Transforming our Ag Commodities: The NFL and Chicken Wings

Tonight is a seminal moment in the culture of North America.  I say that because last Thursday night as I wrote this, the NFL is kicking off its season with the game between Baltimore and Denver.  You can argue any which way about sports in North America but the NFL is King.  Baseball is what it is to our American friends and hockey is a religion in Canada but the NFL is a huge business.  With only 16 regular-season games a year it concentrates all of its season into a compact package played mostly on Sundays that fascinates many.  Simply put, people really find NFL football compelling.

It also has an agricultural component, something that I’d never really thought of before.  That is, during the NFL season our American friends eat chicken wings like they are a staple.  In fact on an annual basis Americans eat 1.23 billion chicken wings.  Consumption increases during the NFL season as the market for chicken wings does have that seasonal component.   Just think of all the soybean meal that those chickens need to consume.  Combine chicken wings the NFL and soybean meal and you have an agricultural marriage, which I really never thought about before.

I have been very aware for quite some time that the closer you can get agricultural commodities to the consumer’s dinner plate the more money you make.  Unfortunately, with corn wheat and soybeans, they are not very palatable to consumers taste without further processing.  However, everybody likes a nice thick juicy steak or some really good barbecue pork chops, to say nothing about some crispy bacon.  Our livestock producers are extremely close to the consumer’s plate and they always have great radar and respect for what the consumer wants.  It just so happens that over the last several years those consumers have been eating a lot more chicken.  The NFL example is only one cultural event that boosts chicken demand.

According to Statistics Canada in 1980 Canadians on a per capita basis ate 16 kg annually.  In 2012 that had ballooned to 30 kg annually, almost doubling our consumption over that period of time.  Is not too hard to figure out why.  Yes, price is always a function of the consumer’s decision-making process.  However, packaging chicken products whether it is as a chicken wing, chicken finger or chicken nugget has much to do with that.  Go to any restaurant whether it’s in the United States or Canada and you will find all kinds of chicken on the menu.  That explains in many ways why there has been an explosion of consumption of chicken over the last couple of decades.

I find that so interesting, just like I find the two-for-one pizza deals so important for tomato product demand.  Sometimes, a commodity isn’t necessarily a commodity but with the little positioning becomes a very wanted product.  For instance, back in the day I used to eat fried chicken cooked at home.  That took much preparation but in 2013 there is chicken packaged and served very easily on demand almost anywhere.  That is led to the explosion in demand, just like any two-for-one pizza would boost tomato demand.  Yes, chickens might be an agricultural commodity but segmenting that commodity into different consumer segments, which are easy to eat, goes a long way to not only boosting chicken farmers incomes but also increasing demand in spades.

Of course it is all a good thing.  Those chickens eat a lot of soybean meal.  Now, you can buy chicken wings at any pizza joint, corner store or just about anywhere.  McDonald’s is now launching their own version of chicken wings.  Of course they are launching them just in time for the NFL season.

In Canada we certainly have our own issues with chicken production.  It is the quota system under our supply managed agricultural system.  In the United States it’s completely different, let’s just say I don’t want to get into that.   With demand for chicken exploding over the last few years our Canadian industry has certainly had its challenges.  I’m sure there’s quite a few chicken wings devoured at Grey cup parties.

It all goes to show the demand for certain agricultural commodities like chicken can be nurtured, segmented and repositioned into something that at one time we couldn’t even dream of.  25 years ago if you had mentioned chicken wings with the NFL it probably wouldn’t have registered.  25 years later the NFL is a very important part in the demand component for chicken.

Of course a lesson learned is that maybe some of our other agricultural commodities could turn into those “chicken wings” of tomorrow.  For instance, how about a “soybean latte” at Starbucks?  You get the picture.  The road ahead is not necessarily about supply, supply, and more supply for our agricultural commodities.  Like chicken wings, sometimes demand can be nuanced to tame supplies.  The NFL and chicken wings are one example of that.  As an industry, agriculture must seek this out more.