Chicken prices were elevated across the board from spring 2021 through last summer, with many records falling along the way. A burst of output and product availability compounded by stronger-than-normal erosion in seasonal demand forces left the complex reeling last fall, and weakness extended through winter.
With input costs still quite elevated, the collapse in product values left integrators in a difficult spot. Wholesale chicken demand was suddenly in a position of historic weakness following a period of historic strength. As headline markets such as boneless skinless breast meat and wings remained on a sluggish trajectory into spring, industry stakeholders found themselves in an increasingly desperate situation.
Moving deeper into 2023, however, clear signs of demand recovery have finally emerged in the complex, but it is primarily “secondary” markets like tenders and boneless skinless thigh meat leading the way.
Tenders encroach on territory held by traditional wings
For many years, a popular trend in the foodservice industry was the emergence and expansion of wing-centric restaurants.
More recently, it seems, tender-centric restaurants have dominated chicken-based growth in the fast-casual space. This aligns with studies suggesting that millennials and those in Generation Z, cohorts that are increasingly heads of households and primary drivers of restaurant traffic, prefer tenders, whether marketed directly as such or as “boneless wings,” over traditional bone-in wings.
With a favorable demand landscape in place, tenders didn’t have much trouble finding support after getting sidetracked late last year. According to the U.S. Department of Agriculture (USDA), spot wholesale prices for tenders averaged approximately $1.05 per pound during the first few weeks of 2023. By late August, tenders were being quoted in the $2.10s, practically doubling over an 8-month stretch. Additionally, this rally left tender prices very close to the prevailing average from the last three years (2020-22) of $2.18 per pound.
Positive response to thigh meat as well
Being more of a retail cut, boneless skinless thigh meat doesn’t receive quite as much fanfare as tenders, but it has been well-received by consumers with increased exposure. What this part of the bird potentially lacks with respect to “cutability” when compared against boneless skinless breast meat is more than compensated for by the fact that it tends to be more “forgiving” on the grill (i.e., not so easily overcooked) and is generally perceived, along with other cuts of dark meat, as having a better taste profile than boneless white meat.
The USDA reported wholesale quotes for boneless skinless thigh meat of less than $0.75 per pound to close out 2022, but this market has averaged more than $1.40 per pound since late July, which is a little better than the 2020-22 average of $1.33 per pound. As of late August, spot prices for boneless skinless breast meat were still running more than 10 percent below the 2020-22 average for this market, and wing prices were still down more than 30 percent from the most recent 3-year average. Industry stakeholders are certainly hopeful that favorable trends in the tender and thigh meat channels ultimately spill over into these other product categories.
