Hog futures may not reflect it now, but spot pork belly prices have been on a tear since May due to the many creative uses of bacon in restaurants which is helping demand, but also depleting supplies. Hog futures are down .65 cents (CWT) today currently trading at $62.32 per pound at the Chicago Mercantile Exchange.
Late last week, the USDA reported a one-year wholesale price high for pork bellies – nearly $1.70 per pound – with much of this price surge due to a 174% spike since making a five-year low just this past April. Pork belly prices continued to make new lows despite the overall hog surge last year after a brutal virus required producers to cull a reported eight million (plus) piglets.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, had this to say regarding the fundamental assessment of the hog futures markets, “While pork prices were finding a low earlier this year, simultaneously beef prices were making a multi-year high in May creating demand for an alternative meat source.” Craney adds, “It seems as if though bacon is all over the menu’s around town recently with proprietors taking advantage of low pork belly prices.”
The technical trend for hog futures is at a crossroads – the trend is technically “up,” however lower-low prices tomorrow could turn the trend down. In the meantime, many of us can enjoy the benefits of relatively low pork prices while it lasts.
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