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About Pork Bellies (PB)
Pork Bellies, or the cured carcass of a slaughtered pig, usually
accounts for roughly 15 percent of the carcass weight of the hog.
The belly is removed from the carcass and cured in a heavy salty
brine solution and put in cold storage to eventually be sliced
into bacon. Bacon, the end result of the pork belly, is unique
among meat products in that it has no substitutes. The major factors
affecting pork belly prices is the number of hogs being slaughtered
and the demand for bacon.
The supply of Pork Bellies is dependent on the number of hogs
being slaughtered. The amount of hogs being slaughtered is the
direct result of business conditions affecting the feeding of
hogs. When feed prices are high, hog farmers have a tendency to
slaughter more hogs because their feed costs are rising. The added
supply of bellies then has a tendency to depress pork belly prices.
During periods of low hog marketing, the supply of pork bellies
tends to dwindle, causing prices to escalate.
The price of Pork Bellies are also affected by the number of
pig farrowings, or births. This increase in the herd size of hogs
means eventual increases in the supply of Pork Bellies. It normally
takes between 16 and 20 months for a pig to be mature and be fattened
before it is sent to slaughter. This produces a great lag time
in which one must be constantly watching the past birthing numbers
and herd sizes to get idea of the potential supply which can be
brought to market.
The most important factor affecting the supply and price of pork
bellies is the current live stock situation: feed costs and profitability
considerations, the number of hogs and pigs on farms, and the
birth rate of new pigs. Other important supply considerations
are weekly hog marketing’s at major markets, weekly bacon
slicing, and cold storage figures.
Demand for Pork Bellies is a direct result of the demand for
Bacon. Bacon is unique in the meat market in that it has almost
no substitutes, with the exception of synthetic bacon products
such as turkey bacon, and the like. The demand for bacon is directly
influenced by broad macro population influences, such as income
levels, population growth, and consumer tastes. The population
influences on pork belly demand are slow to change, so the demand
for pork bellies and bacon are relatively static from one year
to the next.
For the first time in several years, the demand for pork bellies
has outstripped supply, even though hog herd sizes and slaughtering
are at record high size levels. This increased demand for pork
bellies is most likely coming from the inclusion of bacon to most
fast food restaurants, as well as increased demand from overseas,
especially the far east.
The major source for demand information on bacon is the weekly
bacon slicing report. This report details how many pork bellies
are pulled out of cold storage and sliced into bacon during a
given week. When the amount of bacon being sliced increases, the
demand for pork bellies is increasing and the price should rise.
The converse is true for decreases in the number of slicing during
any given period
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