The turkey industry will soon rebound from tough financial times and should return to profitability later in 2013, financial officers from U.S. turkey operations said. Managers from turkey processors across the United States took part in a roundtable discussion about the industry's financial challenges on June 25 during the USPOULTRY Financial Management Seminar in Orlando, Fla.
If feed prices moderate, turkey poult placements remain at reduced levels and exports to Mexico continue to be strong, the industry will be more profitable later in 2013, said Gerald Jones, vice president of finance for Farbest Foods.
But when that will happen in 2013 is more up for debate. While some attending expected profits to return in the third quarter, more seemed think it would happen in the fourth quarter.
"I would say we'll return to profitability in the fourth quarter," said Marvin Lefeld, chief financial officer of Cooper Farms. "I think to say it will happen in the third quarter is premature, because you're still working with the old crop," adding that it will likely take a little longer for feed prices to relax.
Dennis Thomas, chief financial officer of Dakota Turkey Growers LLC, expects further improvement in the industry beyond 2013.
With high grain prices and an oversupply of turkey in cold storage, Thomas called the first half of 2013 a "historic bad place for the turkey industry." He expects further improvement in 2014.
"I think 2014 will be a bright spot. I think every one of our companies have bought into the reduced supply," Thomas said.
He added that if pork supplies drop as some expect because of outbreaks of Porcine Epidemic Diarrhea, some consumers may buy less pork and more turkey.
Discussion participants also noted that the future is looking better as more quick service restaurants like Hardee's, Carl's Jr. and Burger King have added turkey items to their menus.
