CME: US Turkey Industry Assessed

US - The US turkey industry experienced a remarkable period of growth from the mid-1980s to the mid-1990s, when production more than doubled.
calendar icon 21 November 2012
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The growth was driven by consumers’ concerns over dietary fat and cholesterol and their resulting interest in “white meat”.

In addition, the rapid development of a broad array of processed meat products made either completely or partially from turkey helped drove per capita consumption from 8.7 pounds in 1984 to 17.9 pounds in 1991.

The industry continued to grow from 1991 through 2007 but the rate of growth was generally just large enough to keep domestic per capita consumption levels steady while exports grew by more than 450 per cent.

Record-high prices for whole birds and most turkey parts in 2006 drove a rapid expansion of output that ran head-long into the higher corn prices of 2007 and 2008 to cause a 9.3 per cent year-on-year reduction in output in 2009. The industry has grown slowly since then, managing production increases well enough to remain profitable until this year when costs once again have put the industry into a profit bind.

Production this year is forecast by the Livestock Marketing Information Center to grow by 2.7 per cent. Output thus far in 2012 has been 2 per cent larger than last year.

As is the case with other species, 2013 output is expected to drop. LMIC’s forecast at present is for a 4.1 per cent decline. USDA’s November WASDE predicts 2013 output will fall by 3.2 per cent to 5.79 billion pounds, RTC weight.

The decline in output will be the major driver of another decline in per capita consumption. The 2013 level is expected to be 15.5 to 16 lbs. per person, its lowest level since 1988.

The bright spot for turkey usage is exports. Those hit a record 702.6 million pounds in 2011 and are expected by LMIC to grow by 100 million pounds beyond that level in 2012. 2012 exports are expected to account for 12.1 per cent of total production. LMIC expects exports to fall by 4.1 per cent next year but to represent 13.5 per cent of output.

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