CME Fresh Bacon Index

Track the price of the fresh bellies used to produce bacon with the CME Fresh Bacon Index.

The CME Fresh Bacon Index, brought to you by CME Group – where the world comes to manage livestock and meat production risk – calculates the price of one load (40,000 lbs.) of fresh, derind bellies in cents per pound (or dollars per cwt.). The index combines negotiated and formula transactions to give an indication of the supply and demand of bacon. 

Key Benefits

  • Easily track supply and demand dynamics of bacon transacted on the spot cash market
  • Monitor and compare the CME Fresh Bacon Index to the CME Lean Hog Index and the CME Pork Cutout Index
  • Access a weekly publication of the CME Fresh Bacon Index with our other Cash-Settled Commodity Index Price Reports

Contact Us

Jim Sullivan
Manager Commodity Research & Product Development
Jim.Sullivan@cmegroup.com
+1 312 930 2308

Sarah Calhoun
Director of Agriculture Products
Sarah.Calhoun@cmegroup.com
+1 312 338 2888

How to Calculate the CME Fresh Bacon Index

The CME Fresh Bacon Index is a weekly weighted average of the prices for fresh, derind bellies in the weight categories of 7-9, 9-13, 13-17, and 17-19 pounds.

Data are collected by the U.S. Department of Agriculture (USDA) and published in its “National Weekly Pork Report FOB Plant – Negotiated Sales” (LM_PK610) (exhibit 1) and its “National Weekly Pork Report FOB Plant – Formula Sales” (LM_PK620).

The USDA also publishes prices for fresh, derind bellies daily in its “National Daily Pork Report FOB Plant – Negotiated Sales – Afternoon” (LM_PK602). While that report is an important daily reference, it is not used in the calculation of the CME Fresh Bacon Index.

To calculate the index price, the weekly number of pounds is multiplied by the weekly price in each weight category from both the LM_PK610 and LM_PK620. Those results are summed to determine the total weekly value. The weights from each category from both reports are summed to determine the total weekly weight.

To determine the CME Fresh Bacon Index value, divide the total weekly value by the total weekly weight. The result is a weekly weighted average of fresh, derind bellies quoted in cents per pound.

Example Calculation

Weekly Index ending on Friday, December 7, 2018

Negotiated Sales (LM_PK610)

Derind Belly 7-9#

Derind Belly 9-13#

Derind Belly 13-17#

Derind 17-19#

Pounds

Price

Pounds

Price

Pounds

Price

Pounds

Price

3,614

$143.72

957,318

$152.92

1,048,913

$150.28

139,850

$141.82

Formula Sales (LM_PK620)

Derind Belly 7-9#

Derind Belly 9-13#

Derind Belly 13-17#

Derind 17-19#

Pounds

Price

Pounds

Price

Pounds

Price

Pounds

Price

240,542

$153.97

6,071,771

$156.38

7,979,498

$154.84

540,206

$144.99

 

Total Weekly Weight

Total Weekly Value

Weighted Average Price

16,981,712

2,624,786,384

$154.57

The total weekly value of 2,624,786,384 is divided by the total weekly weight of 16,981,712 to obtain the Index price of $154.57.

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