The notion made financial sense because pork bellies can be frozen for up to a year. Pork producers might protect themselves not only against seasonal swings in bacon demand, but also from other supply shocks such as hog production decreases.
The increased interest in buying and selling pig bellies eventually led to the establishment of a pork belly futures contract on the CME.
Traders looking for arbitrage opportunities started trading futures contracts to purchase and sell standardized amounts of pork bellies. A typical lot consisted of a 40,000-pound frozen slab with individual slices weighing eight to 18 pounds. These standardized contracts created a clear market for pricing pork bellies and conducting business for merchants, slaughterhouses, and manufacturers.
The seasonal trends of bacon consumption have become less prominent over time. For a variety of reasons, Americans began eating more bacon all year:
- More Americans moved south as a result of migration and population trends, to states with less significant seasonal weather fluctuations.
- The United States’ rapidly rising Latino population has spurred year-round demand for pork products, particularly bacon.
- The food service business is providing more recipes with pig bellies as Americans eat out more.
- A key industry group, the Pig Board, is pushing the consumption of a variety of pork cuts, including pork bellies.
- Pork bellies are in high demand due to the growing popularity of Asian dishes like banh mi.
The uncertainty of seasonal bacon demand may have contributed to the CME pork bellies futures contract’s extreme volatility and waning interest.
How can I purchase pork futures?
Pork Bellies futures are traded on the Chicago Mercantile Exchange (CME). Prices for CME Frozen Pork Bellies futures are quoted in dollars and cents per pound, and lots of 40000 pounds are traded (18 metric tons).
Is it still possible to buy pork belly futures?
“Chicago Mercantile Exchange Inc. Delisted Its Frozen Pork Bellies Futures and Options on Frozen Pork Bellies Futures Contracts,” according to the CME Group. On the 9th of September, 2021, I was able to get a hold of some information.
What is the best way to invest in pork belly futures?
Pigs can be purchased in two ways: as a lean hog futures contract (which is a contract for the hog’s carcass) or as pork bellies (traders’ slang for “bacon”).
What is the best way to trade lean hog futures?
CME offers lean hog futures contracts on the Globex trading platform, which can be traded electronically through Schwab. Trading lean hog futures requires a futures account that has been approved.
What is the market for pork?
Lean Hog (HE) futures are contracts for the sale and purchase of 40,000 pounds of hog meat per contract that are traded on the Exchange. In addition, the CME launched the Fresh Bacon Index in 2019, which establishes a price for 20,000 pounds of fresh port bellies. Futures contracts, on the other hand, do not exist.
How much do pork bellies cost these days?
Pork belly that has been chopped into slices about an inch and a half thick is available at Costco. The shipments typically weigh around six pounds and cost around $5 per pound as of July 2021.
Why You Want Sliced Belly
I enjoy that I can simply cube these slices for a pan of pork belly burnt ends, and I also feel that working with six pounds of belly is easier than working with a ten or twelve-pound full belly.
Finally, I adore the fact that I can see how meaty or fatty each package is before I purchase it.
Everyone has a different opinion for how much fat they want in their stomach, but I prefer mine to be a little meatier.
How do you buy pork belly?
Where can you get pork belly and how do you get it? Pork belly is easier to get by than you might think! It can be acquired whole or pre-sliced in bacon and pancetta form from your local butcher or grocery store. Alternatively, browse some of our favorite online meat providers below.
Is it still possible to trade pork bellies?
The CME declared in 2011 that it will no longer trade pig bellies. The product was no longer relevant to financial markets due to extreme volatility and diminishing trader interest.