Thanksgiving Turkeys Cost More Than Ever After Bird Flu WipeoutBy , , and
Farmers destroyed 8 million turkeys, and survivors weigh less
Retail prices jump 21% as grocers compete for limited supply
To make sure all 15 of the Busch’s Fresh Food Market stores had enough turkeys over 22 pounds (10 kilograms) to sell for Thanksgiving this month, meat buyer John Taormina began ordering in January. He didn’t end up with a single one of the big birds, which last year accounted for more than a third of what the Michigan company sold for the holiday.
After the worst-ever U.S. outbreak of avian influenza destroyed almost 8 million turkeys earlier this year, there are fewer of them, and those that remain are smaller than normal. That’s boosting wholesale costs for grocers to a record, and consumer prices are the highest ever for this time of year. Americans will eat about 49 million turkeys for Thanksgiving holiday meals on Nov. 26, or roughly one of every five that will be consumed all year.
“The larger-sized birds will be difficult to get this year,” Taormina said, adding that the biggest available at his upscale stores will be 20 pounds to 22 pounds, which is big enough to feed about 15 people. Turkey is “center-of-the-plate for this holiday, so typically families get together and they’re looking for the bigger-sized” birds, he said.
Some turkey farmers haven’t recovered from a six-month outbreak that ended in June, and many were forced to sell birds earlier than normal and at smaller sizes, said Russ Whitman, vice president at commodity researcher Urner Barry in Bayville, New Jersey. Production fell to a five-year low, and the September weight decline for turkeys was the biggest for that month in four decades, U.S. Department of Agriculture data show.
Wholesale, fresh turkey hens surged 18 percent from a year earlier to a record $1.5993 a pound as of Nov. 6, and frozen turkeys were up 5.6 percent at $1.309 a pound, after touching an all-time high of $1.385 a week earlier, USDA data show. The agency estimates birds at slaughter weighed 29.7 pounds in September, down 2.8 percent from a year earlier and the biggest decline for that month since 1973.
While shoppers probably can still find deals because most supermarkets offer seasonal discounts on turkey to lure customers, the USDA reported prices for frozen hens averaged a record $1.08 a pound as of Nov. 12, up 21 percent from a year earlier.
Fresh turkeys that account for 20 percent of Thanksgiving sales are especially hard to find because most were born after outbreak ended, according to Tom Elam, the Carmel, Indiana-based president of consulting firm FarmEcon LLC. The number of baby turkeys, or poults, placed into flocks in July were down 7 percent from a year earlier, USDA data show.
With tighter supplies, buyers are competing for supply. The Cornwell family in Marshall, Michigan, which raises as many as 40,000 birds a year, is getting calls for the first time from large food distributors and food-services companies that usually only buy from major producers, farm owner Patti Cornwell said.
There were 268 million pounds of whole turkeys in cold storage at the end of September, the least for the month since 2006, according to the USDA. Supplies of all frozen turkey were the lowest in three decades. Domestic production will drop 3.2 percent this year to 5.57 billion pounds, the lowest since 2010, according to USDA estimates.
It’s not all bad news for consumers. Thanksgiving is a big holiday for deals on turkey, which means retailers may eat some of the higher costs. For example, ShopRite, a chain of grocery stores in the northeastern U.S., is offering a free turkey to customers who spend $400 between Oct. 18 and Thanksgiving.
At Busch’s Fresh Food Market, the company plans to keep retail prices unchanged from last year and will absorb a 15 percent increase in turkey costs, the biggest Taormina’s said he has seen in 20 years of buying meat.
Other seasonal staples like cranberries and potatoes probably won’t be more expensive than last year, according to Corinne Alexander, an agricultural economist at Purdue University in West Lafayette, Indiana. Lower electricity and natural-gas prices also will help keep costs in check for cooking a Thanksgiving meal this year, she said.
Butterball LLC, the largest U.S. turkey processor, expects to sell “a very similar” number of turkeys this holiday season as 2014, or about 20 million birds, said Jay Jandrain, executive vice president of sales. The Garner, North Carolina-based company produces about a quarter of the turkeys sold in November and December. Because most of the whole birds are sold to retailers early in the year, current wholesale prices probably don’t reflect their total costs, he said.
Prestage Farms Inc., based in Clinton, North Carolina, sold about a third of its whole-bird hens on the spot market for about $1.30 a pound, a record, said Ron Prestage, president of operations in South Carolina and Mississippi. The remaining birds fetched $1 to $1.10, about the same as last year, he said. The company produces about 420 million pounds of turkey annually, with about 10 percent used in the whole-bird market. Annual production will be about 1 percent below the company’s normal output of 14 million turkeys, after a hatching supplier in Minnesota was short on eggs due to the outbreak, Prestage said.
“I absolutely think that consumers are going to see a higher price of turkeys, but they probably won’t see all of it because they commonly don’t,” Prestage said.
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