This could be a number of things. Umbicial hernias occur midline at the belly button. This is where a bit of the abdominal contents protrude through the umbilical ring. It appears as a soft lump. Small hernias are generally not a problem and will often spontaneously close, but if the opening is larger, an intestinal loop can become trapped and strangulated. Most umbilical hernias are repaired at desexing. If you suspect this is a hernia, you should have your animal examined by a vet. Other possible explanations for the lump include an infection, a foreign body, or trauma. Cancer is very rare in young dogs.
