Turkey Prices Won’t Gobble Up the Budget

Consumers can look forward to record low prices for Thanksgiving turkey this year as a year-end glut of the traditional holiday centerpiece clogs wholesale and retail channels.

“There are lots and lots of turkeys out there . . . My advice to consumers is that instead of buying one, buy three,” said Mervin Amerine, manager of the California Turkey Industry Board in Modesto.

In fact, more than 240 million birds will be sold in 1987, according to industry estimates, an increase of 14% from 1986.

A more graphic illustration was provided by Amerine, whose groups represent 10% of total U.S. production.

“There is now one turkey produced for each man, woman and child in this country,” he said.

Further fueling the decline is the anticipated cut-rate pricing traditionally found among the highly competitive Southern California supermarket chains prior to Thanksgiving. The markets often sell the birds below wholesale prices in hope of luring food shoppers into the store to purchase all the other holiday-meal trimmings.

Although consumers will benefit from the record production, the proliferation of gobblers is not good news for producers.

“The last three years have been profitable ones for the turkey industry, what with the significant increases in consumption. But this year the production outpaced consumption and the supply-demand equation is now in favor of the consumer,” Amerine said.

For example, last November, frozen, oven-ready turkeys were selling at between 85 cents and 95 cents a pound in the wholesale market. This year, the wholesale price has declined to as low as 55 cents, or a drop of more than 40%.

Amerine projects that supermarket prices will be even lower than 55 cents a pound, because of the practice of selling the birds as a loss leader. But the retailer’s volatile pricing practices can also cause image problems for growers down the road.

“We don’t like to see the price of turkey real low,” he said. “We would love to see the stores sell the turkeys at a fair mark-up all the time and not use them as footballs. Because the average consumer thinks that when the price eventually goes up we (the industry) are being unfair.”

The heavy discount does not, however, extend to fresh turkeys, which are expected to sell at wholesale prices or maybe even higher because of limited supplies. And Amerine anticipates that once the Thanksgiving food shopping spree has passed prices will rise sharply prior to Christmas.