* 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 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
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.
SCARCE HOGS TO LIFT BACON PRICES?
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
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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Keywords: HOGS PORK BELLIES