A Conspiracy of Hogs: The McRib as Arbitrage

Discussion in 'Economy' started by Synthaholic, Nov 12, 2011.

  1. Synthaholic
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    Synthaholic Platinum Member

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    A Conspiracy of Hogs: The McRib as Arbitrage



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    One of McDonald’s most divisive products, the McRib, made its return last week. For three decades, the sandwich has come in and out of existence, popping up in certain regional markets for short promotions, then retreating underground to its porky lair—only to be revived once again for reasons never made entirely clear. Each time it rolls out nationwide, people must again consider this strange and elusive product, whose unique form sets it deep in the Uncanny Valley—and exactly why its existence is so fleeting.


    The McRib was introduced in 1982—1981 according to some sources—and was created by McDonald’s former executive chef Rene Arend, the same man who invented the Chicken McNugget. Reconstituted, vaguely anatomically-shaped meat was something of a specialty for Arend, it seems. And though the sandwich is made of pork shoulder and/or reconstituted pork offal slurry, it is pressed into patties that only sort of resemble a seven-year-old’s rendering of what he had at Tony Roma’s with his granny last weekend.


    These patties sit in warm tubs of barbecue sauce before an order comes up on those little screens that look nearly impossible to read, at which point it is placed on a six-inch sesame seed roll and topped with pickle chips and inexpertly chopped white onion. In addition to being the outfit's only long-running seasonal special and the only pork-centric non-breakfast item at maybe any American fast food chain, the McRib is also McDonald’s only oblong offering, which is curious, too—McDonald’s can make food into whatever shape it wants: squares, nuggets, flurries! Why bother creating the need for a new kind of bun?


    The physical attributes of the sandwich only add to the visceral revulsion some have to the product—the same product that others will drive hundreds of miles to savor. But many people, myself included, believe that all these things—the actual presumably entirely organic matter that goes into making the McRib—are somewhat secondary to the McRib’s existence.



    This is where we enter the land of conjectures, conspiracy theories and dark, ribby murmurings. The McRib's unique aspects and impermanence, many of us believe, make it seem a likely candidate for being a sort of arbitrage strategy on McDonald's part. Calling a fast food sandwich an arbitrage strategy is perhaps a bit of a reach—but consider how massive the chain's market influence is, and it becomes a bit more reasonable.


    Arbitrage is a risk-free way of making money by exploiting the difference between the price of a given good on two different markets—it’s the proverbial free lunch you were told doesn’t exist. In this equation, the undervalued good in question is hog meat, and McDonald’s exploits the value differential between pork’s cash price on the commodities market and in the Quick-Service Restaurant market. If you ignore the fact that this is, by definition, not arbitrage because the McRib is a value-added product, and that there is risk all over the place, this can lead to some interesting conclusions. (If you don’t want to do something so reckless, then stop here.)




    *snip*
     
  2. Toro
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    Toro Diamond Member

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    My wife read an article this morning to me about what was in the McRib.

    I'll never eat one again.
     
  3. Sherry
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    Sherry You're not the boss of me Supporting Member

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    Is it worse than hot dogs or sausage??
     
  4. Shogun
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    Shogun Free: Mudholes Stomped

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    i fucking LOVE mccribs. they remind me of the rib sandwich from jr high and elementary school.

    no onions, extra pickles and EXTRA sauce for me, please.
     
  5. Mr. H.
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    Mr. H. Diamond Member

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    The sporadic appearance of the McRib has much to do with the price of pork.
    Cheap pork- enter the McRib...

    McDonald's relationship with the pork industry goes back to the McRib's conception. In 1972, Roger Mandingo, a University of Nebraska professor, received a grant from the National Pork Producer's council to develop a technology that bound small "umarketable parts of the animal" into a formation that looked more appetizing. In other words, he figured out how to mold tripe, heart or stomach bits into something that looked like a choice cut of meat. Let's say, the ribs.

    Why Does McDonald's Keep Bringing McRib Back? Blogger Has Theory | Shine Food - Yahoo! Shine
     

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