[credit provider=”Peter Bright on Flickr” url=”http://www.flickr.com/photos/drpizza/4185942147/in/photostream/”]
The McRib is back—but not to satisfy your taste buds.The elusive sandwich is really just a McDonald’s commodity trade at the right market moment, according to The Awl’s Willey Staley.
The sandwich has been springing up on the fast food chain’s menu since 1981 or 1982, and almost always corresponds with a trough in the price of hogs.
Because McDonalds must buy millions of pounds of pork to support the sale, a small dip in its price could mean huge savings for the company—enough to make the product sufficiently profitable to revive. Such a decision generally coincides with the fall season, which is a cyclical low for hog prices.
Check out Staley’s rough chart of how hog prices correspond with McRib revivals:
[credit provider=”The Awl” url=”http://www.theawl.com/2011/11/a-conspiracy-of-hogs-the-mcrib-as-arbitrage”]
While Staley says he can’t point to more than a correlation here, he argues that there are lots of good reasons for McDonalds to behave more like a trader than a restaurant:
Fast food involves both hideously violent economies of scale and sad, sad end users who volunteer to be taken advantage of. What makes the McRib different from this everyday horror is that a) McDonald’s is huge to the point that it’s more useful to think of it as a company trading in commodities than it is to think of it as a chain of restaurants b) it is made of pork, which makes it a unique product in the QSR world and c) it is only available sometimes, but refuses to go away entirely.
If you can demonstrate that McDonald’s only introduces the sandwich when pork prices are lower than usual, then you’re but a couple logical steps from concluding that McDonald’s is essentially exploiting a market imbalance between what normal food producers are willing to pay for hog meat at certain times of the year, and what Americans are willing to pay for it once it is processed, moulded into illogically anatomical shapes, and slathered in HFCS-rich BBQ sauce.
Don’t miss the rest of his amusing discussion of the McRib at The Awl.