Bacon Demand Is Higher Than Ever As Price Volatility Grows

Includes: COW, UBC


         Difficulty hedging over the long term.

         Fresh bacon index sheds light on supply/demand.

         Fading memories of belly futures llory days.

         Volatility hurting pork belly buyers and sellers.


By Bruce Blythe, CME Group

via Seeking Alpha - Jun. 4, 2019


At A Glance


         Amid robust restaurant, retailer demand, bacon "far and away the most volatile" of all hog cuts

         New CME Fresh Bacon Index establishes transparent price reference for fresh pork bellies


Ask Chicago butcher Bill Begale to name his top-growing products in recent years, and you get a quick answer.


"Bacon, bacon, bacon," said Begale, who runs Paulina Market, a popular meat retailer on the city's North Side. "It's a big thing for us. You can do anything with bacon."


Demand has been so strong over the past five years that Paulina Market expanded its bacon offerings beyond its standard, pork-based varieties, Begale said. The store also sells English bacon, lamb bacon, veal bacon and beef bacon. Paulina Market even experimented with "bacon soup," he said.


What's behind Americans' seemingly insatiable appetite for all things bacon? "It's the flavor," Begale said. "It enhances everything you do with it."


Begale is one example in a vast ecosystem of retailers, wholesalers, restaurants and others serving markets for one of the fastest-growing foods over the past two decades.


The pork industry has ramped up pork belly production to all-time highs amid robust demand from food service locations.


In 2018, ready-to-cook belly production totaled a record 3.43 billion pounds, up 2.6 percent from 2017 and up almost 13 percent from 2008, according to Steiner Consulting Group, which cited USDA data. Production is forecast to rise another 2.9 percent in 2019, according to Steiner Consulting.


Difficulty Hedging Over The Long Term ...


Fresh Bacon Index Sheds Light On Supply/Demand ...


Fading Memories Of Belly Futures Glory Days ...


Volatility Hurting Pork Belly Buyers And Sellers ...


Bacon: It's On The Menu ...


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