Let’s Talk Turkey

November 8, 2021 | Letters

Author: Dr. Nicole Olynk Widmar, Associate Head and Professor, Purdue University Department of Agricultural Economics,
Dr. Courtney Bir, Assistant professor, Department of Agricultural Economics, Oklahoma State University

Lets Talk Turkey

It’s post-Halloween, cue the Christmas music! Although, we don’t go into department stores anymore, so I guess I’m not sure where to cue it … let me try again … “ALEXA, CUE THE CHRISTMAS MUSIC!” Ah, there we go.

With Halloween 2021 behind us, the 2021 winter holidays are front and center. After 2020’s year of holiday adaptations from trick or treating within our own homes for Halloween, to top mentions for Thanksgiving 2020 in a national media search being cancel, not celebrate, not want, avoid, and not eat, and capping the year off with an anxiety-ridden run-up of COVID-19 case counts to accompany adapted Christmas traditions, we’re all anxious for the holidays of 2021 (Note I did not say we were all anxious for some normal holidays; I have no more patience for ‘normal’.).

Next up is Thanksgiving 2021 with the turkey as the star. And as of now it’s looking like stars are a bit more pricey in 2021 compared to past years. Last year’s meat markets were worried about the size of the turkey, but not in the way you might expect; we were worried they were too big for our smaller 2020 gatherings. Now, the last USDA, Economic Research Service Livestock, Dairy, and Poultry Outlook dated October 18th, 2021 summarized the situation well, “Turkey production and ending stocks were adjusted down on recent data. Turkey exports were also adjusted down, while prices were adjusted up in both 2021 and 2022, reflecting lower supply expectations.” In short, less turkey fuels higher prices. Turkey production (forecasted) for 2021 was down 2% from 2020 according to USDA, ERS. Exports are down in 2021 compared to 2020, but remain consistent as a share of total production (at approximately 10%, per USDA, ERS).

Turkey in cold storage (which is reported by USDA, National Agricultural Statistics Service) follows a very predictable and obvious annual pattern in which we build up stocks of turkey all year until fall and then draw down stocks as retailers start to order and then move holiday turkeys. According to USDA, ERS’s analysis of USDA, NASS data stocks in August 2021 were down 20% from August 2020. The overall pattern of 2021 (shown in green on the following graph from USDA, National Agricultural Statistics Service) is keeping with prior years, but the total stock is lower all year, and the peak came earlier in the summer than past years.

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Ultimately, what people want to talk about is price. September 2021 wholesale prices for frozen whole hens averaged the highest monthly price since the series began being tracked in 2006, at 136.3 cents per pound (Turkey Prices Graphs are credited to the Livestock Marketing Information Center).

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Having recently become very excitable about the price disparities in parts of the bird (wrong bird … that was about chickens, although the point still holds) rather than simply focusing on whole birds, I’m inclined to look at turkey breasts in addition to whole birds. Turkey breasts are less seasonally impacted from the demand side and while they may become more popular for various reasons, it isn’t as obvious and pointed as the holiday rush for whole turkeys. Turkey breasts have many more uses than being served whole, including for sandwiches, foodservice and at-home dishes.

Wholesale breast prices were depressed in 2020 compared to the 2015-2019 average, likely the result of decreased demand for food away from home, subs and sandwiches, in addition to the overall economic and market forces impacting meat markets in 2020. 2021 wholesale breast prices started out in the 2020 range but took off in Q2 and haven’t looked back. A return to food away from home, lunches out and switching away from other relatively more expensive meats have fueled this rise alongside supply side factors. Nonetheless, it’s worth noting that while the spotlight this season is on the whole bird in the center of the table, we – again – cannot forget that livestock animals are not widgets and that making more of any animal product is going to have impacts on the supply of other animal products.

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For more, turkey enthusiasts may wish to follow the Friday weekly reporting from the USDA Agricultural Market Service Turkey Market News Reports to keep up-to-date on trends, including retail activity and prices.

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