A crispy rasher of bacon is becoming an increasingly costly indulgence in the US, where a surging appetite for pigmeat and cutbacks in farmers' swine herds have pushed the price of pork cuts to an all-time high.

On the Chicago Mercantile Exchange, the cost of pork bellies, which are used to produce bacon, has risen by more than 65% in the last 12 months and the wholesale price of pig product hit $1.35 per pound last week – its highest on record.

Analysts say farmers reducing pig herds during the recession, together with swine flu and high feed prices, took their toll. Meanwhile, demand is on the up as consumers trade down to bacon from more expensive meats, while seasonal use reaches a summer peak.

"The supply of slaughter hogs in the US is much lower than a year ago," says Chip Whalen, a risk manager at Commodity & Ingredient Hedging, a consultancy in Chicago. "There's a lot of additional usage of bacon – the BLT is very popular at this time of year and a lot of restaurants feature bacon on their menus in salads and sandwiches."

The surging commodity price has found its way into US supermarkets. The Bureau of Labour Statistics reported last month that retail prices for sliced bacon reached a 30-year high of $4.04 per pound in US cities in June, an increase of 18 cents on the previous month.

British bacon fans are feeling less of a squeeze. Most British pork is either domestically produced or imported from Denmark. BPEX, which tracks the pork market in Britain, said prices had been rising this summer but were still below last year's peak. In the four weeks to 16 May, British consumers spent £93m on bacon, up 9% year-on-year.

"We're really a beef and poultry consumer market. But during the recession, as the economic downturn has gone on, people have substituted to pigmeat and pork products," said James Park, a senior analyst at BPEX. "A lot has been done in the media on how versatile pork is, how it can be used as an alternative for pricier cuts."

Traditionally seen as a stalwart of thrifty cookery, bacon has changed in use over the years and is increasingly seen as a way to add a little zest to burgers and lunchtime dishes. But in the US, pig farmers suffered two consecutive years of losses as grain rocketed in cost and swine flu took hold – causing a dip in consumer demand despite no scientific risk of human contagion, plus a ban on US pork exports to China.

"We've had some producers go out of business," said Dave Warner, a spokesman for the US National Pork Producers' Council who welcomed the recent upturn in demand. "Maybe we're getting word out that a lot of cuts of pork are lean, healthy and nutritious."

Bacon remains a culturally sensitive issue, with pork meats shunned by certain religious faiths. Ibrahim Hooper, a spokesman for the Council on Islamic-American Relations, chose carefully when asked his reaction to rocketing bacon prices: "It's the kind of thing where if we say 'yeah, it's good news', people will say that Muslims want others to suffer, so I'm not going to go down that road."