Chicken Wing Spot Prices Collapse 30% As NFL Protests Take Their Toll
Back in November, shortly after Trump ignited a war with the NFL over player protests of the National Anthem, Papa John’s insisted that their sales were getting crushed by a backlash from fans who decided to boycott games (we covered it here: Papa John’s Pulls NFL Ads Due To “Negative Consumer Sentiment”). That said, the complaint from Papa John’s was seemingly discredited as a convenient excuse for poor earnings the very next day when Pizza Hut said they had seen no impact from the NFL protests.
Of course, with all of the noise of seasonality, weather and random accounting games played by CFO’s, it’s almost impossible to know if, or by how much, declining NFL viewership actually impacted Papa John’s earnings…any conclusions would be ambiguous at best.
That said, what doesn’t seem to be all that ambiguous, and probably should lend some credence to the original claims from Papa John’s, is the startling collapse in chicken wings prices that coincided perfectly with Trump’s first NFL protest tweets back in September. According to the Bloomberg data below, wing prices started dropping almost immediately after Trump’s first tweets and have fallen a staggering 30% since.
Meanwhile, the collapse in wing prices was at least partially blamed for the abysmal earnings posted by one of the largest poultry producers, Sanderson Farms, earlier this this morning.
Asked for their profit outlook for 2018, SAFM management, whose stock tumbled 12% on the day, seemed to be somewhat optimistic aside from crushing traffic declines at wing restaurants which they said are being attributed to the NFL protests.
Analyst: That’s helpful. And then when you look at your pricing outlook and your profit per pound outlook for 2018 versus 2017. Any color in terms of pricing and your profit per pound?
SAFM Management: Based on what we, the productions, we think is coming in 2018. You never know who’s going to be running features on chicken and tenders. But the only thing that is puzzling me right now wings, we this – the wing, we have been talking to our wing customers and they’re the ones that are telling us that they’re seeing less traffic in their stores and they attribute that to the NFL.
So what say you…just more scapegoating for a bad quarter or is the NFL taking a bite out of the wing market?