* Tight hog population pushes bacon prices higher
* Hog numbers seen up less than 1 pct from year ago
* Summer BLT season offers added bacon sizzle
* Hot weather could further crimp hog supplies
By Theopolis Waters
CHICAGO, June 28 (Reuters) - Bacon prices could be hard for U.S. shoppers to swallow this summer.
Analysts said prices for the cured meat used in the summertime favorite BLT -- the bacon-lettuce-and-tomato sandwich -- could soar due to tight supplies of hogs in the United States.
The price of pork bellies, the raw material for bacon, could head higher in the coming months after dropping from record-high levels set last autumn.
Bacon prices last fall approached $5 per lb nationally as pork bellies shot to a record $160 per hundredweight in September because there were fewer hogs around.
Swine producers have been reluctant to expand their herds due to high feed costs after corn hit an all-time high near $8 per bushel nearly three weeks ago. Corn prices have since tumbled 15 percent as investment funds exited the market.
“Tight hog supply ideas, BLT season and the size and extent of this spring’s pork belly price decline makes it more conducive for bellies to rally near last year’s highs,” said Dan Vaught, analyst and owner of Vaught Futures Insights.
There were 64.6 million hogs in the United States in 2010, down 2.2 million from 2009. September 2010 belly stocks totaled 4.8 million lbs, according to USDA data. Analysts said this is far below the average of 14.0 million lbs for that month over the 2001 to 2010 period.
USDA data last week showed May’s pork belly inventory at 56.5 million lbs, up 28 percent from a year earlier but down 6 percent from the 10-year average.
The May belly inventory appears excessive because it was compared with a much-smaller amount last year, Vaught said.
Also, more bellies were likely funneled into warehouses because of extremely high meat prices, including bacon, that curbed consumption, he said.
Bacon use typically spikes during the summer BLT season. That demand tapers off as cooler weather favors sales of other pork cuts, which usually allows belly prices to fall.
However, the scarcity of hogs propelled the price of pork bellies to their second highest level ever in April at $150 per cwt before they bottomed out at $115 by early June.
Pork bellies have since clawed back to $131 as the height of bacon’s summer demand season approaches.
Bob Brown, an independent market analyst, predicts bacon prices will surpass year-ago levels as pork bellies hit $140 to $150 in August due in part to snug hog supplies.
USDA last Friday projected only a 0.6 percent bump in the summer hog supply as high-priced feed keeps a lid on expansion plans.
Rich Nelson, Allendale Inc’s director of research, also expects an increase in pork belly prices over the next few months and sees bacon close to $6 per lb.
He said hogs may be even harder to come by this summer if they are exposed to long stretches of hot weather.
Prolonged periods of sweltering heat slows weight gains in pigs and inhibits their breeding, resulting in fewer hogs for slaughter and less fresh pork for sale.
(Reporting by Theopolis Waters; editing by Jim Marshall)
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