Hog futures in Chicago approached a five-week high amid dwindling pork supplies that have sent grocery store bacon prices to record levels.

At today’s close, lean hog futures for August delivery rose 1.15 cents to 83.375 cents a pound, up 2.1 percent since the end of June and the contract’s highest settlement since June 25.

Prices may have additional upside because some U.S. meatpackers are reducing hog slaughter this week, possibly in an attempt to “break” a recent uptrend in cash prices, said Dennis Smith, an analyst with Archer Financial Services in Chicago.

“Slaughter is definitely going to take a dip,” Smith said Wednesday.

Bearish traders contend meatpackers are pulling back on slaughter in response to weaker pork demand, Smith said. But according to the bullish camp, which includes Smith, a slaughter slowdown largely reflects a lack of supplies with the recent Midwest heat wave slowing hog shipments.

 “It doesn’t make any sense to cut back on slaughter, given profitable margins” for meatpackers, Smith said. “The hogs are just not available. The hogs simply are not there.”

Through yesterday, U.S. hog slaughter totaled 764,000 head, down 0.8 percent from 770,000 for the same period last week, according to USDA data.

Among top U.S. pork processors, Hormel Foods Corp. is slaughtering at "full schedule," or near full capacity, at its three plants this week, company spokeswoman Julie Craven said in an e-mail. A spokeswoman for Smithfield Foods, Inc., the biggest U.S. pork processor, said the company doesn't comment on daily operations.

Representatives for two other major processors, JBS USA and Tyson Foods, Inc., didn’t respond to messages.

Today’s strong close in August hog futures today signals a potential rise to around 85 cents a pound, Smith said. August hogs reached 85.1 cents on June 22 and notched a life-of-contract high of 87.35 cents April 23.

Hog prices have almost doubled over the past 12 months after high feed costs and slumping exports in recent years led to widespread herd reductions, forcing processors to bid more aggressively for shrinking animal supplies.

Earlier this year, the hog breeding herd, an indicator of future pork supplies, fell to a record low. At the end of June, nationwide frozen pork supplies were down 22 percent from a year earlier.

Consumers are paying more for pork as a result. Retail pork averaged a record $3.104 a pound during June, up 5 percent from a year earlier, according to Bureau of Labor Statistics data.

Bacon, in particular, is getting increasingly pricey. At the end of June, frozen stocks of pork bellies, which are sliced into bacon, were down 54 percent from a year earlier, according to USDA data. Belly supplies usually decline during summer, when bacon, lettuce and tomato sandwiches are most popular.

During June, retail bacon averaged $4.046 a pound, up 12 percent from a year earlier and the highest monthly price in records going back to 1980.

Recent pork price increases are “fundamentally different” from 2008, when surging exports and a record crude oil rally propelled a similar upswing, livestock analysts Steve Meyer and Len Steiner said in a July 20 report.

“This year’s increases are being driven by lower supplies resulting from the run-up in feed costs over the past four years,” the analysts said.