Turkey prices are 73% higher than last year and might stay that way through Thanksgiving, commodities strategist says
The ongoing spread of bird flu will likely affect the price and availability of turkeys this Thanksgiving.
Right now the price per pound of an 8 to 16 pound turkey is $1.99, up from $1.15 last year, according to USDA data. This is a 73% increase.
Typically bird flu spreads during the colder months, but this year commercial turkey producers were reporting cases of avian flu in July — a time when farmers are raising flocks for the holiday season.
"It's certainly occurring at a terrible time," says Walter Kunisch, a senior commodities strategist at Hilltop Securities.
The virus is 'more acute' this year
The last avian flu outbreak was in 2015 and about 50 million birds were affected, according to USDA data.
Already this year, 47.6 million birds have been affected and the flu has been detected in 42 states.
To control the spread, growers must kill entire flocks, which usually contain about 15,000 birds.
From January to July, 5.4 million birds were killed.
"These viruses are occurring with a higher level of frequency," Kunisch says. "It seems like this year the HPAI is more acute. It's certainly more widespread in terms of the geography."
It seems like this year the HPAI is more acute.Walter Kunischsenior commodities analyst at Hilltop Securities
Hormel's Jennie-O brand, one of the largest turkey suppliers in the country, had to slaughter thousands of infected birds and expects supply to remain constrained throughout the rest of the year.
"Lower industry-wide turkey supplies are expected to keep prices higher near term," CFO Jacinth Smiley said on a recent earnings call.
In Minnesota, a top turkey-producing state, the flu has affected more than 3.5 million turkeys. In Iowa it has affected more than 13.3 million.
Other major turkey exporting states like North Carolina and Arkansas are also reporting high numbers of affected birds.
Farm-level inflation is 'sky high'
The effects of avian flu are compounded by the increased cost to raise turkeys. Farm-level inflation is "sky high," Kunisch says.
Turkey feed prices increased more than 10% from August 2021 to August 2022, according to USDA data.
Plus, farmers are still feeling the pinch from soaring labor costs.
A shortage of both whole birds and turkey breasts in cold storage might drive the price of turkeys higher in November, too.
Still, there is a chance suppliers will add turkeys to the market "at the last minute," but consumers shouldn't count on it, Kunisch says.
If you're not prepared to pay a premium for a turkey, he adds, you might want to switch to an alternative meat.
Sign up now: Get smarter about your money and career with our weekly newsletter
Don't miss: Inflation remains persistently high at 8.2%—a 'tremendously unwelcome negative surprise,' says economist