New Castle News

September 7, 2012

With drought, football snack prices take wing

By Tony C. Dreibus
Bloomberg News

— A six-minute drive from Ralph Wilson Stadium, home of the Buffalo Bills, Duff's Famous Wings partner Phil Kinecki is worried by two things: the team's performance and the price of chicken.

An eighth straight losing season for the Bills, who haven't made the playoffs since 1999, would hurt the restaurant's sales, and the cost of chicken wings, a game-day staple, has almost doubled in the past year. Bars in Buffalo, N.Y., popularized deep-fried wings in the 1960s, and Duff's sells about 1,200 pounds of them when the Bills play, 50 percent more than most days.

Food items popular during the football season, from corn chips and burgers to nachos and wings, are rising after the worst drought since 1956 damaged crops and increased the cost of feeding livestock. Tyson Foods and other poultry producers have cut output, boosting prices for buyers as the NFL starts its first full weekend of games on Sunday.

"Chicken-wing prices are high, but they're going to get worse," Kinecki said in his Buffalo-area restaurant. "A bunch of our vendors said they're expecting rises in chicken and beef prices. We're pretty worried about it."

Wholesale wings were at $1.855 a pound Wednesday, up from 90 cents a year earlier, and in March reached $1.90, the highest on record at the Department of Agriculture. Kinecki said he is paying $2.12 a pound compared with $1.09 a year ago.

Ingredients for nachos are up 20 percent in the year through July and near an all-time high reached in March, according to an index compiled by Bloomberg of monthly prices for corn chips, beef, processed cheese and pinto beans tracked by the Bureau of Labor Statistics. Corn and soybeans reached records in the past month, and global food costs tracked by the United Nations jumped 6.2 percent in July, the most since November 2009.

Americans eat about 25 billion wings annually, industry data show.

"You're not going to see the 99-cent wing promotions like you used to," said John Davie, president of Boston-based Dining Alliance, which represents about 10,000 U.S. restaurant companies. He predicted the price of wings will probably reach $2 a pound this year.

"People are still out and restaurants are still busy, but revenues still may go down because people are more conservative about how much they're spending and how much they're going out," Davie said.

The price of wings sold at restaurants and supermarkets usually falls after the Super Bowl in February and the NCAA basketball tournament in March, said Tom Super, a spokesman for the Washington-based National Chicken Council. That didn't happen this year because producers cut output to limit losses from surging feed costs.

Buffalo Wild Wings, a chicken-and-beer dining chain based in Minneapolis, said the cost of its wings in the quarter starting July 1 will be 68 percent higher than a year earlier. That compares with 3 percent for all other commodity costs.

While the U.S. chicken industry returned to profit in January after months of losses amid a supply glut, production declined in the first half of 2012 and rising feed costs threaten to erode profit margins, according to Stephens Inc., an investment bank in Little Rock, Ark.

Deep-fried chicken wings were dubbed Buffalo wings because they were first served in 1964 at the city's Anchor Bar, according to the National Chicken Council. Teressa Bellissimo, the bar's owner, would fry leftover chicken wings in hot sauce for her son and his friends and they were so popular she put them on the menu.

Kinecki, at Duff's Famous Wings, said suppliers haven't told him the price of wings for the rest of the year.

"You know everything's going up, but the problem is how do you plan for it if you don't know how much," Kinecki said. "You're trying to keep the customer happy, but you have to stay in business."

Another unknown is how the Bills, who play their first regular-season game Sunday against the New York Jets, will fare: The success of the team, which has never won an NFL championship, will determine how many people visit the restaurant, he said. The Bills lost all four preseason games this year, after winning six of 16 games last year and tying for last in the American Football Conference-East.

"The better the Bills do, the more people want hang out with fellow fans," Kinecki said. "You'd like to be optimistic, but then the preseason comes and they look crummy."