Prices are surging for turkeys due to inflation, bird flu

Dual impacts of inflation and bird flu outbreaks affecting commercial turkey operations will result in record-high prices at the grocery store for turkeys this holiday season, according to an economic analysis by the American Farm Bureau Federation.

The retail price for fresh boneless, skinless turkey breast has already set a record high of $6.70 per pound in September, AFBF reported. That was 112% higher than the same time in 2021, when prices were $3.16 per pound. The previous record was $5.88 per pound in November 2015, during an outbreak of highly pathogenic avian influenza, or HPAI, that year.

A new “Market Intel” report by Farm Bureau economists Veronica Nigh and Bernt Nelson noted that inflation is adding to the price hikes.

Retail food prices were 11.4% higher in August compared to the same time last year. Despite higher prices, the analysis said, there should be sufficient turkeys to meet Thanksgiving demand.

“All of us are feeling the pain of higher prices at the grocery store,” AFBF President Zippy Duvall said in a statement. “HPAI outbreaks in the spring and an uptick in cases in the fall are taking a toll, but farmers remain dedicated to ensuring America’s food supply remains strong.”

The Farm Bureau noted that individual farmers aren’t profiting from the high retail prices, as higher costs for feed, fuel, fertilizer and labor significantly impact earnings. The U.S. Department of Agriculture’s Farm Sector Income Forecast predicts record high U.S. production costs this year, up 17.8% from 2021.

Turkey producers are being affected by bird flu after the first U.S. case of HPAI was detected in a commercial turkey meat operation in Indiana in February. The last U.S. outbreak occurred in 2014-2015.

Since then, there have been 468 detections of HPAI. As wild birds made their pilgrimage north in the spring, they spread HPAI to 33 states.

The USDA Economic Research Service reported in July that 5.4 million turkeys had been culled this year as a result of HPAI exposure. Though the outbreaks diminished, the numbers of turkeys raised for the market continued to drop, with an 8% deline in production in the second quarter of this year.

Nigh and Nelson also noted in their report that “the risk of HPAI outbreaks has incentivized growers to market younger birds, resulting in lower market weights.”

The average weight of a mature turkey for the first two weeks of September was just under 29 pounds, 4.5% below August and 7% below the average weight in September 2021, the report said. July marked the only month in which average processing weights have increased since the HPAI outbreak began.

The bird flu crisis has also had a major impact on egg prices. While egg prices have come down from record highs in July, the average price for a dozen grade A eggs is $2.34, AFBF reported. That’s 27% higher than the same time in 2021 and 44% above the five-year average of $1.29.

Turkey production, meanwhile, has been trending downward since 2019.

According to USDA’s September 2022 Livestock, Dairy and Poultry Outlook, August turkey production totaled 450.6 million pounds, 16% below July, and 9.4% below the same time in 2021. Turkeys raised in the U.S. are forecast at 212 million head this year, down 2% from 2021.

The AFBF analysis concluded that “fewer turkeys raised, combined with strong demand, inflation and growing demands on food systems,” triggered major price spikes consumers are now seeing.

“The good news is fall HPAI detections are well below spring numbers,” the report said. “While there should be enough turkeys to go around for Thanksgiving, pressure will keep prices high.”

The report said supplies are expected to see additional drops in 2023.