McDonald's Wings Disrupt Chicken Market: Setyan

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Aug. 28 (Bloomberg) -- Nick Setyan, analyst at Wedbush Securities, talks with Betty Liu about how McDonald's addition of wings to its menu has impacted the price of chicken. He speaks on Bloomberg Television's "In The Loop."

Interests worldwide, -- you cannot protect all your interests worldwide.

You have too many, and so do we.

Exactly, and commissioner kelly said yesterday he is dying down hatches and being very careful, given what is happening in syria.

Not getting a sense that there is a way out of this, we have pretty much hit the point of no return each year.

It corrects i think that judgment is probably right.

We're on the track -- the wrong track and we are at the point of no return.

President obama was absolutely right in the early stages of this to be extremely cautious.

And i can't understand how he has been maneuvered into the present position.

And some have said, should there have been more died at a time?

-- more done head of time?

Should more have been done in the last few years?

It is hard to know going backwards.

We are where we are and we will have to let the that was the play itself out.

But we have to get away from firing rockets at people in getting back toward some kind of dialogue and at least with those who have serious interests.

The russians have serious interest in syria.

Not just the naval base, but it is its last name -- its last reliable ally in the middle east.

And they do not want to see islamic interest influence their a, which could have implications for russia and its neighbors as well.

We should respect those interests.

It sounds like it that were to happen it would be chaos in parts of that region.

When this strike happens, will use the statements coming out from russia, from iran?

What will happen after this?

Of course, you will see that, but you'll also see some of the casualties that this has caused in syria.

It is cynical for us to be proposing a security council resolution based on protecting civilians when the aim is to fire dozens of rockets, which are bound to kill some civilians.

I think we will be getting some very unwelcome photographs, first of all.

Thank you, andrew green, the former u.k. ambassador to syria.

Staying in europe, market kearney is making its first public speech as the head of the bank of england -- mark kearney is making his first public speech as the head of the bank of england.

We will take you live to that event.

You can also stream at on our live event channel at bloomberg.com.

They may not know how to read or write, but toddlers can now send texts.

It these diamonds might look better in blue, like those being auctioned off in hong kong.

? collects a chicken prices are expected to fly higher.

You can find the answer in the golden arches.

Mcdonald announced yesterday that the world's largest restaurant chain is going to offer mighty wings.

Here is what the fast-food giant head chef told me about the prospects for chicken wings.

Is that something that could go national?

Banos?

It could.

It -- who knows?

It could.

Wings were in our menu a few years ago.

It corrects what is the reception for the wings?

Gregg's wonderful.

-- wonderful.

Correct now we know they are rolling them out nationally.

Just how high could be sticking when prices go?

It you put it to the national checking council, they are betting mighty wings could increase prices by 11%. if you look at the index that tracks chicken wings, wholesale prices sold by processors in georgia, where about $1.40 on monday.

That is about one-third below the record high of over $2 at the end of january.

Now they think that they may climb to $1.60 over the next few weeks because of my the wings.

Mcdonald's will be moving over to a hundred 50 million wings through stores in september.

-- over 250 million winds through the stores in september.

That is a lot of wings.

That is historically quite pricey, $1.40 for wholesale wings.

If you look back, there was a very sharp run-up in prices at the end of 2011. prices just about doubled at the end of 2011, from 80¢ adewuya up to $1.50. some say that mcdonald's is behind the move.

If they decide to buy the stock, it can turn the tide of the whole industry.

Another issue is feed prices.

The cost of corn is much cheaper this time that it was this time last year.

It is difficult to gauge exactly what will happen to prices, because we do not have a clear picture of mcdonald supply.

They could be sitting on a lot of frozen wings.

And this is the beginning of football season and chicken wings are very cyclical.

Correct right, they tend to rise in price -- right, they tend to rise in price at of football season.

I want to bring in an equity analyst.

He thinks mcdonald's of entering into this category is a misguided decision and will not be a permanent menu item due to the high costs.

