Gobble gobble! Falling commodity costs keep turkey prices low

Save room for seconds this Thanksgiving.

Turkey prices have stayed low over the past year, keeping the cost of an average holiday dinner relatively inexpensive. And turkey gobblers have the futures market, led by a strong corn and wheat harvest, to thank.

While consumer prices generally rise over time, turkey prices have fallen. A pound of the fowl is now setting the average American urban resident back just $1.667, according to the October reading of the consumer price index released by the Bureau of Labor Statistics.

That's down almost 5 cents from the beginning of the year, and is actually a touch lower than around the comparable period in 2010. Over the same time frame, the overall CPI for urban consumers has risen 9 percent.

According to the American Farm Bureau, low turkey prices have helped the price of a Thanksgiving meal for 10 stay around $49 for the fourth straight year.

Read MoreTalking turkey: Here's how much Thanksgiving costs this year

This decline in turkey prices comes as an unexpectedly good farming season has caused grain prices to fall substantially. Turkeys mostly feed on corn and soy: over the course of the past year, corn futures have fallen almost 10 percent, while soy futures are down nearly 20 percent.

Still, the Thanksgiving turkey market is a bit insulated from market forces. At least that's what Frank Reese, a turkey farmer who raises a far more expensive sort of turkey on his Good Shepherd Poultry Ranch, says.

Joe Michi | E+ | Getty Images

Whole frozen turkeys "are giveaways that mean nothing for the industry," he told CNBC. "Ninety percent of them were killed two years ago. They're like a surplus."

The real money, he says, is in turkey used for sandwich meat, or ground turkey.

As for how the farmers fare? According to Reese, a farmer who sells an inexpensive 10-pound turkey will only end up earning about 50 cents on the entire bird.

Watch "Futures Now" Tuesdays and Thursdays at 1 p.m. ET exclusively on FuturesNow.CNBC.com!


Host Bio & Watch Now

Trader Bios