By Joanna Newman
HOT weather and US government intervention have been the two driving forces behind a strong rally in pig and pork belly prices this month.
An extreme heatwave across the midwest spells bad news for pig farmers who are struggling to add weight to their herds and bring live pigs to market.
There are reports of shrinking short-term supply as a result of 100°F-plus temperatures and expectations of slower slaughter rates.
Meanwhile the sweltering conditions are also discouraging retail demand for pork products.
The US Department of Agriculture has finally awarded its 50,000-tonne pork tender under the Russian food aid programme, after first indicating the planned shipment back in October 1998.
The purchase has added further fuel to the market this week. Meanwhile the federal government has also stepped up its pork purchasing for the school lunch programme.
These developments, coupled with the drought-like weather conditions, have helped drive the volatile Chicago August pork bellies contract to 59.6¢/lb (87.5p/kg) on Tuesday, 3 August.
The contract has almost doubled in the past three weeks and is now at its highest level since early May.
The more stable lean hog contract for the current month has managed to continue its steady climb which commenced at the start of the month, gaining about a cent on the week to 49.7¢ (73p/kg) on Tuesday.