Chicken wing risk management

Here’s something I did not know: the supply of chicken wings are a function of the demand for chicken breasts. Chickens are grown for the breasts.

It seems poultry production was cut this year for the first time since 1973 because of a decline in demand for the white meat, and as a result the supplies of chicken wings have fallen, driving up the price. I suppose this makes sense since chickens only have two wings.

According to the article in USA Today, “wholesale wings cost about $1.55 a lb this week in the northeastern United States, while boneless chicken breasts were at $1.12 a lb. Two years ago chicken breasts were about 10% more expensive than wings. The price inversion, where breasts are cheaper than wings, may last longer as consumers eschew higher-end restaurants.”

A poultry economist expects this to revert next year as the economy picks up and people start spending more on fancy restaurants.

From a risk management perspective, bars better place their orders now to make sure they have enough supply for the Super Bowl!

On a related point, the best wings in the Greater Toronto Area are found at All Star Wings & Ribs.



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