Bacon Is Still Sexy In Foodservice

Those watching the belly market received one more piece of insight in USDA’s Cold Storage report last week. Pork belly inventories have been more than 50 percent below a year ago since November of 2016. May marks the 10th consecutive month bellies in cold storage have been below 40 million pounds. This is the longest stretch below 40 million pounds since the cold storage report began in 1973. The second longest stretch was in 1977 for nine months. May also marked the beginning of a seasonal decline in inventory that typically starts in April/May, Figure 1. The markets reacted by adding another $3.84 per hundredweight on Friday to belly primal value.

Belly prices are reaching levels not seen since the height of the PEDv outbreak in 2014. The week ending June 23, 2017, added nearly $18 per hundredweight to the primal value, reaching $182.43. Friday’s price was the highest seen since April 2014, as shown in Figure 2.

This is impressive considering the large volume of hogs being harvested this year. May was up 8 percent from 2016 and year-to-date slaughter is 3 percent ahead of last year, with 1.7 million more animals. Bellies typically make up about 19 percent of the carcass cutout and bacon is a large portion of the belly. This would imply there is more bacon produced this year than last year, leading one to believe this price increase is consumption-driven. So where is all of this bacon going and who is eating it?

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