How 2020 Events Have Shaped the U.S. Turkey Market

Thanksgiving is going to look a lot different for many this year—including American turkey farmers.

The recent resurgence in COVID-19 cases is anticipated to lead to a sharp reduction in large family gatherings. As people may be more apprehensive to travel for the holidays or attend larger events, consumer behavior is shifting in an unpredictable way and turkey farmers are having to adapt to meet the changing demand.

Fortunately, analytical research can provide insight into the uncertainty surrounding demand and help farmers make educated guesses when preparing their flocks. Several consumer behavior reports indicate the following shifts in Thanksgiving trends this year:

• 43 percent of shoppers plan to celebrate Thanksgiving at home with their immediate household only;
• 87 percent of Americans are still committed to celebrating the Thanksgiving holiday;
• Nearly one-third of Americans plan to do less this Thanksgiving than in previous years; and
• The prices of favorite Thanksgiving foods are currently 9.2 percent more expensive on average than this time last year.

Turkey Market Trends at a Glance

To understand the direction we’re headed, we must have a clear picture of where we came from. After analyzing U.S. turkey market trends over the last few years, AgAmerica’s Chief Economist Dr. John Penson shared several key insights including:

• Turkey production in October has declined by 7.7 percent when compared to the same time last year;
• Cold storage is also down 11.5 percent when compared to a year prior; and
• Overall turkey production so far in 2020 is down 2.7 percent compared to overall production in 2019.

Processing plant closures due to COVID-19 outbreaks is likely one factor that contributed to this decline in turkey production, along with lower price expectations based on historical trends. These events have created a domino effect as lower supplies have led to higher wholesale prices. However, it’s worth noting that consumers typically do not buy whole birds until two or three days prior to Thanksgiving meaning there may be a clearer picture of the turkey market in the days that follow the holiday.

Source: Turkey Market News Report by the Agricultural Marketing Service, USDA. Last updated November 20th, 2020.

Bottom Line: Wholesale turkey prices are up roughly 19 percent from last year for birds weighing between 8 and 24 pounds due to steady demand coupled with an overall decline in turkey production.

How Turkey Farmers are Adapting to COVID-19

Insights from Dr. Penson and the National Turkey Federation both agree—retail turkey prices are holding strong this year despite historic adversity. What is not yet known is whether demand will be dampened this year in the coming weeks in terms of carcass size and quantity demand. Yet in the face of uncertainty, turkey farmers have aligned with the resilience of American farmers and ranchers nationwide and worked diligently to ensure consumers will have the options they need.

Direct-to-Consumer

Consumers have been gravitating to smaller, local alternatives for Thanksgiving supplies to avoid supermarket crowds, creating more opportunities for turkey farmers to skip the logistics and sell directly to consumers. Many turkey farms are turning to online direct-to-consumer selling platforms to lock in orders and get their product on the tables of American families.

Smaller Quantities

This biggest adaptation this year for turkey farmers is shifting from larger hens to smaller portions to meet consumer needs. There are two main ways farmers have pivoted their operation to adapt to this shift in demand: harvesting earlier or creating smaller quantities by cutting birds in half during processing. Both strategies will likely lead to higher input costs, but hopefully, the retail price and demand will be there to make up the cost increase.

“Many turkey farmers are opting to sell by part rather than whole birds or decided to harvest flocks early to prevent them from reaching a larger size. These strategies have helped but also increase input costs while shrinking profit margins. Farmers are paying processors more to cut birds in half and more to store meat that has been harvested early while consumers are buying smaller birds and spending less than usual.”

Brian Philpot, CEO of AgAmerica Lending.

Click here for more turkey market trend insights with Fox Business and AgAmerica’s CEO.

Wishing You a Happy and Healthy Thanksgiving from AgAmerica

Because of resilient farmers nationwide, our families can rest assured we will have the ingredients needed to supply our Thanksgiving meals this year. American farmers and ranchers continue to face new obstacles each day for the good of society that go largely unnoticed by the general public.

In the coming years, it is imperative as a nation that we come together to lift those who keep our society and quality of life sustained—from dedicated healthcare workers to steadfast farmers. Our family at AgAmerica is truly humbled by the opportunity to serve such an honorable group of people like those that exist within the agricultural community.

Through our work, we’ve had the opportunity to meet farmers and ranchers across the nation who embody these fundamental values of dedication, resilience, and loyalty. One such person that comes to mind is Randy Wheatley, a fifth-generation rancher whose love for his farm and family knows no limits.

This Thanksgiving, join us in sharing the touching story of this Idaho family and their life of hard work, faith, family, and fun.