Why Our Chicken Wings Are Flying Off the Shelves

Panic buying has flipped to the supply side. Instead of you and me emptying supermarket shelves, now, it’s the manufacturers.

Our story starts with chicken wings.

Supply Shortages

Chicken

At the beginning of the pandemic, chains like Buffalo Wild Wings wanted us to buy their chicken wings. Ideal for takeout, fast food wing sales were up 33 percent during the 12 months since the pandemic began. Applebees had an online only wing brand and the chicken sandwich wars were heating up.

Predictably, on the farm, it is taking awhile to respond. Chickens have to be incubated, hatched, and grown. (And, they just have two wings.) Building new barns, buying extra feed, and hiring more labor take time and money. But the Akron Beacon Journal says that “production seems to be ramping back up.”

It makes sense that prices increased:

Lumber

Like chicken, it’s tough to accelerate the lumber supply. The problem here is new home demand that is fueled by low mortgage rates. While builders had the incentive to produce more, sawmills were constrained by the pandemic. Add wildfires, tariffs on Canadian softwood, and even the wooden pallets that appliance shippers need and you have supplies dipping and prices rising. (We should note that they have just begun to ease.)

Below you can see difference from February to May, 2021:

Foam

Foam is a chemical story that is slowing our deliveries of mattresses, couches, and car seats. It takes us to the polyol and TDI producers in Texas and Louisiana that foam is made from. From what I could figure  out, the foam chemicals are transported to the foam makers by railcars and tanker trucks. Once the pandemic began, chemical production slowed. Then, just when they realized demand was way up, a once in a hundred year winter storm hit the area in February. Temporarily, all shut down.

Our Bottom Line: Supply and Demand

Aware of shortages and afraid of inadequate inventory, producers are over-ordering. Then, making it all worse, factories had fewer employees, container ships no longer carried what we needed, Texas had its power shutdown, the Suez Canal closed, the Colonial Pipeline was hacked.

The result?  Transport and storage costs are up:

Alternatively, as economists, we can show supply shortages by shifting our supply curve to the left. As a result, price is up and quantity is down:

Looking at this supply shortage graph, please imagine chicken wings, lumber, foam, and a slew of other commodities that range from plastic to tin and coffee.

My sources and more: Bloomberg had the long list of shortages. But because every story is different, I went to WSJ for chicken wing facts and learned about lumber from Insider. Lastly, I found out about foam from this woodworking blog.