Demand increase not surprising due to Super Bowl, but magnitude of price increase notable.

February 4, 2019

2 Min Read
Wing prices boost chicken industry profitability
National Chicken Council

The chicken industry has been struggling since the second half of the summer quarter in 2018, but demand for fresh wings leading up to the Super Bowl has recently provided a boost for the sector, according to the Livestock Marketing Information Center (LMIC).

LMIC said wholesale prices for wings and breast meat during the period plunged to the lowest values in years as consumption was unable to keep up with increased production, leading to oversupply.

“Industry economics vary depending on bird size, product form and distribution channels,” the group said. “The majority of production goes into deboned and further-processed products, and this is where problems have been most severe.”

According to LMIC, fresh, bone-in tray pack business for grocery stores and smaller birds aimed at rotisserie dinners as well as cut-up fast food felt a normal seasonal squeeze on demand during the late-year holiday season. However, the negative economic returns were short term in nature.

“Signs of a turnaround in product values in the further-processing sector began to take hold in mid-December, however, and the rebound has been sustained into late January,” the center said.

LMIC reported that wholesale chicken wing prices in mid-December averaged $1.40/lb., down from $1.65 a year earlier, but they have gone up every week since then. USDA data show that wing prices averaged $1.81 for the week of Jan. 26 in the Northeast U.S. market.

While the increase in demand is not surprising as this typically occurs leading up to the Super Bowl, LMIC said the magnitude of the price increase is notable. 

Wholesale breast meat prices have also moved higher -- from 85 cents/lb. in early December to $1.02 during the latest week -- in the Northeast U.S. market. The early-December market was 17% lower than a year earlier, but the current value is only down 5% from a year ago, LMIC noted.

“The supply side of this market warrants some credit for pushing chicken prices higher," LMIC said. "Disrupted processing schedules due to the timing of Christmas in the middle of the week and winter storms had an impact on December production.”

According to LMIC, there was no week in December that registered an increase in production compared to the same week in 2017.

“Production in the last week in December was down 14%, and the four weeks with Fridays during the month had production that came in 5% below a year earlier. Production in the latest four weeks is up 1.3% from a year ago, supported by bird harvest that is up 1.7%,” LMIC said.

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