CHICAGO, Ill. – A U.S. Department of Agriculture report March 19 gave numbers to back perceptions that American consumers are eating more pork.
The USDA report showed U.S. frozen belly stocks, which are the raw product for bacon, at the end of February were 57.035 million pounds, under the low end of pre-report estimates of 58.5-61 million lb. Stocks were up from 38.3 million lb. last year but down from 63.1 million at the end of February.
“When you consider the fact that February pork production was three percent over last year and the hog slaughter in February the largest on record, you have to believe that the usage for bacon in the month of February was phenomenal,” said Chuck Levitt, senior livestock analyst with Alaron Trading Corp.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
Levitt said the decline is in direct contrast to the past five years that had an average rise of 4.7 million lb. Last year three million lb. of bellies were stored.
Analysts attributed the strong bacon demand to its growing use as a sandwich topping as well as high protein diets. Bacon was even coming back in style for breakfast.
“The biggest surge for the bacon, I think, is directly related to the Atkins diet because of bacon and eggs for breakfast,” said Travis Benson with Crystal River Capital.
“You are going to start using up a lot of bacon if you can get people back to that rather than eating cereal.”
Other parts of the storage report also showed surprising declines, despite record pork production in February and bans on U.S. beef exports. Many Asian countries have banned beef due to BSE.
Poultry exports have also been banned due to avian flu disease. Pork has replaced that lost protein.
“It seems like pork is the only meat that hasn’t been affected by some (disease) outbreak,” said Benson.
Total U.S. pork stocks declined 26.9 million lb. during February. The five-year average had been an increase in pork stocks during February of 17 million lb. Last year, seven million lb. were stored, analysts said.
“The low-carb high-protein diets are obviously embracing all the meats,” Levitt said. “Also, I really have to believe that we are probably exporting at a record clip.”
But hog futures may only have a small upward influence from this report as the market looks ahead to this week’s quarterly hog and pig report. The hog report has much more influence on futures, they said.
