The urging of public health officials to limit holiday celebrations is driving demand for turkey, and retail prices, to their lowest level in years.
In the weeks proceeding and following Turkey Day – Thanksgiving Day was November 26, 2020 – WATT Poultry Chat discussed the turkey market with a pair of market observers: Mark Jordan, executive director of LEAP Market Analytics, and Dr. Thomas Elam, president of FarmEcon LLC.
Thanksgiving performance
Both Jordan and Elam said American consumers were less likely to purchase a larger bird – a whole tom or whole hen – and more likely to purchase a ham or turkey breast to feed a smaller gathering. Due to a surge of COVID-19 infections currently in the country, consumers are urged to limit gatherings during a holiday season which usually includes large family gatherings.
Due to these effects, Elam said, the average retail price of turkey fell by 7% from 2019 to reach its lowest level in a decade.
The turkey producers themselves are not losing out due to this phenomenon. Elam and Jordan said commodity turkey prices are higher than they were in 2019. The retailers are offering turkey as a loss-leader in order to get shoppers in the store and will be taking the hit from lower demand for birds, he said, rather than the turkey producers.
Overall turkey market in 2020
Jordan said market indicators point toward tight supply levels which may mean high prices are more closely related to a small supply than high demand. For whole turkeys, the supply is as low as its been in four decades, he said.
Elam said turkey production is trending downward since 2017 and continued to do so in 2020. That is because the industry is not making much money. The prices rising and the supply falling simultaneously indicate to him that demand is weak. He believes that’s correlated with the COVID-19 holiday restrictions.
