This year, the retail price of frozen turkey in the US is at a three year-low. The American Farm Bureau estimates that the average whole turkey price per pound in the US will be $1.36 this year. According to the US Department of Agriculture (USDA), last year’s average price for frozen turkeys was $1.49/pound and in 2011 it was $1.54. This, despite high demand for turkeys as the US prepares for the Thanksgiving-Christmas holiday season. Historically, US consumption of turkeys jumps over 20% from October to November and 85% of the 46 million turkeys eaten each Thanksgiving are frozen.
Here’s why high demand isn’t pushing up the cost of frozen turkeys:
1. Selective breeding has led to bigger turkeys, and thus, a lower cost per pound. In 1986, the average weight for a full-grown, live turkey ready to go to market was 20 pounds. By 2006 that figure had risen to 28.2 pounds, and by 2012 it was 30.8 pounds. Processed turkeys lose 20%-23% of their weight when they are butchered, plucked, and cleaned.
2. Packaging and freezing facilitates long term warehousing of frozen turkeys. Food industry consultant and agricultural economist Tom Elam, told Quartz that the plastic packaging on frozen poultry has gotten so effective that frozen birds may be preserved for up to a year with “no detectible change in the quality of the bird.” Butterball advises that an unopened frozen turkey can be stored for up to two years. Add to that the fact that the sheer amount of freezer space on hand to store turkey is more than ample and increases every year. In the US, there was a total of 542 million pounds of turkey in cold storage in September.
3. Many retailers sell turkeys as a loss leader to get people in the door. The hope is that, even if turkey prices are so low that the retailer loses money on each purchase, that loss will be offset by the other purchases each customer makes. While the average price a farmer gets for a turkey is between $1.01 per pound and $1.05 per pound, it’s not hard to find retailers offering turkeys for $.69 per pound.
4. US consumers are used to cheap turkey around the holidays. Every year for the past decade, retail prices on frozen whole turkeys has dropped an average of 9% between October and November. Retailers continue to give their customers what they’ve come to expect.
This year, the combined effect of the retail practices and the technology has been an oversupply of turkeys. According to Elam, poultry producers raised too many turkeys in 2011 and retailers were forced to slash prices to unload the overstock in early 2012. Then, last summer, the turkey industry again overproduced and retailers who’d been burned by the 2011 oversupply were hesitant to stock up for the 2012-13 holiday season. That left excess birds in refrigerated warehouses, ready for low-priced sale this season.