Overall turkey production fell significantly in 2019, according to WATT PoultryUSA’s 2019 Top Poultry Company rankings.
According to the annual survey of U.S. poultry companies, the top U.S. turkey companies produced 7.160 billion pounds of live turkeys in 2019. That’s 197.73 million fewer pounds, or 2.7% less, than the 7.358 billion pounds it produced in 2018. In 2017, the industry produced 7.451 billion pounds.
Domestic turkey production dropped for the second-straight year. From 2017 to 2019, production dropped by 290.36 million pounds, or about 4%. The year-to-year decline from 2018 to 2019 of 197.73 million pounds is also the largest year-over-year drop in production since the 2015 outbreak of highly pathogenic avian influenza.
Oversupply scenario persists
The year 2019 closed with the industry facing an oversupply situation that carried into 2019.
According to the head of Jennie-O Turkey Store’s parent company, Jim Snee, chairman, president and CEO Hormel Corp., there was an industry wide oversupply of turkey meat during the year. However, he said his company saw positive signs at the close of the year and expects to grow the business in 2020.
The top five producers: Butterball LLC, Jennie-O Turkey Store, Cargill Protein, Farbest Foods Inc. and Tyson Foods Inc. collectively dropped their production by 54 million pounds, or about 1%, in 2019, compared with 2018. Those five companies represent 62% of total domestic turkey production covered in the WATT Global Media survey.
The group expects to drop production again in 2020, too. According to the survey responses, the top five’s output will decline to 4.443 billion pounds, or by about 0.6%, in 2020.
Fallout of Zacky closure
The closure of Zacky & Sons Poultry at the beginning of 2019 likely accounted for a notable portion of the year-over-year production decline. The California turkey producer slaughtered an estimated 82.96 million pounds of live turkeys in 2018, but it closed its doors in January 2019 citing an inability to do business in the current market.
In October 2019, Foster Farms purchased the former assets of Zacky after placing the high bid of $31 million for 19 farms that were formerly part of Zacky. If combined, the full production capacity of Zacky’s former assets would raise the California-based turkey and chicken producer’s annual output above 300 million pounds.
Plainville Farms sold
The assets of Hain Pure Protein’s turkey operation were also sold early in the year 2019 after an extended campaign to sell the business.
In February 2019, The Hain Celestial Group Inc., sold its turkey operations and its brand – Plainville Farms – to a Delaware limited liability company called Plainville Brands LLC. Terms of the deal were not disclosed. Those operations are now doing business as Plainville Farms. However, the new unit produced 35 million less pounds of live turkeys in 2019 than it did the prior year.
Hain Celestial also sold its chicken operations – branded as FreeBird and Empire Kosher – to Aterian Investment Partners, a private equity firm, for $80 million.
Top companies invest in production
Jennie-O, Farbest and Dakota Provisions invested in new operations in 2019. In January 2019, Jennie-O opened a $137 million processing plant in Melrose, Minnesota. The plant partially replaced an existing plant in the city.
In 2019, Farbest spent $10 million on its Huntingburg, Indiana, processing plant, to continue its renovation and automation of the plant. In 2020, it plans on investing another $5 million in that project as well as carrying out an $8.2 million project renovating and improving the plant’s refrigeration and chilling capabilities.
In 2018, Dakota Provisions completed a $45 million, 70,000-square-foot ready-to-eat (RTE) facility it built to increase production of raw and RTE products for customers. In 2019, the company installed $10 million worth of equipment in the new RTE plant.
