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Arbitraging Pork - Predicting When The McRib Will Appear

By Hank Campbell in Science 2.0
December 1, 2011
Profile picture for user Hank
Submitted by Hank on Thu, 12/01/2011 - 02:52
Old NID
85131

You may have seen recent McDonald's commercials for its "McRib" sandwich - that means it is back again, just like it has risen from the dead for the last 30 years.  What is a McRib sandwich?  No one knows; it is Chicken McNuggets, except made of pork.   Young people love the things for the same reason some people loved Sigue Sigue Sputnik when I was young; people like things if they become so bad they are good.

The McRib, like bad music, does not appear on any predictable schedule - it isn't like a Shamrock Shake, coinciding with a holiday about persistent alcoholism.   So why does it keep appearing?

Willy Staley at The Awl says the appearance of the McRib isn't random marketing at all - it's an arbitrage strategy.  Basically, it seems McDonald's may be acting as a 'market maker' does in a stock; buying when no one else will buy. If the price of pork gets low, McDonald's buys it up and sells sandwiches.   And McDonald's is big, they can shape a commodities market all by themselves. Staley even made a chart.  If it's in a chart, it has to be true.

I hope these McDonald's introduce a McScience product; I could use a big trampoline for the office so the extra money could come in handy.

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