Top US turkey producers growing amid challenging market

Overall turkey production grew production in 2016 and 2017, according to WATT Poultry USA’s 2018 Top Poultry Company rankings. However, a number of top U.S. turkey producers are planning on reducing production of pounds of live turkeys in 2018.

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The top turkey producers in the U.S. grew in 2017 in spite of an oversupply of turkey meat. | Bhofack2, Dreamstime.com
The top turkey producers in the U.S. grew in 2017 in spite of an oversupply of turkey meat. | Bhofack2, Dreamstime.com

Overall turkey production grew production in 2016 and 2017, according to WATT Poultry USA’s 2018 Top Poultry Company rankings. However, a number of top U.S. turkey producers are planning on reducing pounds of live turkeys produced in 2018.

The largest 22 turkey producers in the U.S. increased production of live turkeys by 163 million pounds, or 2.24 percent, in 2017. In total, US turkey companies produced 7.433 billion pounds. In 2016, the total was 7.270 billion pounds.

Eight of the 14 companies that shared projections for 2018 said they plan on reducing production levels in the coming year. Those 14 companies said they collectively plan on decreasing production by 33 million live pounds of turkeys in 2018.

Oversupply situation forcing reduction for some

In 2017, Hormel Foods Corp. CEO Jim Snee spoke about an oversupply situation hampering the U.S. turkey market. The market was rocked in 2015 by the highly pathogenic avian influenza outbreak and subsequent loss of about 8 million turkeys, but it recovered in 2016. In February 2017, the leader of Jennie-O Turkey Store’s parent company said the industry was in an oversupply situation and that turkey prices – such as breast meat – fell to a seven-year low.

In November 2017, Snee said “a lot of the turkey industry is operating near break-even.” To address the situation, Jennie-O dialed back production – its total pounds of live turkeys dropped to 1.215 billion in 2017 from 1.275 billion in 2016. He said he was disappointed that the industry isn’t cutting production as a whole just yet but said lingering fears of another avian influenza outbreak may be affecting the decisions of other producers. Only three companies, Butterball LLC, Jennie-O and Michigan Turkey Producers, produced less turkey in 2017 than they did in 2016.

According to projections given as part of the annual survey, both Butterball and Jennie-O, the largest and second-largest producers, dropped production in 2017 compared with 2016. Both Butterball and Cargill Protein, the third-largest producer, plan on dropping production in 2018. Jennie-O, Farbest Foods and Tyson Foods Inc., the fourth- and fifth-largest producers, project they will increase production in 2018. The five companies produced 4.502 billion pounds of live turkeys in 2017. By comparison, the rest of the companies included in the annual survey produced 2.931 billion pounds in 2017.

Turkey production gainers and losers for 2017

  • Twelve companies increased production
  • Seven companies produced the same amount in 2017 as 2016
  • Three companies reduced production
  • Total live pounds of turkeys up in 2017

The net increase in live pounds of production from 2016 to 2017 was 163 million pounds, or 2.24 percent, among the 22 U.S. turkey companies surveyed. By comparison, the same group of producers saw a net increase of 231.58 million pounds in 2016 and a net decline of 66.1 million pounds in 2015.

Producers with largest increases in 2017

U.S. turkey producers with the largest increases in pounds produced in 2017 are:

  • Kraft Heinz Co., +98 million pounds
  • Cooper Farms, +56 million pounds
  • Farbest Foods, +41 million pounds
  • Norbest LLC, +35 million pounds
  • Hain Pure Protein Corp., +20 million pounds
  • Tyson Foods, +15 million pounds

Biggest production increases planned for 2018

Among turkey producers who shared production projections for 2018, the largest projected increases are:

  • Farbest Foods, +35 million pounds
  • Tyson Foods, +30 million pounds
  • Jennie-O Turkey Store, +15 million pounds
  • Dakota Provisions, +10 million pounds
  • Reductions in turkey production in 2017
  • U.S. turkey producers with the largest decreases in pounds produced in 2017 are:
  • Jennie-O Turkey Store, -60 million pounds
  • Butterball, -42 million pounds
  • Michigan Turkey Producers, -35 million pounds

Largest projected decreases in turkey production in 2018

Among turkey producers who shared production projections for 2018, the largest projected decreases are:

  • Hain Pure Protein Corp., -43 million pounds
  • Kraft Heinz Co., -33 million pounds
  • West Liberty Foods LLC, -17 million pounds

Turkey producers with capital improvements

Jennie-O Turkey Store announced plans in May 2017 to build a $137 million processing plant in Melrose, Minnesota. The plant is expected to begin operations in 2019 and partially replace an existing plant in the city.

Cargill Protein began work on modernizing a turkey hatchery in Harrisburg, Virginia, in July 2017. The $7 million project will replace 30-year-old equipment and take 24 months.  

Farbest Foods is planning a $21 million renovation at its Huntingburg, Indiana, processing plant in 2018, which will include upgrades to the controlled atmosphere stunning, scalding and picking areas.

Foster Farms announced a $30 million expansion and upgrade of its processing plant in Farmerville, Louisiana, in August 2017. New equipment was expected to be installed by October 2017.

Cooper Farms completed the addition of a cold storage distribution center at its turkey processing plant in St. Henry, Ohio, in February 2017. In June 2017, it announced the completion of other projects throughout Ohio including the expansion of its cooked meats plant in Van Wert, Ohio.

Dakota Provisions added an $8.5 million cold storage unit and a $38 million new ready-to-eat production facility in 2017. In 2018, it expects to add a new, $3 million live load, live haul and truck maintenance facility.

Prestage Farms replaced plant operations information systems at the cost of $600,000 in 2017. In 2018, it plans on upgrading X-ray scanners at the cost of $200,000.

Koch’s Turkey Farm planned on completing significant expansions to its packaging, shipping and primary processing facilities in 2017.

Read the entire report about the top U.S. turkey companies exclusively in the March issue of WATT PoultryUSA.

Learn more about the top turkey companies in the U.S.:

www.WATTAgNet.com/directories/80

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