U.S. Gift of $10 Million in Pork Bellies to Poland Likely to Stir Market : Recent talk that pork would be part of the aid package has lifted futures prices.

Pork belly futures are likely to rise today on the Chicago Mercantile Exchange, analysts said, in the wake of a Bush Administration announcement that the United States will donate about $10 million worth of surplus pork bellies to Poland.

The bellies, used to make bacon, will be part of an overall package of $108 million in food aid designed to alleviate severe food shortages in that country. In the past month, rumors that pork would be part of the package have rocketed pork futures prices in Chicago.

Agriculture Department officials said Friday that they would ship between 7,000 and 10,000 metric tons of the meat to Poland during the winter.

The “donation will help ease food shortages and high prices facing the Polish people at this time,” said Agriculture Secretary Clayton K. Yeutter.

“In consultations with USDA officials, the Polish government requested pork product donations to help meet current critical food shortages in that country,” he said.

So far, the United States has shipped butter and sorghum to support the fledgling democracy of Poland. Additional commodities to be donated include corn and wheat.

Agriculture Department officials said the pork bellies would be donated through the Food for Peace program, which allows the use of U.S. commodities in countries making commitments to introduce or expand free enterprise elements in their agricultural system.

The National Pork Producers Council made the original suggestion that the government give surplus U.S. pork bellies to Poland as food aid and as a way to help reduce a price-depressing glut in the market.

Current U.S. pork belly stocks of about 50 million pounds are 17% above 1988, though down nearly 50% from last month’s record level because of improved demand.

The Agriculture Department does not store surplus pork, but will have to buy the bellies soon through tenders on the open market for shipment in winter when the Polish food shortage is expected to worsen.

Trade analysts have said that if the Agriculture Department buys the entire amount of pork in one lump sum, it will have a significant effect on prices in the domestic cash and futures markets.

If the purchases are stretched out, they will have little effect on prices.

During a news conference earlier Friday, President George Bush said that while the United States is commited to helping Poland meet its food needs, additional aid will be contingent on economic reforms by the Warsaw government.

“One of the things that is absolutely essential is reform of their systems: they have got to move toward market economies,” Bush said.

“Otherwise we’re simply putting money down a rat hole,” he added.