There should be plenty of turkey for second helpings this Thanksgiving. Not to mention cranberries.
Turkey supplies will be plentiful after a recent production boom. Add that to stagnant U.S. demand and you’ve got the recipe for cheaper birds. According to an annual survey from the American Farm Bureau Federation, a 16-pound turkey will cost about 1.6 percent less than last year, and the whole meal will be the cheapest since 2013.
Turkey demand almost doubled in the 1980s as Americans flocked to low-fat foods. Since then, per-capita disappearance—a proxy for consumption—has been fairly stable. There’s a market for deli meat and ground turkey, while the bird’s parts are less popular, said Dewey Warner, a research associate with Euromonitor International in Chicago. “Chicken is more culturally instilled in people,” he said.
U.S. production has climbed faster than demand in the past two years. While the worst-ever U.S. bird-flu outbreak killed millions of birds in 2015, the epidemic has since abated.
“After avian influenza, the market actually over-corrected quite frankly and supply became excessive,” said Jay Jandrain, chief operating officer of Butterball LLC, the North Carolina-based producer that sells about a third of all Thanksgiving and Christmas turkeys. “There’s not going to be any issues at all from a consumer standpoint in being able to find turkeys.”
Costs have held below average this year and are “particularly low” for Thanksgiving, when prices typically peak, the U.S. Department of Agriculture said in a report Thursday.
“It’s going to be a really good, inexpensive turkey season for consumers,” said Christine McCracken, an executive director with Rabobank in New York.
One of the industry’s recent challenges has been surging production growth for beef, pork and chicken, said Tom Elam, president of Carmel-based FarmEcon LLC. That’s created “more of a general supply of protein on the U.S. market to compete with everybody,” he said.
Exports have helped to offset some of the expanding meat supply. Still, China, once the second-largest turkey export market, has maintained a ban on American poultry imports since 2015.
That gap between demand and output has spurred a surge in frozen inventories, meaning shoppers might score a better-than-usual deal on holiday birds. Stockpiled supplies of turkey reached an eight-year high at the end of September, USDA data show. The agency will issue its next cold-storage report on Wednesday.
Holiday demand is expected to be steady, and Butterball is seeing more interest in pre-cooked and smoked turkeys, so chefs don’t have to hover by their ovens, Jandrain said.
About 88 percent of Americans serve up the birds for Thanksgiving, accounting for 736 million pounds (334,000 metric tons) last year, according to the National Turkey Federation. That means about a 10th of annual production is gobbled for the holiday.
Meanwhile, a glut of U.S. supplies of cranberries has gotten so large that fruit could be headed to the compost pile.
Just as demand is hitting its seasonal peak, American processors are anxiously awaiting government approval that would allow them to turn excess fruit into fertilizer. The program would be the first of its kind for cranberries.
Supplies have piled up amid bountiful U.S. harvests and a surge in imports. Inventories were large enough to top consumption before farmers even started gathering this year’s crop in September. The overhang prompted growers and processors to vote in favor of the disposal program at a biannual meeting of the Cranberry Marketing Committee in August. The U.S. Department of Agriculture could rubber-stamp the proposal as early as this week.
“The order will allow the industry to get back into supply and demand balance,” said Kellyanne Dignan, the director of global cooperative communications at Ocean Spray Cranberries Inc., the largest U.S. producer and processor, and a name that’s become almost synonymous with the fruit.
The humble cranberry is iconic at this time of year as it pops up in everything from traditional relishes to Christmas cookies and cocktails. About 20 percent of annual sales of the fresh and processed fruit occurs during the week of Thanksgiving, celebrated on Nov. 23 this year. But becoming a celebrity of the fruit world hasn’t been enough to reverse the slowing pace of demand growth, leading the industry to take desperate measures to keep prices from collapsing.
Under the proposed initiative, fruit processors and exporters would be responsible for supply disposal. Some can be donated or used for research, but the lion’s share will likely end up as compost. The cranberry committee has also recommended that growers reduce next year’s production, leaving it 25 percent below average sales of the past six years, according to Michelle Hogan, executive director of the Wareham, Massachusetts-based group. The plan for next season is similar to a crop-reduction method last used in 2000 and 2001.
“We are producing a lot more than we are selling” Hogan said.
Even as U.S. exports climbed in recent years, with shipments to China helping boost American shipments by 33 percent over the past five seasons, that hasn’t been enough to prevent a jump in inventories. The problem is U.S. production grew 19 percent since 2011 and imports, mostly from Canada, tripled.
The cranberry is one of many agricultural products that are plagued by gluts, which has kept global food inflation in check.
The disposal program would help to reverse the growth of excess supply while the industry works to increase demand in domestic and international markets, said Tom Lochner, executive director of the Wisconsin State Cranberry Growers Association. About 5 percent of the crop is sold as fresh fruit, with the rest stored and sold frozen, dried or processed into juices and sauces.
If the USDA approves the program, any handler that uses more than 125,000 barrels would be required to dispose of 15 percent of their supplies gathered from this year’s crop, Hogan of the Cranberry Marketing Committee said. A barrel weighs 100 pounds, or 45 kilograms.
A bout of bad weather could also help to ease the fruit glut. American production is projected to fall 6 percent this year to 5.6 million barrels after some adverse growing conditions, the government estimates.
Cranberries are native to North America with about 75 percent of global production grown in the U.S. Wisconsin accounts for more than half the domestic harvest.
Fawn Gottschalk’s family’s 230 acres of marsh beds in Wisconsin Rapids, Wisconsin, will produce about 7 percent less this year after a cold start to the growing season, some heat near blooming in July and too much rain in August curbed yields for the perennial crop. The farm her grandfather started in 1940 had better yields than expected as freezing weather this fall came in a little later than normal.
Still, ample inventories mean prices are likely to fall to 30 cents to 35 cents a pound this year from about 38 cents last year and 40 cents in 2015, Gottschalk said.
“We are approaching break-even and some growers are below break-even,” Gottschalk said. “We are still OK, but we need to develop new markets and increase year-round consumption.”