By Benjamin Parkin 
 

Frozen pork-belly stocks in June were the lowest on record, as sizzling demand for bacon kept reserves tight and prices high.

The U.S. Department of Agriculture said Monday that stocks of pork bellies in commercial freezers fell to 22.29 million pounds as of June 30, down almost 30% from a month earlier and 65% from the same time last year. That was the lowest for June since the USDA began keeping records in the 1950s.

Analysts said prices for pork bellies, which have climbed to fresh records, were approaching a point at which some consumers could start to turn away, helping replenish stocks.

"If the retail prices climb anymore than they already have," said Mike Zuzolo, president of Global Commodity Analytics & Consulting in Atchison, Kansas, "you're going to find that elasticity."

Total pork stocks as of June 30 fell 4% from last year to 562.97 million pounds, while stocks of cuts like hams and loins rose.

Hog futures fell ahead of the report, as lower cash-market prices offset the bump from rising pork-belly costs. August-dated lean-hog contracts at the Chicago Mercantile Exchange fell 0.9% to 80.375 cents a pound.

Total beef stocks, meanwhile, were down 10% from last year at 416.68 million pounds.

The reduction in beef stocks was positive for prices, analysts said, even as traders grapple with the prospect of a growing cattle supply. The USDA said on Friday that the total number of cattle on-feed rose 4% from last year to 10.8 million head as of July 1, while placements in feedlots rose well above expectations at 16%.

Cattle futures on Monday fell sharply. CME August feeder cattle contracts fell 2.9% to $1.4845 a pound, the bottom of their daily trading band, while August live cattle fell 2.2% to $1.13875 a pound.

Write to Benjamin Parkin at benjamin.parkin@wsj.com

(END) Dow Jones Newswires

July 24, 2017 16:54 ET (20:54 GMT)