Higher Corn Prices Mean Higher Turkey Prices As T-Day Approaches
Friday, November 12th, 2010Washington, DC, United States (AHN) – Higher prices for turkeys will make Thanksgiving dinner more expensive and means some people who rely on food banks will have to do without a traditional holiday dinner.
The culprit is higher feed prices that have caused an approximate 2 percent drop in production, leading to a 28 percent jump in the wholesale price of turkey over a year ago. Frozen turkeys rose to $1.09 a pound on average Thursday, which was the highest price ever recorded.
Corn is the main ingredient in turkey feed, accounting for 70 percent of the ingredients. Therefore, the fact that corn prices rose by 47 percent in the past year had a huge impact on the cost of raising turkeys.
Look for prices to rise further as competition for corn is heating up because corn is not only used in food for human consumption and in animal feed, but also in the manufacturing of ethanol fuel for vehicles.
U.S. Department of Agriculture officials expect turkey production to fall 1.3 percent this year to 5.514 billion pounds.
Although retailers usually discount turkey prices around holiday time, analysts do not expect to see deep discounts this season because there is not much wiggle room for retailers to sell birds at a steep discount without taking severe losses.
Agriculture Department officials estimate wholesale turkey prices for eastern markets will run about $1 to $1.04 during the fourth quarter of this year compared to 84 cents per pound for Q4 2009. Retail prices for frozen turkeys were $157 per pound in September, the highest prices since 1980 and 7.7 percent higher than a year ago.
Food banks around the country, including some in California and Texas, are already saying they do not expect to have enough turkeys to hand out to poor families this year.
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