Every year, right around September, consumers confront a pricing shift for an unexpected commodity: chicken wings. In the fall, as the U.S. football season gets started, demand for the appetizers keeps growing, until it hits a peak during the week of the Super Bowl. The supply of the product is relatively limited though—a chicken can only have two wings—which means prices for the snacks jump.
This year, in addition to maintaining its annual tradition of dipping wings in sauce on Sunday afternoons, the market is experiencing another bump from a new source. McDonald’s has announced plans to introduce chicken wings for a limited time, between September and November. It also released projections that it will sell approximately 250 million orders. Even before the McDonald’s Mighty Wings have appeared on any menus, prices thus have jumped, based mainly on predictions.
Of course, in anticipation of its menu addition, McDonald’s also started stockpiling its inventory of wings. Accordingly, the price changes have been dramatic in the wholesale market, up from approximately $.90 per pound to just over $2.
The McDonald’s effect is not limited to wings either. Since the fast food giant added apples to its menu, this perishable markets has seen substantial price increases. The impact is only logical. When McDonald’s started buying apples, it immediately became one of the largest apple purchasers in the world.
Furthermore, prices for chicken breast meat continue to rise, for two related reasons. First, McDonald’s has expanded its use of this cut meat in menu items such as wraps. Second, when the prices for wings go up, chicken farmers raise the price of breast meat too, because it would be inefficient to raise chickens only to sell the wings.
Analysts suggest though that, unlike apples, wings will be temporary guests on the McDonald’s menu board, not permanent residents. The company’s influence on the wing market has been so intense that it might have priced itself right out of its supply!
Source: Venessa Wong, “Why Is Chicken More Expensive? Ask McDonald’s,” Bloomberg BusinessWeek, August 28, 2013