Highly pathogenic avian influenza (HPAI) interrupted the U.S. turkey industry’s expansion in live production in 2015, according to WATT PoultryUSA’s poultry company rankings, but investment in further processing capacity proceeded even while turkey producers continued to rebuild production.

HPAI hit U.S. turkey flocks in the upper Midwest in 2015 between March and June resulting in the loss of nearly 8 million turkeys.

What was the largest poultry disease outbreak in U.S. history hit the U.S. turkey industry midstride of an expansion of production as lower feed costs and favorable wholesale pricing generated profitable conditions.

Turkey production declines overwhelm increases

While there was a net decrease in production of live turkeys among the 23 turkey companies surveyed, not every turkey producer was impacted in the same way or to the same degree. According to the WATT PoultryUSA turkey rankings:

  • Eight turkey companies increased production
  • Seven turkey producers had no change in production
  • Eight turkey producers reduced production

There was a net decline of 66.1 million pounds in live turkeys slaughtered in 2015. While eight turkey companies added a combined 153.5 million pounds in live turkeys, another eight companies reduced production by a combined 219.6 million pounds.

U.S. turkey investment continued in 2015

No. 1-ranked Butterball reported slaughtering 1.36 billion pounds of live turkeys in 2015, no change from the previous year. But the company continued its investment and capital improvements. Butterball purchased the former House of Raeford further processing plant in Raeford, North Carolina, in February 2015. It also invested $45 million in expanding its further processing capacity by 37 million pounds. In 2016, Butterball plans to invest $30 million more to expand its further processing to include tray-pack, burgers and slicing.

No. 2-ranked Jennie-O Turkey Store, a subsidiary of Hormel Foods, reported slaughtering 1.175 billion pounds of live turkeys in 2015, a decrease of 105 million pounds or 8.2 percent.

HPAI dealt a significant blow to Jennie-O Turkey Store’s business in the spring of 2015, resulting in the loss of approximately 20 percent of its supply chain volume in the back half of the fiscal year. Jennie-O Turkey Store finished its fiscal 2015 (ending in October) with sales down 2 percent and earnings up 1 percent. Fiscal year 2015 net sales were $1.636 billion and operating profit was $276.2 million.

Headed into fiscal 2016, Jennie-O Turkey Store will be impacted by the lingering effects from the 2015 HPAI impact but it is expected to return to growth in the second half of the year. The company projects it will slaughter 1.295 billion pounds of live turkeys in 2016.

No. 3-ranked Cargill Turkey & Cooked Meats (formerly Cargill Value Added Meats) reported slaughtering 1.0 billion pounds of live turkeys in 2015, no change from the previous year’s production.

The company projects it will slaughter the same amount of birds at a total live weight of 1.0 billion pounds in 2016.

In the fiscal 2016 first quarter, Cargill agreed to sell its U.S.-based pork business to JBS USA Pork for $1.45 billion, pending regulatory review and approval.

Farbest Foods, VPGC post production increases

Of the top 10 turkey producers in WATT PoultryUSA’s rankings, only Farbest Foods and Virginia Poultry Growers cooperative (VPGC) posted increases in production of live turkeys in 2015.

No. 4-ranked Farbest Foods slaughtered an estimated 582.00 million pounds of live turkeys in 2015, an increase of 17.8 percent. In 2015-16, Farbest Foods will have invested more than $30 million in renovations at the Huntingburg, Indiana, processing plant to incorporate new automation processes.

No. 5-ranked Tyson Foods reported slaughtering 318.00 million pounds of live turkeys in 2015, no change from 2014.

No. 6-ranked Perdue Foods reported slaughtering 284.00 million pounds of live turkeys in 2015, a decrease of 15.0 million pounds or 5 percent.

No. 7-ranked Kraft Heinz Foods slaughtered 267 million pounds of live turkeys in 2015, a reduction of 4.6 percent from the previous year.

No. 8-ranked Virginia Poultry Growers Cooperative reported slaughtering 267 million pounds of live turkeys in 2015, an increase of 17 million pounds or 6.8 percent. The cooperative projects it will slaughter 270.0 million live pounds in 2016.

No. 9-ranked Foster Farms reported slaughtering 231.7 million pounds of live turkeys in 2015, a decrease of 15.3 million pounds or 6.2 percent from the previous year.

No. 10-ranked West Liberty Foods reported slaughtering 216.58 million pounds of live turkeys in 2015, a decrease of 4.93 million pounds or 2.2 percent.

Biggest production growth in 2015

The eight U.S. turkey companies with growth (by percentage) of live turkeys slaughtered in 2015 are as follows:

  • Farbest Foods increased production by 88 million pounds or 17.8 percent
  • Hain Pure Protein increased production by 20 million pounds or 13.3 percent
  • Norbest increased production by 10.9 million pounds or 11.5 percent
  • Koch’s Turkey Farm increased production by 1.6 million pounds or 10 percent
  • Virginia Poultry Growers Cooperative increased production by 17 million pounds or 6.8 percent
  • Prestage Farms increased production by 7 million pounds or 5 percent
  • Cooper Farms increased production by 7 million pounds or 3.4 percent
  • Michigan Turkey Producers increased production by 2 million pounds or 1 percent

Reductions in turkey production in 2015

The eight U.S. turkey producers with decreases in production of live turkeys slaughtered in 2015 are as follows:

  • Dakota Provisions decreased production by 49 million pounds or 20.9 percent
  • Turkey Valley Farms reduced production by 16.4 million pounds or 10.3 percent
  • Jennie-O Turkey Store reduced production by 105 million pounds or 8.2 percent
  • Foster Farms reduced production by 15.30 million pounds or 6.2 percent
  • Perdue Farms reduced production by 15 million pounds or 5 percent
  • Kraft Heinz Foods reduced production by 13 million pounds or 4.6 percent
  • West Liberty Foods reduced production by 4.93 million pounds or 2.2 percent
  • Northern Pride Turkey decreased production by 1 million pounds or 2.2 percent