Bellies get Gutted

Bacon prices collapsed this week, losing nearly 20% in value over two days. Bacon tracks an industry market known as “pork bellies” which represent the frozen cut of meat that bacon is made from.

The market is dropping after a massive run-up due to shortage concerns. Pork belly inventories are down 77% over the last year and are at the lowest in at least 60 years. This means that discounts at the store may be short-lived.

Pork belly futures were once the wildest futures market, known for treacherous swings that could make a trader wonderfully rich or bankrupt in a flash. Sadly, the market for bellies was closed in 2011, which sent belly traders to the lean hog futures market instead.