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Smaller Turkey Stock Likely Won't Equal Higher Retail Prices

By Alexander McCall

Posted November 19, 2014

Turkeys

Hoosiers might be paying a little more for meat, but that likely won't translate to a spike in turkey prices this Thanksgiving.

A drought in 2012 caused a drop in grain supplies, which caused a spike in feed prices. That meant more costs for meat producers, who are now passing those costs on to grocery stores and other retailers.

A recent report from the U.S. Department of Agriculture estimates frozen turkey costs about 14 cents more per pound wholesale  than it did this time last year.

The National Agricultural Statistics Service also indicates there are a lot fewer turkeys this year.

This year's expected turkey stock is 235 million turkeys, which is the smallest turkey production since 1986, when U.S. farmers produced only 207 million turkeys.

It's uncertain whether the increase in wholesale turkey costs will equate to a higher bill when Hoosiers select their Thanksgiving bird.

David Schell runs The Butcher's Block in Bloomington and says that despite rising meat costs, his shop hasn't experienced a decline in turkey orders.

"The past three to four years they've stabled out somewhat, so we have a pretty good idea of how many we will sell every year," Schell says.

Corinne Alexander, an associate professor of agricultural economics at Purdue University says that's because turkeys are often sold as loss leaders - meaning retailers will sell them for less than wholesale price just to get customers in the doors to buy other food and in hopes they'll come back after Thanksgiving is over.

"It's really clear that grocery stores are choosing to offer turkey to their customers at a substantially lower price than what they're paying for it," Alexander says. "So these higher wholesale costs may not mean that your customers or consumers, when they go to the grocery store, will pay any more than they normally do."

Both Schell and Alexander say how much you pay for your turkey mostly depends on where you buy it.

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