One More Reason to Give Thanks: Falling Turkey Prices
Nov 23, 2016
Here’s another excuse to pig out this Thanksgiving: turkey prices are down.
After suffering from an outbreak of bird flu in 2015, American turkey producers have come back in a big way. Low feed costs are helping U.S. output to climb 7 percent this year to 6.02 billion pounds, the second-highest ever, government data show. Rising supplies mean that wholesale frozen birds are fetching about 11 percent less than this time last year.
The production boom is good news for Thanksgiving feasters, since recent history suggests Americans will eat about 46 million of the birds when they celebrate the holiday on Nov. 24, according to the National Turkey Federation. With poultry prices falling, the average bill to feed 10 people for Thanksgiving is set to drop about 0.5 percent from 2015, when the expense reached a record high. Declines are also being driven by falling costs for pumpkin-pie mix and milk, according to an annual survey from American Farm Bureau Federation. While prices for peas, fresh cranberries and sweet potatoes rose.
Prices for wholesale frozen birds weighing 8 pounds (3.6 kilograms) to 16 pounds averaged $1.1541 a pound in the week ended Nov. 18, down from $1.2922 a year earlier, according to U.S. Department of Agriculture data. The declines were similar for larger birds, and fresh turkey prices also fell from 2015.
“Producers are trying to capitalize on really strong margins,” said an analyst at Advanced Economic Solutions in Omaha, Nebraska, said in a telephone interview. “Both weights and increased slaughter are adding to production.”
Gains for turkey output are adding to this year’s domestic glut of meat. Pork and chicken production are forecast at all-time highs, and beef output is growing. Ballooning supplies are helping to keep a lid on food inflation as farmers are also in the midst of harvesting bumper grain crops. Corn prices have fallen about 4 percent in the past 12 months.
Still, even though a turkey will cost less this year, prices are still at historical highs. The expense for that 10-person Thanksgiving meal is the second-highest ever.
Frozen turkey inventories have had to be rebuilt after last year’s shortfall, said Russ Whitman, vice president at commodity researcher Urner Barry in Toms River, New Jersey. While total turkey supplies in cold storage were up 14 percent from a year ago at the end of September, stockpiles of whole birds had only climbed 1.3 percent, USDA data show.
“Whole hen prices have remained relatively strong, but have shown a smaller-than-typical seasonal increase in recent weeks,” the USDA said in a Nov. 16 report.
The good news for consumers eager to eat turkey and watch football next week: many grocery chains use heavily discounted birds to lure in shoppers for all of their holiday food needs.
Jewel-Osco, with stores in Illinois, Indiana and Iowa, is featuring Jennie-O whole frozen turkeys at 49 cents a pound, with a $25 minimum purchase. Cincinnati, Ohio-based Kroger Co. was peddling the birds for 59 cents a pound last week, if shoppers spent another $35. The average retail price for frozen birds in the week ended Nov. 18 -- at 99 cents a pound -- was below wholesale costs, but slightly higher than the prior year, USDA data show.
“To my surprise, the ads across the nation are pretty attractive and aggressive,” Whitman said. “There’s a good chance of clearing out this year.”
Here’s another highlight for those who will actually be doing the cooking on Thanksgiving. Butterball LLC, the largest U.S. turkey processor which sells about 20 million birds for the holiday season, is enabling consumers to now send text messages to the company’s annual Turkey Talk-Line for Thanksgiving cooking tips, said Jay Jandrain, executive vice president of sales.
(Corrects second paragraph and first deckhead of story originally published on Nov. 21 to show turkey production is second-highest ever.)
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