Low prices indicate turkey meat demand unable to keep pace with production.

Krissa Welshans 1, Feedstuffs Editor

June 27, 2018

2 Min Read
Turkey production up, but growth outlook modest
DarcyMaulsby/iStock/Thinkstock

Data suggest that turkey producers are struggling to pull back growth in the face of diminishing returns brought about by wholesale prices that have remained far below recent historical averages, according to the U.S. Department of Agriculture’s most recent “Livestock, Dairy & Poultry Outlook.”

USDA reported that April 2018 production totaled 482 million lb., a 10% increase from April 2017 but up just 5% when viewed on a per-slaughter-day basis. The average increase per day in April was larger than any month since March 2017, or September 2016 on a monthly basis.

USDA hatchery report data for April were mostly flat relative to the same period in 2017 -- a modest break from four consecutive months of year-over-year declines in all categories. Eggs in incubators on the first of the month remained slightly lower in May, marking their sixth consecutive month in the negative, USDA said.

The 2018 turkey production forecast is 5.937 billion lb., up 20 million lb. from last month and 1% below 2017. USDA left the 2019 turkey production forecast unchanged at 5.97 billion lb., a half-percent increase over the 2018 forecast.

Prices below historical averages

USDA reported that wholesale whole-hen frozen turkey prices appear to have stabilized after a nearly two-year fall to prices not seen since 2010. The latest price data, covering the week ending June 8, 2018, showed frozen whole hen prices at 80 cents/lb., well below early-June prices for the past several years.

“The low wholesale prices indicate that turkey meat demand has not kept pace with production, further supported by higher-than-average stocks in cold storage,” the report noted.

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USDA forecasts 2018 turkey prices to average 81-84 cents/lb. for the year at the midpoint, about 14% below prices in 2017. In 2019, turkey prices are expected to average 84-91 cents/lb. If realized, USDA said prices at the midpoint of the range would be 6% higher than expectations for 2018.

Turkey exports increased in April

According to USDA, April 2018 turkey exports were 18% higher than a year earlier, totaling 51 million lb. Mexico remains the largest destination, with 35 million lb. shipped there in April, comprising 68% of all U.S. shipments.

“As domestic prices continue below historical levels and cold storage stocks remain high, the export market is expected to remain an attractive destination for producers,” USDA reported.

Exports are expected to grow further in 2018 to 663 million lb., a 7% increase over 2017. In 2019, turkey meat exports are expected to total 655 million lb., a 1% decline from the strong export totals in 2018 so far.

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