Higher-Priced Turkeys on the Holiday Menu

By Brian Earnest

November 1, 2022

After grappling with staff shortages, plant closures, and supply issues, the turkey industry has been hit by yet another problem in 2022: the worst Highly Pathogenic Avian Influenza (HPAI) outbreak in U.S. history. So far, HPAI mitigation efforts have eliminated more than 7.5 million turkeys this year, accounting for over 3% of annual turkey production. And while that may not seem like much, it comes on top of an already shrinking national turkey flock and extremely tight supplies across the meat department. Given America’s love affair with the Thanksgiving turkey, the short supplies and inelastic holiday demand will send retail turkey prices skyrocketing to record highs this year.

Smaller Turkeys, and Fewer of Them

The depopulation of birds is not HPAI’s only effect on turkey production: Since the outbreaks began this spring, the average slaughter weight has dropped from the three-year average by about 1 lb to 30.8 lbs. HPAI has hit larger, heavier toms harder than it has hit hens. Compared to the three-year average, cumulative tom slaughter is down 9.8% in 2022, while hens are down only 2.3%. All told, year-to-date turkey production by pounds is down 5% versus last year. If this trend holds, 2022 turkey production will have the largest annual reduction since 2009 (9.6%).

Not surprisingly, given the shrinking production and continued strong consumer demand for meat and poultry, seasonal cold storage whole bird inventory volumes are at their lowest level since 2006. As of Sept. 30, frozen whole turkey inventory stocks stood at 239 million lbs, 8% below 2021 and 19% below the 2018-2021 average. And the effect on prices seems far more dramatic than the supply shrinkage. All cuts of turkey have surged higher since spring: Wholesale, frozen turkeys are currently selling in the $1.70/lb range, about 30% higher than last year. Fresh, boneless breast meat is trading at $6.50/lb – a 350% increase versus last fall.

Turkey Supplies Have Been Sliding for Years

Starting with the Great Recession, the turkey industry has been buffeted by a series of adversities over the past 15 years including record high feed costs during the 2012-2013 drought and the first major HPAI outbreak in 2015. That outbreak sent prices to record highs and led to a steep drop in demand from quick service restaurants. Years of stagnant consumer demand followed, leaving the turkey industry in a period of weak profitability and slow contraction mode. In short, the last thing turkey producers needed this year was another round of HPAI outbreaks and demand-destroying record high prices.

Turkeys Will be More Expensive This Year – And Perhaps in Years to Come

Will there be a shortage of turkeys for the holidays this year? No, turkeys will be available but they will definitely be more expensive and probably a bit smaller than what home chefs are used to. Historically, retailers have used holiday frozen turkeys as a “loss leader” – that is selling them at minimal or no profit in order to lure customers into the store with the hopes that they will ring up big tabs on all the other holiday accoutrements.

In the past decade, retail whole turkey prices have historically hovered between $0.90 - $1.00/lb. ahead of Thanksgiving. It can be difficult to gauge the true retail price as some grocers can be very aggressive with promotions, for example giving away a free turkey with $400 in grocery purchase or other similar special offers. Such promotions would be sure to generate strong consumer interest this year given the overall inflation backdrop. However, grocers are facing their own inflationary pressures, particularly in labor costs. It remains to be seen how grocers will manage higher wholesale costs.

In its October 21 National Retail Report, USDA is reporting frozen turkey (tom/hen average) price of $1.58/lb, which is actually below current wholesale quotations. (Although there may be some delay in repricing during an upward moving market, this shows how thin retail margins are for frozen whole turkeys.) But still, that is 47% above the same time last year, and would drive the average price of a 20-lb bird $10 higher to $31.50. Drumsticks (up only 6% YoY) and bone-in breast meat (up 17%) or even ham ($2.24/lb for bone in) could be good options to supplement higher priced and smaller birds.


Disclaimer: The information provided in this report is not intended to be investment, tax, or legal advice and should not be relied upon by recipients for such purposes. The information contained in this report has been compiled from what CoBank regards as reliable sources. However, CoBank does not make any representation or warranty regarding the content, and disclaims any responsibility for the information, materials, third-party opinions, and data included in this report. In no event will CoBank be liable for any decision made or actions taken by any person or persons relying on the information contained in this report.


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