Food & Beverage

Wing supply wanes as commodity prices gain

Those percolators of pizza brand sales nationally, known as chicken wings, are running short of demand, causing prices paid for the favored edibles to go up as suppliers struggle to keep up. Meanwhile, rising pizza commodity prices are also helping to put pressure on operators' bottom lines.

Photo: iStock.

April 26, 2021 by S.A. Whitehead — Food Editor, Net World Media Group

The term, "on a wing and a prayer" has taken on new meaning for the many pizza restaurateurs who depend on chicken wing orders to flesh out their sales. That comes as the result of a nationwide shortage in the commodity that has helped to double prices over the past year and left some pizza operators resorting to those less costly and more plentiful amalgams of chicken breast meat, known as boneless wings to fill the void, according to WLTX-TV in Columbia, South Carolina, a big chicken-producing state.

Wings have been little darlings of the carryout and delivery-prone pandemic customer, which has helped drive up wing sales in the last year a full 7%, according to NPD Group. Much of the impetus behind the current reported shortage of wings is due to America's outright culinary love affair with wings, along with a poultry industry doing its level-best to keep up with demand. Experts predict the cost of the coveted chicken appendages are likely to go up before poultry producers can catch up with demand and thus return prices for the commodity to more reality-based levels.

"The industry is experiencing some supply challenges," Sara Matheu, US Foods spokeswoman, told the news outlet. "Meat processors are having a hard time keeping up with increased demand due to a variety of challenges."

But wing prices aren't the only pizza restaurant commodity taking flight of late, since cheese, wheat and even fuel prices all rose over the past week, as well. The silver lining in that cloud is that most pizza brand stock prices also grew in value over the trading week.

Pizza stocks

Domino's bumped up its value over the week's trading, growing $2.74 to close Friday at $397.71. Louisville, Kentucky-based competitor, Papa John's, also made gains in last week's trading, adding $1.24 by Friday at the close to end up at $94.84. Pizza Inn and Pie Five parent, Rave Restaurant Group, inched up about a nickel in value last week to come in Friday at the closing bell on the Nasdaq at $1.35.

In fact, the only pizza player that shaved a smidge off its value last week was Pizza Hut parent, Yum Brands. The multi-brand company dropped slightly from $118.08 the previous Friday's close to $117.72 on April 23 at the close.

Cheese

Weekly averages for both barrels and blocks on the Chicago Mercantile Exchange gained, with barrels averaging nearly 9 cents higher over the week at $1.79, while blocks gained less than a cent on average, also at $1.79, according to the U.S. Department of Agriculture. Barrels closed at $1.81 for the week, while 40-pound blocks came in just under that at $1.79.

Cheese availability has varied by region and within regions, but barrel producers have begun reporting strength in demand, as well as a limit regarding supply. The Chicago markets exhibited some of the strength in barrel markets this week, as barrel prices overtook block prices on Tuesday after a 6-cent bounce, U.S.D.A. said.

Wheat

Wheat prices trended higher last week, with spring wheat leading the pack. At the Minneapolis Grain Exchange, futures rose nearly 13 cents to $7.21 on spring wheat. Volume estimates fell slightly.

May Kansas City hard red winter wheat prices picked up nearly 7 cents to come in at $6.74, while Chicago soft red winter wheat increased nearly 3 cents to almost $7.13.

Auto fuel

The American Automobile Association that over the last business week, gasoline prices edged up a penny to $2.88 on average nationally. Analysts report that although nationwide demand for gas grew to 9.1 million barrels a day over last week, stocks also increased 100,000 barrels to 235 million barrels, helping to stave off large pump price increases. In fact, AAA said last week's demand estimate is one of the highest since March 2020, when social distancing restrictions were established that dramatically reduced gas demand, and is in line with typical spring driving season rates seen pre-pandemic.

Ohio led the states with the biggest weekly increases in gas prices where the cost of a gallon of regular grew 12 cents on the week. Michigan came in second highest with 7-cent higher prices per gallon, followed by Nevada, Kansas and Washington, which all averaged 5-cent increases last week.

Today, the average national price for a gallon of regular stood at $2.89, up a total of 2 cents from the price a week and a month ago. Mid-grade ($3.23) and premium ($3.49) were up 2 cents and 1 cent, respectively. Meanwhile, diesel fuel prices remain steady over the week at $3.08, while at $2.46, E85 rates grew 3 cents over the week.

Natural gas

Natural gas spot prices also grew nationally for the latest report week on record that ended April 21. The U.S. Energy Information Administration said the increasing costs come as a response to growing demand.

At the New York Mercantile Exchange, the price of the May 2021 contract increased 7 cents, from $2.62/MMBtu (1 million British thermal units) to $2.69/MMBtu over that same stretch. The price of the 12-month strip averaging May 2021 through April 2022 futures contracts climbed 6 cents/MMBtu to $2.90/MMBtu.

The average weekly price of propane fell 8% week over week, while prices of butane and isobutane fell by 3% and 4%, respectively. The prices of natural gasoline and ethane rose by 3% and 1%, respectively, as recovery in the petrochemical sector continued following winter storm disruptions that shuttered a large share of capacity in mid-February.

About S.A. Whitehead

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Pizza Marketplace and QSRweb editor Shelly Whitehead is a former newspaper and TV reporter with an affinity for telling stories about the people and innovative thinking behind great brands.