Spicy sandwiches, hot wings and a labor crunch push poultry prices to records
By Heather Haddon and Jacob Bunge of The WSJ. Looks like a classic case of increased demand and decreased supply causing a higher price. Excerpts:
"Chicken wings are flying off the shelves.
After a year promoting takeout wings and crispy chicken sandwiches, restaurants including KFC, Wingstop Inc. and Buffalo Wild Wings Inc. say they are paying steep prices for scarce poultry. Some are running out of or limiting sales of tenders, filets and wings, cutting into some of their most reliable sales.
Independent eateries and bars have gone weeks without wings, owners say. Chicken breast prices have more than doubled since the beginning of the year, and wing prices have hit records, according to market-research firm Urner Barry.
“The overall supply is constrained. That affects every part of the bird,” Wingstop Chief Executive Charlie Morrison said in an interview earlier this week. Wingstop said it is paying 26% more for bone-in chicken wings this year.
Mr. Morrison said the company is speaking daily to chicken suppliers that are struggling to raise production because they are having trouble getting enough workers. Similar constraints are weighing on other companies across different industries and around the country.
At the start of 2021, chicken looked like a bargain for U.S. restaurants. Closures and dining room restrictions had contributed to swollen stockpiles of chicken in cold-storage facilities. Boneless skinless chicken breast, the poultry industry’s flagship product, last year averaged around $1 a pound, according to Urner Barry. Now boneless chicken breast is trading at $2.04 a pound, the firm said. Over the past decade, the price averaged about $1.32 a pound.
One reason for the higher prices is the chicken sandwich wars of recent years. Fast-food chains including McDonald’s Corp. , Popeyes Louisiana Kitchen Inc. and Wendy’s Co. have introduced new crispy and spicy offerings. More chains plan to introduce new chicken sandwiches in the coming months, including a hand-breaded version that Burger King plans to sell nationally by this summer.
Chris Testa, president of United Natural Foods Inc., said this week the supermarket distributor is seeing chicken prices increase partly because of higher demand from restaurants. Consumers paid about $3.29 a pound for boneless chicken breasts in March, up 3 cents since January and 11% higher than a year earlier, according to the U.S. Bureau of Labor Statistics."
"For chicken producers, restaurants’ growing poultry appetite is driving a windfall and helping offset surging grain prices, which inflates companies’ cost to raise chickens." [higher resource costs reduce supply]
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