haven't seen much investigation of whether it impacted meat markets.  Thus, I thought I'd take a look at the data, recognizing it is probably impossible at this point to conclusively identify whether the IARC report caused a shift in demand.

I turned to the USDA Ag Marketing Service's daily reporting of pork primal composite values.  Rather than just looking at what happened to the prices of bacon (or rather pork belly) in isolation, it is probably useful to look in relation to another cut that may be less affected by the announcement.  I chose the pork loin.  This is an attempt to control for any changes over time happening on the supply-side (the quantity of loin from a pig is, at least in the short run, in fixed proportion to the quantity of pig belly).

I calculated the ratio of pork belly prices to pork loin prices over the past year.  The graph below shows the price ratio before and after the IARC announcement.  In the few weeks before the announcement, bellys were selling at 1.9 times the price of loins.  In the few weeks after the announcement, bellys were selling at only 1.5 times the price of loins.  Thus, there has been a roughly 26% drop in the relative value of bacon. 

At this point, I'd be hesitant to say that the IARC announcement is THE cause of this change, but the large immediate drop just following the release date is suggestive of some impact.