Mandan News

Don’t fear, there will be wings

Extension Livestock Marketing Economist
by Tim Petry

Specific meat products often are associated with traditional holidays and events. Examples include turkey at Thanksgiving, beef for Father’s Day, lamb for Easter and Passover, and hot dogs at baseball games.

Super Bowl 2014, the National Football League’s championship game, will be held on Feb. 2. A very popular meat item for this highly touted sports event is chicken wings. According to the National Chicken Council’s 2013 Wing Report, more than 1.23 billion wing portions were consumed during the Super Bowl 2013 weekend. There was even a rumor prior to the big game that there would be a shortage of wings.

The rising popularity of chicken wings is an interesting success story and also an interesting lesson in economics. Economists discuss how changing supply and demand fundamentals affect prices. Like many other agricultural commodities, wing prices have been volatile.

There are several rumors about how the chicken wing craze started. Credit often is given to the Anchor Bar in Buffalo, N.Y. After closing one night, owner Teressa Bellisimo realized that she had quite a few leftover chicken wings. At that time, wings were the least desirable cut of chicken, so they were hard to sell and sometimes thrown out or used to make stock for soup. Her son had warned her he was bringing some hungry college friends over for a late-night snack, so she decided that might be a good way to get rid of the ill-favored wings.

She is rumored to have deep-fried the wings and then added her homemade hot sauce. The young men liked them so well that she added them to her regular menu and the rest is history.

That is where the name “buffalo wings” came from. And “buffalo” is now a recognized sauce used to flavor many other food products. Several national restaurant chains, including Buffalo Wild Wings, have menus centered on the once hard-to-sell wings.

Buffalo even hosts an annual National Buffalo Chicken Wings Festival. This year, it will be held on Aug. 30-31. The popularity of chicken wings has grown nationwide during the past several decades. That increased demand caused prices for wings to increase. Wings even have become popular menu items at pizza shops, fast-food restaurants, sports bars and casual dining establishments.

Wholesale chicken wing prices (Northeast – truckload) reported by the U.S. Department of Agriculture’s Agricultural Marketing Service averaged 50 cents per pound in the late 1990s. Prices increased to a record high of 205.62 cents per pound (chicken is traded in cents, not dollars) for January 2013. Interestingly, the once hard-to-sell wings were the highest priced wholesale chicken cut in January 2013. Wholesale skinless, boneless chicken breast prices were much lower at 136.51 cents per pound. It is no wonder that boneless wings (made from breast meat) recently have become popular with retailers and consumers. Furthermore, chicken processors were looking for additional sources of wing-type products.

Young chicken production peaked in 2008 at 8.9 billion birds, according to the USDA’s National Agricultural Statistics Service (USDA-NASS) and declined to about 8.4 billion in 2012 and 2013. In contrast, 7.4 billion young chickens were produced in 1995.

Many agricultural commodities exhibit distinct seasonal price patterns because supply and demand change throughout the year. Chicken wings are no exception. The Super Bowl demand for wings usually causes seasonally high prices in January. In some years, the seasonal decline in prices after January is dramatic because demand wanes but production ratchets up.

For example, in 2005, wing prices fell from 123.25 cents per pound in January to 78.95 cents in August. In 2008, there was a price change from a January high of 121.62 cents down to 96.84 in August. In 2013, prices fell from the January record high of 205.62 cents per pound to 158.24 cents in August.

At 125 to 130 cents per pound, current wholesale wing prices are much lower than last year’s record high but are strengthening as demand picks up for the game. Because more wings are being made with breast meat, the availability of traditional wings has increased and pressured prices. Boneless, skinless breasts at 145 to 150 cents per pound are above last year’s price and back above wing prices. In the latest Cold Storage Report issued by the USDA-NASS, stocks of wings in storage warehouses are 29 percent higher than last year. Meanwhile, chicken breast stocks are 16 percent lower than last year.

Even though wholesale wing prices are lower than last year, it does not necessarily mean prices will be lower at restaurants because they cannot change menu prices as quickly as wholesale prices change. Wing menu prices also include other cost items such as labor, building overhead and supplies.

Regardless of the wing wholesale price, some restaurants advertise special wing prices for the Super Bowl to lure in customers. The idea is to sell more beverages and other food products.

So rest assured that there will be plenty of wings and other delicious food for you Super Bowl fans. Enjoy the game!