Your Super Bowl Party Just Got More Affordable

Inflation is moderating, but still high! Food prices are outta control! Have you seen the cost of eggs?

Well, not everything in the grocery store is more expensive than it was last year.

Here at Wells $treet, we love to find something that counters the conventional wisdom (who is this “we”?). And we’ve found some good news on inflation heading into the Super Bowl.

Hooter’s Original Style Wings

Chicken is Cheep (heh, heh)

Chicken prices are coming down. The USDA’s latest figures show that retail wing prices are 34%–39% lower than they were a year ago. Wholesale wings are down 64%!

Good news for KFC, Buffalo Wild Wings and Hooters!

A major reason for the price drop is that the bird flu didn’t hit all chicken operations equally. Of the 58 million birds infected by the flu over the last year, 76% were at egg farms — mostly mother hens — but only 5% were chickens raised for meat. “Avian pathologists believe that broilers (chickens are raised for meat) are less susceptible because they are younger in age,” says Tom Super of the National Chicken Council.

Plenty of wings, plus lower prices, means more sales. The chicken council predicts Americans will eat nearly 1.5 billion wings this weekend (from nearly 750 million chickens! #math). That’s a record, though I always raise an eyebrow when an industry predicts its own record.

Yet lower prices aren’t just due to fewer flu deaths.

Too Much Meat

We’ve got a meat glut. Tyson — one of the largest producers of beef, pork, and chicken — saw weak demand for chicken in the last quarter due to unexpected surpluses of beef and pork. “We got hit in the mouth in Q1 because of all the protein on the market,” the CEO told analysts, using a boxing analogy that usually has someone named Tyson delivering a hit to the mouth, not receiving it.

During the pandemic there was a shortage of meat, as processing plants dealt with Covid outbreaks. That’s over, but that’s not the only reason there’s too much meat. As I’ve reported in this newsletter before, ranchers have been warning that low margins due to drought and feed costs convinced some of them to send cattle to slaughter earlier than usual. That has put more beef into the system, and chicken sales have suffered.

Guac Talk

But there’s more good news for shoppers. Remember when buying an avocado meant you couldn’t afford shoes for your kids? Well… the USDA’s latest numbers show that retail avocado prices are down 23% from a year ago — great news for guacamole lovers this weekend.

Squawk on the Street @SquawkStreet

Super Bowl food deflation - we've got some good news and some bad news. Whether it's wings, avocados, cheese, beer or malt liquor - our @janewells and @davidfaber are here to breakdown how much you're saving and shelling out for that Sunday watch party.

Beer Tears

Not everything at the party will be cheaper. Most notably, beer prices are up 7% so far this year, according to Bump Williams Consulting, which follows that sort of thing.

Bump Williams’ CEO Dave Williams told me that one reason for higher beer prices may be that Americans are downsizing how much they purchase, either due to sticker shock or changing habits. Dave says, “If more people shift from 24-pack to 12-packs, that could drive the price of the segment up… as there is less value per ounce on the smaller pack sizes.”

But get this. He also reports that hard seltzer prices are up nearly 10% from a year ago, and malt liquor — MALT LIQUOR — is up 9%. (If you drink malt liquor, please explain.)

Finally, in a move that could qualify for a Wells $treet Dumb & Dumber column, Hormel has released a beer called the Chili Cheese Brew for a limited time, which I’m calling the Chili Cheese Ew. But what do I know about marketing? The beer is sold out, though you can still buy an empty can on Ebay for $19.99.

Ebay

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