Ham Futures

An article in today´s Wall Street Journal (subscription required) documents how hundreds of Americans are being forced to become outlaws due to overzealous government intervention. What, you may wonder, are these outlaws doing to run afoul of U.S. law? Drugs, perhaps? Prostitution? Well, none one of the above. Their offense is none other than their love of ham -- jamón ibérico to be exact. Due to the fact that none of the slaughterhouses in Spain are certified by the U.S. Department of Agriculture, sale of the coveted ham is prohibited in the U.S market.

However, an entrepreneurial family in Williamsburg, Virginia is betting on the eventual legalization of the sale of jamón ibérico in The U.S. and have begun selling “ham futures” through their web site latienda.com. For a $199 deposit, one can purchase the right to buy one of the coveted hams once their sale is legalized in the U.S. Thus far, latienda.com has sold 120 of these “ham futures”.

Restrictions on imports have turned otherwise law-abiding Americans into international ham smugglers. Andres Aguirre, a software engineer in Belmont, Mass., says he got a few slices past the dogs at John F. Kennedy airport customs after a visit to Spain a few years ago. The hounds were distracted by a larger ham stash in another passenger's bag, he says. Mr. Aguirre has purchased futures in two hams.

People who carry jamon into the U.S. face federal prosecution under the Animal Protection Act -- which aims to keep diseases away from American livestock -- and possible 10-year jail sentences and/or $50,000 fines. But the USDA says it is unaware that anyone has been prosecuted for jamon offenses. While Spain is disease-free, it is classified by the U.S. as posing some risk for classical swine fever and foot-and-mouth disease.

Nicholas Gutierrez of Smithtown, N.Y., got a taste of jamon last year at a local Spanish restaurant whose chef, a friend of his, served him an illicit slice. Mr. Gutierrez says he invested in a ham future two days later. "My family says I'm out of my mind," he says.

His hope of getting his hands on a legal ham rests on the shoulders of the Harris family, owners of Latienda.com, in Williamsburg, Va. Don Harris, who fell in love with Spanish cuisine in the 1960s when he was stationed in Spain as a Navy chaplain, launched the company with his wife and three sons in the mid-1990s. It has bothered them for years that while they have been successful selling everything from paella rice to saffron, they cannot offer what they consider the Holy Grail of Spanish food.

The trick is to prove to Spain's skeptical jamon makers that an eager U.S. market awaits them if they will just bend their age-old practices to conform with U.S. regulations.

So, two years ago, the Harrises decided to pre-sell the ham on their Web site. For the $199 deposit, customers get the right to buy an iberico as soon as U.S. regulatory hurdles are overcome. Since Spain's output is so small -- about four million hams a year -- futures holders are basically paying for guaranteed delivery in the event that U.S. demand outstrips supply.