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The difference between pancetta and prosciutto is similar to the difference between American bacon and ham, in that they are both preparations of different cuts of pork. Pancetta is essentially Italian bacon, which comes from the belly of the pig and is cured; unlike American bacon, it is not smoked after curing. Prosciutto is an Italian ham that uses a pork leg, which is cured and dried for a period of time typically between several months and up to two years. This means that the major difference between pancetta and prosciutto is that each comes from different portions of a pig and they each require different curing and drying times to prepare.
For most food lovers to understand the difference between pancetta and prosciutto, it is typically easiest to comprehend how each type of meat is prepared. Pancetta begins with pork belly, which is the same cut of meat used to make American bacon and the two foods are somewhat similar. The pork belly is typically cured using a combination of salt and curing salts that often contain sodium nitrate. This curing process changes the meat so that it becomes an inhospitable environment for harmful bacteria.
After the pork belly has been cured for about a week or so, then it is typically hung in a cool, damp room for several weeks so that it can dry sufficiently. This gives the pancetta a signature flavor, which is somewhat similar to American bacon. Unlike bacon, however, the pancetta is not smoked after it is cured and dried, which allows it to have a different flavor.
Prosciutto is prepared in a way somewhat similar to pancetta, though there are noteworthy differences. The cut of pork used to make prosciutto is typically a hip, similar to the cut used to make ham. The prosciutto is cured much like pancetta, but the curing process often takes several weeks due to the much thicker cut of meat used. Once cured, the prosciutto is hung and allowed to dry and age like pancetta, but this process often goes for months or even years.
While both pancetta and prosciutto are cured and aged, the process is much longer for prosciutto and that produces two pieces of meat with substantially different flavors. The pork belly used to make pancetta is also much fattier than the leg used in prosciutto, which results in different flavor and texture. Another major difference between pancetta and prosciutto is the way in which they must be handled prior to eating. Pancetta is much like bacon and typically needs to be cooked before it can be safely eaten, while prosciutto is frequently eaten uncooked, though it can also be fried and eaten.