Market Watch: Bring on the bacon

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The pork cutout value reached a record level in late June, thanks in large part to record pork belly prices. Wholesale belly prices exceeded $180/cwt the last week in June. Of course, belly prices are driven by the demand for bacon. For the time being, bacon is highly popular as a flavor enhancer for sandwiches and salads. This spring, per-pound retail bacon prices averaged 16 percent higher than boneless pork chops and 20 percent higher than boneless ham. In the spring of 2000, bacon averaged only 76 percent of the price of boneless pork chops. Bacon prices usually peak in late summer with “BLT” (bacon, lettuce and tomato) season. 

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New Record

USDA’s June pig inventory survey said the national average for pigs per litter was 10.31 during the March-May period, which indicates a new record. The increase in pigs per litter is more important to the size of the pig crop than changes in sow numbers. Over the last five years, the number of pigs per litter has increased 9.9 percent, while litters farrowed has decreased 4.3 percent. Over the last six years, the rate of increase in pigs per litter has been triple that of the preceding six years.  

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Imports Decline

The number of hogs being imported from Canada is declining. More than 10 million hogs and pigs were imported during 2007. A bit more than half than many are expected to be imported this year. At the current time, about 350-400,000 weaner/feeder pigs are imported monthly. That is down from the peak of 717,176 imported during January 2008. The number of slaughter hogs is running 60-75,000 head per month with cull sows typically outnumbering barrows and gilts. The decline is due in large part to a smaller Canadian sow herd. The number of sows in Canada was 18 percent lower at the start of 2013 than in January 2008.  

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