The high costs, by the way, which you believe an fraudster about themselves.

You believe they were behind this spike in -- which you believe that mcdonald drove up themselves.

You believe there were on the spike in prices in 2011. as mcdonald's becomes a player, the prices are going to go up.

Some of that may have simply been the expectation.

Certainly, all of it will be due to mcdonald's, in my opinion.

We are talking 2011. we're talking about sitting on wings for about 18 months.

It is that common?

Even if they did not start buying by 80 months ago, they were certainly in the market, having a conversation -- 18 months ago, they were certainly in the market, having a conversation.

If mcdonald's did that, i would not be so surprised.

I'm just think about what would be eating 18 month old chicken wings.

You are certainly eating four-month old chicken wings, at least.

Are prices going to spike up, given its rollout?

It all depends on whether they put this on the permanent venue or whether it is -- the permanent menu or if it is a limited time offering.

This replaces the monopoly promotion, which they moved forward a few months.

If this does work and they put on a permanent menu, or they continue this every year, that this month -- this may resolve woodford.

But you do not think it is going to be permanent.

Yes, because i think they underestimated their own impact on the wing costs.

When you look at wholesale prices, that includes things like delivery.

And 90¢ a pound all the way up to $2.35 per gallon.

-- per pound.

They have already bought all the supplies they need and have been freezing it about four months ago, which is why i said it at least four months old.

I know you cover several other companies and restaurant chains that do focus on chicken.

Buffalo wild swings, i believe, you said is the biggest after mcdonald's in terms of chicken wings.

Our wings a higher margin business for these restaurant chains?

Swings are certainly a high- margin business.

However, they are very volatile.

Buffalo wild winds stock price has gone up and down.

About 64% of their sales are wings, but traditional and chicken breasts, the boneless wings, and alcohol.

And about 42% that are just the wings.

It makes it a very big percentage, about 30% of their sails, traditional wings.

Thank you.

Coming up, the car industry in the fast lane these days.

We will talk to the chief executive of toyota.

And we will also talk about tablets that are targeted at taiex.

? time for today's this reverses that, a battle of social relevance for leading men.

Boggs cited by the data on the hit tv show "full house " and he was also the host of america's funniest home videos for many years.

His clothes on youtube -- his clips on youtube have been seen 3.5 million t. that is a better social rap sheet than his former colleague john stay most.

Also known as uncle jesse, he has many followers, but has focused more on his tv career.

For now, saget is winning on the social front, but that could all change if stamos is on the next "dancing with the stars," which is currently in the rebel.

-- in the rumor mill.

A social media users, skewing yoghurt and yoghurt these days, and now -- the the the social media users are younger and younger these days and now the tablet wars are focusing on toddlers.

They're competing for preschoolers and taxing.

Kids are really interested in devices.

Leapfrog and v tech are the leaders in this area.

They are for these devices that allow filtered content to might you will, on the internet.

The new versions of these devices allow testing in some cases of these pre-made freezes.

-- phrases.

Both of these retail for $100 to $150. these are what they will push for back-to-school and holiday season.

54% of tablet users do let their kids use the tablet.

There is -- it is not surprising there is a targeted market for the younger kids.

I cannot keep a hold of my ipad.

They use it at all the time.

The other tablet makers, are they getting in on this?

They are not.

They say is too expensive and too risky.

There are focused on apps.

Samsung did announce it is releasing a new tablets that goes on sale next month and then you have amazon marketing the candle -- kindle as a family device.

And you also have tablets are less well known in the markets.

Thank you.

We will be back in two.

? it is about 56 minutes after the hour, which means bloomberg markets -- bloomberg is on the markets.

Equities were up yesterday.

We are on the markets in 30 minutes.

Coming up, microsoft shareholders have something more to look forward to it, more than just a replacement for steve ballmer.

We will look at that when we come back.

?

This text has been automatically generated. It may not be 100% accurate.

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