Never fear, America. You'll be gobbling up turkey this Thanksgiving, and you won't be paying through the nose for the bird, either.
A number of factors, including the lowest turkey production in almost 30 years and all-time highs for wholesale prices, should yield much higher prices at the supermarket and butcher now. They're not, however, because the stores are counting on the birds to bring in the shoppers, who'll then spend money on the fixings: the stuffing, the yams, the potatoes, and the apple pies that we heap on our groaning tables.
"Nobody leaves the market with just a turkey," said Michael Sheats, who tracks turkeys for the U.S. Department of Agriculture's marketing service.
Turkey producers were cautious about increasing the size of their flocks after experiencing poor profitability in recent years because of volatility in corn prices. As a result, there were not enough birds to go around this year for the industry.
"We didn't have all the turkeys to fulfill demand," said Gary Cooper, chairman of the National Turkey Federation and owner of Cooper Farms in Ohio. "We could have literally sold more turkeys had we had them as an industry."
Corn and soy represent about three-quarters of a turkey's diet, and both crops are on target for record-high yields and production in 2014. But feed costs on turkey pricing are already priced into turkeys on the market now, explained Mary Pitman of Pitman Family Farms, which is known for its free-range and organic birds sold to Whole Foods Markets and other retailers. The Sanger, California-based company says farmers faced higher feed costs earlier this year.
But prices have slid since. According to the USDA's last preliminary report on farm prices, U.S. corn was priced at $3.28 per bushel in October 2014, compared with $4.63 per bushel in the year-ago period. During the same period, soybeans were at $9.64 per bushel vs. $12.50 per bushel a year earlier.
The government estimates that the wholesale price for turkeys in the fourth quarter of 2014 will range from $1.12-$1.16 per pound, or about 9 cents higher than last year. The USDA is expected to publish its new price forecast on Monday when it releases the Livestock, Dairy and Poultry Outlook report.
The majority of turkeys for Thanksgiving were contracted earlier in the year at a set price. However, sometimes retailers "spot" fill demand and pay much more than the original price on their contracts.
"We're seeing prices spike on the spot market," Sheats said. "That speaks to a little bit of the shortage and good interest out there in turkeys."
But that isn't likely to drive turkey prices up for the holiday season. Some stores will offer whole turkeys as loss leaders in hopes of enticing consumers to buy other items for the Thanksgiving dinner.