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Grocers paying more for holiday turkeys

thanksgiving dinner turkey stuffing
Frozen whole bird inventories in commercial storage down 9% at beginning of September.

The transition from procurement to distribution of meat for the Thanksgiving holiday should be getting underway in the next week or two, the Livestock Marketing Information Center (LMIC) reports. USDA’s Agriculture Marketing Service (AMS) recently reported that during the first week of October, consumer packaged hen turkeys in wholesale markets were priced more than 10% above year-ago prices.

LMIC said scarcity of product has been reported by the media in the last couple months. Additionally, trade was so limited from mid-August to mid-September that the USDA-AMS was not able to quote a price for hens in their weekly market summary. Price quotations for larger tom turkeys, on the other hand, have been available throughout August and September, with trading stable, close to the values registered in mid-August. 

“The resumption of price quotations in the second half of September was at values that were up 10% from a month earlier.  During the last two weeks, prices for hens and toms have fallen back but are still above mid-August prices by 3-5%,” LMIC said.

It was further noted that at the beginning of September, frozen hen inventories in commercial cold storage were down 26% from a year earlier while frozen tom inventories were up 5%. In total, frozen whole bird inventories were down 9%. 

LMIC is expecting whole turkey frozen inventories to be down 26% from a year ago at the end of September.

“The accelerated decline in frozen inventories is due to turkey production in September that is projected to be down 3% while domestic usage and turkey exports post increases relative to September 2020.”

The decline in production, LMIC said, is a consequence of turkey hatchery output in June that was down 8% from the prior June and July hatchery output that was down 4% from a year earlier.

Uncertainty about consumer demand for turkey has been a challenge for the outlook in recent years and the past few months do not provide much clarity, the group said.

“Through the first two months of the summer quarter, domestic turkey usage was down 1% from July and August of 2020 but August usage was up 4%, so the trend was improving.”

Meanwhile, Ham prices, which compete with turkey during the holidays, were up close to 40% from a year ago during the July-September quarter. However, LMIC said ham prices have been volatile. In fact, by the last week in September, those same ham prices were only up 5% from a year earlier.

“This could put a dent in grocery store turkey marketing programs as the holidays unfold.”

LMIC suggested that current wholesale prices for whole turkeys in the $1.30-1.40 per pound range—up from $1.10-1.20 a year ago—are consistent with limited inventories in cold storage and usage this holiday season that would be unchanged to up slightly from last year.

 

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