re: Cancelled food items that were a huge mistake

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TigerstuckinMS

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Not PRECISELY, because of the way the pork market works (mainly due to the massive utility of the delicious pig), it is not cost-effective for fast food to carry pork products outside of breakfast menus. Given the absolutely MASSIVE competition in the pork market and the amount of product someone like McDonalds requires, if they got into the pork game for real, the price of pork would skyrocket and then McDonald's couldn't make money selling sandwiches for $3.

So, McDonald's knows EXACTLY how long it takes for them to ramp up production of the McRib and then waits until the pork markets are going through cyclical "mini-crashes". Then they start watching futures prices and when the price of contracts drops low enough for them to make a profit at normal sandwich prices maturing at a date far enough out for them to prepare for production by the time they have to take delivery of the pork they bought, they come in and buy a shite TON of pork futures. McDonalds comes in, places demand on pork, the price of futures drive back up in response, and then McDonalds quits buying futures. At this point, McDonald's knows how much pork it will be getting and exactly when they'll be getting it (because futures are sold on a basis of delivering precisely X amount on precisely Y date) so they can plan their marketing campaign and production (that stuff doesn't come naturally on the pig like that, you know) around the futures they bought and make themselves a tidy profit.

The American pork market and the McDonald's McRib have a weird symbiotic relationship. Lower market prices drive McDonald's production and the scale of McDonald's production results in higher market prices.

It's got a very predator/prey equation type thing going on.

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