Better with bacon

07.26.17

A national craving for bacon is pushing U.S. pork-belly prices to record highs, reports the Wall Street Journal.

Prices for the part of a hog used to make bacon have risen around 80% this year, while frozen reserves are at a six-decade low. Americans bought around 14% more bacon at stores in 2016 than in 2013.

Once considered an unhealthy byproduct of a hog, bacon has become a guilty pleasure amid a broader embrace of fatty meats. Appetite for beef and bacon typically swells ahead of a boost from Memorial Day and Independence Day holiday grilling. Wholesale beef prices followed that seasonal trajectory this year, falling from a mid-June peak.

Some analysts say bacon, meanwhile, is becoming a yearlong staple that consumers are eager to procure. That voracious demand has left wholesalers in a squeeze and producers are struggling to keep up.

The national hog herd rose to a seasonal record of 71.7 million head in early June, according to the U.S. Department of Agriculture (USDA), up 3% from a year earlier. But it hasn’t been enough to meet bacon demand.

Stocks of pork bellies in commercial freezers fell to 31.6 million pounds in May, down 59% from a year earlier and the lowest figure for the month since the USDA began keeping track in the 1950s. (Source: The Wall Street Journal))


Articles are chosen for summary in this Market Intelligence blog based on newsworthiness in conjunction with The Infinite Loop themes. Any opinions and views expressed in the articles are generally those of the underlying author from the source listed, are not necessarily current as of the date of this blog, may change as market or other conditions change, and may differ from views expressed by Ivy Investment Management Company and its associates or affiliates. Actual investments or investment decisions made by Ivy Investment Management Company and its affiliates will not necessarily reflect the views expressed in the articles. These articles are distributed for educational purposes only and are not investment advice or a recommendation to purchase, sell or hold any specific security mentioned in the article or to engage in any investment strategy. Investment decisions should always be made based on each investor’s specific financial needs, objectives, goals, time horizon and risk tolerance. Securities discussed may not be suitable for all investors.