This year and last, wholesale turkey prices have been sharply lower than in years past, according to the U.S. Department of Agriculture’s latest “Livestock, Dairy & Poultry Outlook.” Still, USDA said these low wholesale prices don’t always indicate similar declines in retail prices.
“While wholesale and retail price movements are historically correlated on a yearly basis, seasonal factors can disrupt this correlation. In the past, Thanksgiving holiday season retail turkey prices were commonly near annual low points, while wholesale prices rose,” the agency said.
The November markup from wholesale to retail turkey prices between 2014 and 2016 was 18%, compared with a 38% average over all months in that period. Beginning in 2017, however, USDA said turkey prices began a sustained decline that was not fully reflected in retail price movements.
In fact, USDA pointed out that the retail markup in November 2017 reached 78% — compared with 65% for the year — and a higher markup is expected in 2018. The data indicate that the past Thanksgiving season relationship between retail and wholesale turkey prices may be lessening, the agency added.
Whole turkey prices maintain stability
According to USDA, wholesale whole-hen frozen turkey prices have been remarkably stable throughout 2018 after their nearly two-year fall to prices last seen in 2010. The latest price data, covering the week ending Nov. 3, 2018, shows frozen whole hen prices at 80 cents/lb., well below early-November prices for the past several years. For context, USDA said prices were $1.25/lb. on Nov. 5, 2016, and 88 cents/lb. at the same time in 2017.
“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,” USDA economists noted.
Turkey prices for 2018 are projected to average 81 cents/lb. for the year, about 16% below prices in 2017. In 2019, turkey prices are expected to average 81-88 cents/lb. If realized, USDA said prices at the midpoint of the range would be 4% higher than expectations for 2018.