Northwest Arkansas Democrat-Gazette
More than enough turkeys
Prices for Thanksgiving birds down 1.6 percent as supply booms.
plenty of turkey for second helpings this Thanksgiving.
Supplies will be plentiful after a recent production boom. According to an annual survey from the American Farm Bureau Federation, a 16-pound turkey will cost about 1.6 percent less than last year, and the whole meal will be the cheapest since 2013.
Turkey demand almost doubled in the 1980s as Americans flocked to lowfat foods.
Since then, per-capita disappearance — an industry term for consumption — has been fairly stable.
There’s a market for deli meat and ground turkey, while the bird’s parts are less popular, said Dewey Warner, a research associate with Euromonitor International in Chicago.
“Chicken is more culturally instilled in people,” he said.
U.S. production has climbed faster than demand in the past two years. While the worst-ever U.S. bird-flu outbreak killed millions of birds in 2015, the epidemic has since abated.
“After avian influenza, the market actually overcorrected quite frankly and supply became excessive,” said Jay Jandrain, chief operating officer of Butterball LLC, the North Carolina-based producer that sells about a third of all Thanksgiving and Christmas turkeys. “There’s not going to be any issues at all from a consumer standpoint in being able to find turkeys.”
Costs have held below average this year and are “particularly low” for Thanksgiving, when prices typically peak, the U.S. Department of Agriculture said in a report
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Thursday.
“It’s going to be a really good, inexpensive turkey season for consumers,” said Christine McCracken, an executive director with Rabobank in New York.
The price of a basket of Thanksgiving items, including a 12-pound turkey, is down 6.7 percent at Wal-Mart Stores Inc. this year, according to a report from Bloomberg Intelligence.
The study gives a snapshot of an industry where competition has become increasingly cutthroat.
Wal-Mart has succeeded in reinvigorating its grocery business, which generates nearly 60 percent of U.S. revenue, even as German discount chains Lidl and Aldi expand their presence.
Even though grocery prices have risen for three
straight months after a record run of deflation, retailers are still reluctant to pass on the increases to customers, according to Jennifer Bartashus, an analyst at Bloomberg Intelligence.
“Nobody wants to be the first one to raise prices,” she said. “It’s remarkable, coming out of a sustained period of deflation, that the prices haven’t crept up more.”
The Wal-Mart meal came in at $54.84, according to Bloomberg Intelligence. Shoppers seeking an even cheaper option, though, should head to Aldi, where a similar group of 20 products can be purchased for $41.19 — down 2.6 percent from last year.
While Whole Foods remains a high-end Thanksgiving destination, the cost of turkey dinner is lower there, as well, following its acquisition by Amazon.com.
A basket of primarily organic items priced at $113.71, down about 16 percent from
2016.
Amazon hasn’t said much publicly about its strategy for the chain, but it’s managed to increase store traffic with ballyhooed price cuts on a handful of popular items since the deal closed in August.
The Bloomberg Intelligence study was conducted in New Jersey.
One of the industry’s recent challenges has been surging production growth for beef, pork and chicken, said Tom Elam, president of Indiana-based FarmEcon.
That’s created “more of a general supply of protein on the U.S. market to compete with everybody,” he said. Exports have helped to offset some of the expanding meat supply.
Still, China, once the second-largest turkey export market, has maintained a ban on American poultry imports since 2015.
That gap between demand and output has spurred a surge in frozen inventories, meaning shoppers might score a better-than-usual deal on Thanksgiving and Christmas birds.
Stockpiled supplies of turkey reached an eight-year high at the end of September, USDA data show.
The agency will issue its next cold-storage report on Wednesday.
Holiday demand is expected to be steady, and Butterball is seeing more interest in precooked and smoked turkeys, so chefs don’t have to hover by their ovens, Jandrain said.
About 88 percent of Americans serve up the birds for Thanksgiving, accounting for 736 million pounds last year, according to the National Turkey Federation.
That means about a 10th of annual production is gobbled for the holiday.